'Webrooming' on Amazon: How Best Buy Could Profit From the Newest Holiday Shopping Trend

By Carol Kopp,

Shutterstock photo

It was one happy day on Wall Street yesterday, and the happiest of all were investors in Best Buy ( BBY ). Its shares jumped 6.5%, closing at $39.04, making it the day's top gainer in the Standard & Poor's 500 Index (INDEXSP:.INX).

Moreover, a look at the reasons for that enthusiasm could spread some cheer well beyond Best Buy.

Best Buy was the focus of two new analyst reports, both reporting greater demand for electronics and other big-ticket items. Combined with other reports looking ahead to the holiday season, there's reason for optimism through the end of the year.

The first report, from Investment Technology Group ( ITG ), predicts that Best Buy will report a same-store sales increase of 3% to 5% for the quarter that just ended, far exceeding consensus estimates.

The report attributes the improved sales numbers to consumers' increasing willingness to spring for higher-ticket items. Particularly strong gains were seen for purchases above $1,000.

Popular items included bigger, sharper televisions, even the super-high-definition, or "4K," sets that have not caught on previously.

Separately, a retail analyst for Stifel Nicolaus & Co. said that consumer spending on electronics is generally improving, and that an increasing number of consumers cited Best Buy as the store where they would shop for those products. The analyst noted a 9% increase in consumers mentioning Best Buy in early October, following a 12% increase in late September.

That would be Best Buy's best performance since 2010.

Granted, those reports and the others below are based on research completed in September, before some of our elected representatives decided that it would be a fine idea to shut down the United States government, and maybe an even better idea to default on its sovereign debt.

But let's just assume that they'll get their act together soon, that public confidence will not be jolted by a prolonged crisis, and that the following predictions hold true in the months ahead.

Investment firm Janney Montgomery Scott also reports better sales of big-ticket items like new appliances as well as home electronics. It attributes the latter to the rebound in home sales.

The annual Holiday Shopping Survey , from Accenture, adds more weight to a positive outlook for the rest of the year.

According to its survey, conducted in September, 21% of consumers said they plan to buy home electronics, compared to 15% a year ago. And, they intend to spend an average of $646 on gifts this year, an 11% increase over a year ago.

Overall, the Accenture survey suggests a more expansive mood among shoppers. At least, they describe their own attitude as having shifted from "cautious" to "sensible." Economic concerns were cited by 24%, down from 28% last year.

In fact, the word "sensible" doesn't begin to describe the attitude of American shoppers. They're turning bargain-hunting into a science.

For one thing, they're not just "showrooming." They're "webrooming," too.

We've all heard about the growing habit of "showrooming," or checking out a product in the store, and then buying it online at a cheaper price.

It turns out that works both ways. Wise consumers are now just as likely to go "webrooming," that is, researching a product at online retailers' sites and then heading out to a local store to buy it.

Consumers who "webroom" say they're saving on shipping costs. But they also say they like getting a real-world look at the big-ticket item that they're buying.

The Accenture survey notes that "showrooming" has gone positively mainstream in just one year. Fully 63% of consumers plan to browse in person but buy online this year.

But even more, 65%, say they'll do the reverse as well, researching products online before going out to make their purchases.

Another study, from mobile marketing firm Vibe, also concludes that a majority of consumers now engage in "showrooming" at least occasionally, prowling brick-and-mortar stores armed with smartphones that allow them to use price-comparison apps on the spot.

The Vibe study concludes that Amazon ( AMZN ) is getting the lion's share of those sales. Fully 31% said they finally completed their purchases on Amazon.

Presumably, they're also "webrooming" on Amazon. But that's good news for some other retailer, one with a brick-and-mortar store.

Related stories:

Google's Rumored Nexus Smartwatch, iPhone 5Cs, 4K TVs: Which Gadgets Will Make Wish Lists This Holiday Season?

Amazon's Stressed Out Culture Is Burning Out Employees

Google Chromebooks Are Deadlier to PCs Than iPads

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Technology
Referenced Stocks: AMZN , BBY , ITG

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