Showrooming, webrooming, and operational strategies for competitiveness

Abstract Show/webrooming refers to a consumer inspecting a product at a brick‐and‐mortar (BM)/online retailer before purchasing it from a competing online/BM retailer. Despite retailers adopting price‐matching and free‐shipping policies, show/webrooming remains prevalent. We model different product value information that consumers can learn by visiting a BM retailer and researching an online retailer, and studying consumers' show/webrooming behavior in a unified model. We confirm that consumers can engage in show/webrooming for informational reasons, but webrooming may also be driven by a noninformational reason. We find that show/webrooming may, respectively, benefit BM and online retailers; in particular, there exist win‐win‐win outcomes where both retailers and the consumers benefit from show/webrooming. We propose in‐store research assistance for BM retailers and free sampling for online retailers and show that these operational strategies may improve the retailers' competitiveness in the presence of show/webrooming. Our results are found to be robust in several model extensions.