This study by Subodha Kumar analyzes how consumer showrooming influences supplier and retailer pricing in a dual offline-online channel setup. Showrooming allows suppliers to squeeze more profit from offline sales while retailers deter showrooming by adjusting prices. Surprisingly, showrooming can benefit physical retailers by limiting suppliers’ ability to move sales online when online product returns are cheaper. Switching from wholesale contracts to store-within-a-store rental contracts aligns incentives to reduce showrooming and increase offline demand. The study reveals showrooming’s nuanced effects and highlights strategic supply chain coordination.
Benefit of Consumer Showrooming for a Physical Retailer: A Distribution Channel Perspective
