- Showrooming – Displayed and played.

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Showrooming – Displayed and played.

-

A case study from a brick-and-mortar

perspective

Master’s Thesis 30 credits

Department of Business Studies

Uppsala University

Spring Semester of 2018

Date of Submission: 2018-08-08

Johanna Westerlund

Mikael Westin

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Abstract

Purpose - The purpose of this study was to deepen the understanding of how showrooming

affect the exploited brick-and-mortar businesses. This was done by investigating an industry characterized by high levels of employee knowledge where the expertise of the personnel create showrooming incentives.

Methodology - The study applied a qualitative case study where semi-structured interviews

was held with employees of a firm representing the case of an exploited firm.

Findings - The empirical findings suggest that showrooming may affect the exploited firm in

the areas; profits, offerings, channels, and personnel. Profit-losses due to showrooming may force the exploited firm to reduce number of personnel and working hours, decrease store areas and close of unprofitable stores, change the product and services offered, change how products are displayed, and in what channels the products are available. Further it may give rise to internal channel conflicts, and affect personnel motivation and sales performance.

Practical Implications - A perceived showroomer should be treated as a paying customer to

avoid misjudgment of character and a loss in service level. Private labels and exclusive selling rights allow for higher profits while reducing showrooming opportunities. In addition to this, rewards for cross-channel retention, synchronized channel information, and price consistency across channels may reduce internal conflicts.

Contribution - This study contributes to the young research area of showrooming by

assessing the effects an exploited firm may encounter when faced with showroomers.

Key Words - Showrooming, Omni- and Multichannel retailing, Freeriding, Research

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Acknowledgements

We would first like to thank our thesis advisor Virpi Havila and our fellow seminar

participants for their guidance and comments throughout the process. We are also incredibly grateful for the participation of our respondents from Apoteket AB, for taking their precious time to be part of our study. We are forever indebted to you all.

We would like to dedicate a special thanks to James Sallis, Uppsala University’s own fairy godfather, for providing us with good advice and encouragement in times of need.

Finally, we would also like to thank our wonderful families, partners, and friends, who have all stood by us during the roller coaster that is called writing a Master’s thesis. Without their support this thesis would not have been possible. Thank you.

Uppsala 8th of August 2018

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Changes in the consumers’ need for channel service output and technological advances have led to significant alterations in the interaction between the consumer and the firm (Van Bruggen, Antia, Jap, Reinartz, and Pallas, 2010). The consumers’ demands for products and services as well as access to information from multiple sources has affected how firms design the routes to their markets, which has resulted in channel multiplicity (Van Bruggen et al., 2010). The channel multiplicity along with technological development and the use of internet have enabled consumers to shop irrespective of time and place (Arora, Singha, and Sahney, 2017), and made channel switching easy (Van Bruggen et al., 2010; Heitz-Spahn, 2013).

An outcome of channel multiplicity is that consumers are able to use multiple channels for a single purchase (Arora et al., 2017), and according to Van Bruggen et al. (2010) this plays an important role in the consumer buying process. This consumer buying process, also known as the decision making process, is commonly divided into five phases which a consumer passes in a purchase, namely: the problem recognition, the information search, the evaluation of alternatives, the purchase, and the outcomes (Solomon, Bamossy, Askegaard, and Hogg, 2006). Depending on what phase of the process the consumer may be in, different channels can provide different options (Van Bruggen et al., 2010), and therefore the optimal channel may vary (Verhoef, Neslin and Vroomen, 2007). Consequently, consumers use different channels in their buying process (Verhoef et al., 2007; Balakrishnan, Sundaresan & Zhang, 2014; Hultman, Fuentes, Hjort, Johansson, and Tarnovskaya, 2017) to maximize their benefits and reduce their spending (Pookulangara, Hawley and Xiao, 2011). While the consumers are using the multichannel options to gain benefits in their buying processes, the behavior is creating a costly dilemma for the physical retailers (Arora et al., 2017; Rapp, Baker, Bachrach, Ogilvie and Beitelspacher, 2015). The behavior when a consumer visit firm A to gather information about a purchase, while making the purchase from firm B, is referred to as research shopping or free riding, in which the sub-categories showrooming and webrooming is found (Rapp et al., 2015). Consequently the expenses for the search behaviour is on firm A, while firm B reaps the profit.

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2 retailers’ multichannel businesses (Arora et al., 2017; Yurova, Rippé, Weisfeld-Spolter, Sussan and Arndt, 2017). Showrooming has yet to receive a formal academic definition (Rapp et al., 2015), however a common interpretation regards to this behavior as cross-channel shopping and includes the consumers using a physical store to gather information, while making the purchase through an online channel (Kalyanam and Tsay, 2013; Rapp et al., 2015; Verhoef et al., 2015). A consumer’s willingness to showroom is driven by their perception of channel related gains in relation to its costs (Arora et al., 2017; Gensler, Neslin and Verhoef, 2017). If the offline search benefits and online purchase benefits combined result in a positive outcome for the consumers this will lead to showrooming behaviours (Arora et al., 2017). Even though studies of showrooming is limited (Rapp, et al., 2015), a number of researchers have examined what determinants that are considered to affect this kind of consumer behaviour.

It is argued that price may be one of the most influential determinants of showrooming and several authors give monetary factors attention (Arora et al., 2017; Balakrishnan et al., 2014; Dahana, Shin and Katsumata, 2017; Daunt and Harris, 2017; Gensler et al., 2017; Rapp et al., 2015). However, it is not all about the price. Product characteristics, consumer characteristics, and channel characteristics also affect showrooming intentions (Daunt and Harris, 2017). No matter the determinants, showroomers use the information and the access to products the physical stores provide, and by doing so they use the time, resources, and knowledge of the store personnel (Bachrach, Ogilvie, Rapp, and Calamusa., 2016, p. 4).

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1.1 Problem statement

In many of the showrooming cases previously mentioned there is no need for store personnel involvement, but regarding deeper knowledge about the products, sometimes the online information is simply not enough (Bachrach et al., 2016, p. 14). Consumers have recognized that specialized retailers possess a deeper and more sophisticated knowledge about the products they offer, hence consumers are more prone to engage with personnel in these retail settings to learn more (Bachrach et al., 2016, p. 14). This imposes that the harder the knowledge is to obtain without expert help, the higher the incentives for showrooming as the consumer gain access to knowledgeable personnel through the physical store. While knowledge is considered to be one of the most important assets for organizations’ ability to remain competitive in the marketplace (Bollinger and Smith, 2001), paradoxically, showroomers exploit the knowledge and resources of one retailer, to use when finalizing a purchase at a competitor (Kalyanam and Tsay, 2013; Rapp et al., 2015; Verhoef et al., 2015).

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1.2 Purpose and RQ

Showrooming involves a set of players: consumers, offline retailers, and online retailers. While the behaviour is beneficial for the consumer and online retailer, it poses a problem for the exploited brick-and-mortar, as they bear the costs of the consumer’s information gathering. Employee knowledge plays an important part in this information gathering and while specialized employee knowledge attracts showrooming, it simultaneously comes at a higher cost for the retailer. This suggests that showrooming may be a significant problem for retailers associated with high levels of employee knowledge, as the incentives for showrooming are higher. Showrooming is a research area with limited academic insight (Daunt and Harris, 2017), and prior studies call out for research to extend the understanding of the field (Arora et al., 2017; Daunt & Harris, 2017, Gensler et al., 2017; Rapp et al., 2015). Thus, the purpose of this study is to deepen the understanding of how showrooming affect the exploited brick-and-mortars, by looking at an industry where employees are characterized by high levels of knowledge.

To achieve the purpose, the pharmacy industry serves as an excellent area to investigate, as this retail industry is associated with high level of personnel knowledge (Waterfield, 2010; Weaver & Sorrells-Jones, 1999). Whether the pharmacy employees are pharmacists, dispensers, or technicians they are regarded as knowledge workers with the ability to make professional judgements and respond to individual consumer symptoms in order to find solutions for the consumers’ needs (Waterfield, 2010). With the use of their extensive knowledge these employees can make product and treatment recommendations while having the appropriateness of different active substance combinations in consideration, and the knowledge they possess can be viewed as tacit (Waterfield, 2010). This implies that the information is harder for consumers to obtain from an online source, hence creating incentive for visiting the physical pharmacy to gather information.

The following research question is addressed:

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2. Theoretical background

The theoretical chapter starts of by presenting a prerequisite for showrooming, namely multi- and omnichannel retailing. This is followed by an explanation of the research shopping concepts free riding and showrooming, where the findings from a literature review provide determinants driving the behaviour. Further the effects of showrooming on profits, offerings, channels, and personnel are presented, followed by a summary of the theoretical concepts used in the analysis.

2.1 Multi- and omnichannel retailing

In order to gain a deeper understanding into the consumer’s showrooming behaviour, the thesis authors deemed an understanding of the retailing channels available to the modern shopper to be necessary. During the last two decades retailing has been going through dramatic changes, as a result of the introduction of the online channel and the ongoing digitalization of society (Verhoef, Kannan & Inman, 2015). According to Christensen and Raynor (2003) the online channel has become remarkably dominant in specific retail markets, to the point that it can be considered to be a disruptive development. In turn this has resulted in retailers having to adjust their business models in order to respond to the changes in the retail mix and consumers’ shopping behaviours, and by this initiating multichannel strategies (Arora et al., 2017; Hultman et al., 2017; Verhoef et al., 2015).

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6 progresses (Verhoef et al., 2015). Through the introduction of the mobile channel, tablets and smartphones, social media, and the integration of these new channels in offline and online retailing, Verhoef et al. (2015) and Rigby (2011) argue that we are moving into the next phase in multichannel retailing, being omnichannel retailing. According to Beck and Rygl (2014) omnichannel retailing is defined as “the set of activities involved in selling merchandise or services through all widespread channels, whereby the customer can trigger full channel interaction and/or the retailer controls full channel integration.” (Beck & Rygl, 2014, p. 175). The key difference between multichannel retailing and omnichannel retailing according to Beck and Rygl (2014) therefore lies in the possibility of interaction between channels. Other authors have also defined omnichannel retailing in their works. Rigby (2011) has defined the phenomenon as “an integrated sales experience that melds the advantages of physical stores with the information-rich experience of online shopping” (Rigby, 2011, p. 4), and Levy et al. (2013) defined their concept “omniretailing” as “a coordinated multichannel offering that provides a seamless experience when using all of the retailer’s shopping channels” (Levy et al., 2013, p. 67). The common denominator of all three omnichannel retailing definitions is the seamlessness and integration of the shopping experience when using all channels.

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2.2 Free riding

Rapp et al. (2015) state in their paper that channel multiplicity may induce a customer behaviour named “research shopping”. While Chiu et al. (2011) identify four patterns of research shopping, the authors point out cross-channel free riding as the most threatening to retailers. Van Baal and Dach (2005) describes free riding as when a consumer use one retailer’s channel with the purpose of evaluating products and obtain information, to later place their business at another retailer. By doing this the consumer benefits from a resource which they in turn did not contribute to in return. (Van Baal and Dach, 2005). According to Van Baal and Dach (2005) consumers are able to free ride when a retail firm is unable to: (1) Charge separately for the services it provides, i.e. displaying product information. (2) Distinguish free riders from other customers. These conditions are hard for the average retailer to combat, as most retailers are unable to charge for standard presale services and are also unable to beforehand identify which shoppers will or will not complete their purchases at the retailer (Van Baal and Dach, 2005).

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2.3 Showrooming

While the concept of free riding has been studied for several decades (Arora et al., 2017), researchers have only in recent years started digging into the related concept of showrooming. Showrooming is presented by Kalyanam and Tsay (2013) as one of the many dimensions of free riding, a statement echoed by Gensler et al. (2017) who describe showrooming as a specific form of cross-channel free riding. Just as with free riding the exploited retailer is left with the expensive consequences when customers showroom, as the retailer’s costs are not covered by a purchase.

Rapp et al. (2015) argue in their research that a formal academic definition of showrooming is yet to be presented, yet some authors have made their own definitions of the concept. Verhoef et al. (2015) define showrooming in their research as “a specific form of research shopping in

which a shopper first searches offline and subsequently purchases online” (Verhoef et al.,

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2.3.1 Determinants of showrooming

The showrooming behaviour is steadily increasing in popularity (Rapp et al., 2015; Arora et al., 2017; Gensler et al., 2017), becoming a growing issue of concern for brick-and-mortars (Arora et al., 2017). In order to get a better understanding of showrooming and what drives the behaviour, a review of literature was performed, as it provides valuable insight in the phenomenon investigated. Even though showrooming research and scholarly insight into the antecedents of the behaviour is limited (Rapp et al., 2015; Daunt & Harris, 2017), a number of authors have presented possible determinants of consumers’ showrooming decisions. Prior research has yet to reach a common consensus of what determinants make consumers engage in showrooming behaviour, and in this following section determinants previously listed in research about showrooming will be categorized.

Gensler et al. (2017) argue in their research that consumers decide to showroom if the benefits of doing so outweigh its costs. The authors also argue that it is the consumers’ perceptions of channel-related benefits and costs, as well as how they are weighed, that drive their decision of whether to showroom or not (ibid). A similar statement is presented by Arora et al. (2017), who claim that the perceived search benefits offline and perceived purchase benefits online collectively leads to showrooming. Gensler et al. (2017) also highlight the importance of looking at not only the channel perceptions, but also the setting or context within which the purchase takes place. The authors therefore also take product-, shopping-, and consumer-related contextual variables into consideration (Gensler et al., 2017). In similar fashion, Daunt and Harris’s (2017) conceptual framework grounded in previous research takes characteristics of the products, consumers, and channels into consideration when examining the antecedents of showrooming.

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Product Characteristics

Determinant Explanation Author(s)

Product availability The greater the availability from multiple outlets, the

higher the risk of being exposed to showrooming.

Daunt & Harris (2017)

Product Price The higher the price, the more likely the product is

exposed to showrooming.

Daunt & Harris (2017) Kucuk & Maddux (2010)

Technological Speed of Change

Products that regularly are modified with new releases and updates are more likely to involve research activities.

Daunt & Harris (2017) Van Baal & Dach (2005)

Table 1. Product Characteristics

Consumer Characteristics

Age Younger consumers showroom more frequently compared to older consumers.

Dahana et al. (2017)

Price consciousness Price consciousness regards the degree to which

consumers focus on low prices. High price is positively associated with showrooming.

Arora et al. (2017) Dahana et al. (2017)

Prior knowledge Higher prior knowledge about a product category is

associated with a higher frequency in showrooming.

Dahana et al. (2017)

Product Involvement As a consumer’s involvement in a product increases,

so will their tendency to search for information and engage with store personnel to support their decision-making.

Daunt & Harris (2017) Dahana et al. (2017)

Shopping enjoyment Regards the consumer’s hedonism and pleasure to

browse the store. High enjoyment is positively associated with searching across several channels and showrooming behaviours.

Daunt & Harris (2017)

Technological Savviness

Consumers proficient in multichannel browsing are more likely to exploit different channels in their buying processes and switch channel to maximize on benefits.

Arora et al. (2017) Daunt & Harris (2017) Dahana et al. (2017)

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Channel Characteristics

Delivery time Waiting time for delivery is negatively associated with

showrooming.

Balakrishnan et al. (2014)

Level of knowledge

The competency and knowledge of sales personnel may reduce customers’ intentions to showroom, as a skilled sales staff will be able to find as well as satisfy the customers’ needs.

Bachrach et al. (2016) Luo et al. (2014)

Online service quality

If buying the product online is a hassle, consumers are less likely to showroom, as the monetary costs saved from buying online does not compensate for the resources spent.

Gensler et al. (2017)

Price dispersions /

Expected price savings

When the customer believes there to be a variety of prices online for the same product (i.e. high price dispersion) he or she is more likely to leave the store after collecting the desirable information as he or she expect to find it cheaper elsewhere and spend less money

Arora et al. (2017) Balakrishnan et al. (2014) Daunt & Harris (2017) Gensler et al. (2017) Rapp et al. (2017) Product diagnosticity / Uncertainty reduction / Regret avoidance

Uncertainty is a driver of showrooming behaviours, and in reducing such uncertainties, offline channels have the ability to solve this by letting consumers evaluate and examine the products immediately. This option is not provided by the online channels and therefore positively associated with showrooming. Arora et al. (2017) Balakrishnan et al. (2014) Dahana et al. (2017) Sale staff assistance

Sale staff provide consumers with help in the search of suitable products to match needs and requirements and is positively associated with showrooming.

Arora et al. (2017)

Time pressure When a consumer feels pressed for time he or she will be

less likely to showroom.

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Trust in personnel Distrust in personnel is according to Chio et al. (2017) and

Daunt and Harris (2017) positively associated with showrooming. Gensler et al. (2017) however argue that knowledgeable and trustworthy personnel can also be a driver of showrooming, as the personnel provide accurate and useful information.

Chiou et al. (2012) Daunt & Harris (2017 Gensler et al. (2017)

Waiting time for service / Sales person availability

Needing to wait due to low sales person availability may frustrate customers and waiting time is positively associated with showrooming

Gensler et al. (2017)

Table 3. Channel Characteristics

2.3.2 The effects of showrooming on the brick-and-mortar

Much of the previous showrooming research has focused on the consumer side of showrooming (Kokho Sit et al., 2018), while the research effects of showrooming on the exploited brick-and-mortar are more scarce. Thus, this study attempts to show a comprehensive view of the effects that the exploited firm may encounter. Through the review of showrooming literature four areas of the business that may be affected were identified:

profits (Arora et al., 2017; Balakrishnan et al., 2014; Chiou et al., 2012; Dahana et al., 2017;

Daunt & Harris, 2016; Gensler et al., 2017; Kalyanam & Tsay, 2013; Kokho Sit et al., 2018; Mehra et al., 2013, 2018; Rapp et al., 2015; Van Baal & Dach, 2005), offerings (Kalyanam & Tsay, 2013; Kokho Sit et al., 2018; Mehra et al., 2013, 2018), channels (Cao, 2014; Kalyanam & Tsay, 2013; Kokho Sit et al., 2018), and personnel (Bachrach et al., 2016; Chiou et al., 2016; Gensler et al., 2017; Kalyanam & Tsay, 2013; Rapp et al., 2015).

2.3.2.1 Effects on Profits

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13 Mehra et al. (2018) argue that showrooming increases price competition, which in turn leads to lower profits. Kalyanam and Tsay (2013) state in their research that rather than having the brick-and-mortars lower all their prices to match online competition, a strategy not useable by all actors due to cost structures according to Arora et al. (2017), price matching may be a better option for some retailers. Mehra et al. (2018) argue that price matching may be used by retailers as a short term strategy to curb showrooming, as it can be quickly implemented and no extensive changes in the retailers business model has to be performed. Through a price matching strategy the price advantage that fuel showrooming becomes eliminated (Kalyanam & Tsay, 2013; Kokho Sit et al., 2018; Mehra et al., 2013, 2018).

While Kokho Sit et al. (2018) recommend retailers to match competitors prices through price matching in order to become the customers’ preferred choice, Kalyanam and Tsay (2013) as well as Mehra et al. (2013, 2018) highlight the risks of price matching in their research. Firstly, using price matching as a strategy to curb showrooming leaves the brick-and-mortar dependent on the competitors’ actions, making the retailer vulnerable (Kalyanam and Tsay, 2013; Mehra et al., 2018). Kalyanam and Tsay (2013) further argue that adopting a price matching strategy may result in a price race towards the bottom, wiping out the competitors that are unable to follow. However, Kalyanam and Tsay (2013) also state that as competitors are forced out of business customers’ choices become reduced, resulting in raised prices in the long term, benefitting the retailers able to survive the race. Per contra, both Hay (1982) and Mehra et al. (2018) argue that price matching not always leads to price wars. Price matching may also have a collusive effect (Hay, 1982), where competitors may be able to raise prices without fear of losing market share (Mehra et al., 2018).

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brick-14 and-mortar openly and proactively offer price matching services to the showroomer while in-store. Kokho Sit et al. (2018) stress the importance of brick-and-mortar stores being proactive with price matching, using it as a selling argument to make the customer buy at the brick-and-mortar, as customers may not be comfortable or confident enough in asking the staff for a price match themselves. However, Kokho Sit et al. (2018) also argue that this may be a matter of culture, as bargaining practices may be more or less ingrained in certain cultures and societies. While bargaining according to Kokho Sit et al. (2018) is a quite common practice when shopping in Asia, this behaviour is less ingrained and less acceptable when shopping in the U.K., which in turn may come to affect the effectiveness of the strategy. However, Kalyanam and Tsay (2013) argue that openly offering a price match may have unintended consequences, in the form of encouraging the customers to become more price aware and price compare online. This may according to Kalyanam and Tsay (2013) result in making the customers simply forgo visiting the brick-and-mortar altogether in the future, missing the target altogether.

2.3.2.2 Effects on Offerings

Showrooming may also come to effect the product offerings and services provided by the brick-and-mortar retailer (Kalyanam & Tsay, 2013; Kokho Sit et al., 2018; Mehra et al., 2013, 2018). Kalyanam & Tsay (2013) state in their research that extensive showrooming of certain products may result in the brick-and-mortar to underinvest in promoting said product, or even choosing to no longer carry the showroomed product, as it is not profitable. Furthermore, Kalyanam and Tsay (2013) state that curbing freeriding is a possible motive behind the rise of products that are “web only” among multichannel retailers, implying that goods with high risks of being showroomed, or in other ways are unprofitable to have in-store, may come to move more and more online.

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15 (Kalyanam & Tsay, 2013; Mehra et al., 2018). Product exclusivity can be implemented in different ways (Mehra et al., 2018). Either the retailer may collaborate with a known brand or manufacturer and set up an exclusivity arrangement with said brand or manufacturer (Kalyanam & Tsay, 2013; Mehra et al., 2018), or through offering private label products, bearing the retailer-owned brand name (Kalyanam & Tsay, 2013). Through working with private label products the company is benefited through extensive pricing control, control over the products attributes and marketing, higher profit margins, as well as having the customers developing their loyalty to the retailer’s brand rather than to a manufacturer’s (ibid).

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2.3.2.3 Effects on Channels

Showrooming can also encompass the case in which a shopper research a product in company A’s physical store, to later purchase the product from company A’s website (Chiu, 2011; Kalyanam and Tsay, 2013; Chiou et al., 2016). While this shopping journey according to Kalyanam and Tsay (2013) often is encouraged by brick-and-mortar retailers, as it can be seen as positive for the retail chain as a whole, it can also be a creator of internal channel conflict among the retailer’s internal divisions (ibid). Kalyanam and Tsay (2013) state that this is especially a problem for brick-and-click retailers if the channels are managed as well as rewarded as quasi-independent entities, which may fuel competition between channels. The authors also argue that it may go as far as “some channels might regard others as free riders.” (Kalyanam and Tsay, 2013, p. 58). One strategy to mitigate this conflict that has been adopted by chains like Walmart and Best Buy is to give double credit for online purchases (Kalyanam and Tsay, 2013). In the case of Best Buy the retailer credits its stores when customer buys from the company’s website, and Walmart credit both the website as well as the store closest to the customer’s address (Kalyanam and Tsay, 2013). Another strategy suggested by Kalyanam and Tsay (2013) is using transfer pricing and channel specialization, where measurement and payment systems are set up to compensate each channel appropriately. Furthermore, Cao (2014) and Kokho Sit et al. (2018) argue that it is of great importance for retailers with many channels to have synchronized information and offerings across their different channels. Kokho Sit et al. (2018) further argue that distrust and disappointment may arise among customers when prices and/or other product information are not consistent across the channels of a brick-and-click retailer. In order to avert such negative consequences Cao (2014) and Kokho Sit et al. (2018) argue that brick-and-click retailers should work actively to keep prices and information consistent in all channels.

2.3.2.4 Effects on Personnel

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17 and coping behaviour. Self-efficacy is defined by Bandura (1994, as cited in Rapp et al., 2015, p. 360) as reflecting “the extent individuals believe they are capable of achieving

effective performance”, and relates positively to performance (Multon, Brown, & Lent, 1991;

Stajkovic & Luthans, 1998; Judge & Bono, 2001; Rapp et al., 2015). Williams (2010, as cited in Rapp et al., 2015) state that there are two primary beliefs that self-efficacy rests upon, firstly that an assignment can be performed, and secondly that this assignment will lead to a positive result.

Rapp et al. (2015) conclude in their research that showrooming has a negative impact on the self-efficacy and performance of the personnel. The authors further argue in their research that sales personnel’s performance and self-efficacy will likely continue to decline as showrooming grows in commonness and the number of potential customers leaving the stores empty-handed increases (Rapp et al., 2015). An accelerating downward spiral is therefore created, as sales personnel increasingly feel that no matter their efforts showrooming customers are still going to leave without finalizing a purchase (Rapp et al., 2015). In turn, this is likely to erode their performance at an even more accelerated rate (Rapp et al., 2015). Furthermore, Rapp et al. (2015) argue that when personnel observe that customers use mobile phones in store to collect information about their in-store products the diminishing effect on the personnel’s self-efficacy becomes more potent. Rapp et al. (2015) argue this to be the case as providing information is one of the personnel’s core purposes and a value-adding activity. While sales personnel for many years have played a pivotal role in the dissemination of product knowledge (Sharma, Levy, and Kumar, 2000; Weitz, Sujan, and Sujan, 1986; Rapp et al., 2015), customers are now able to forgo sales personnel and self-gather their desired information online while in-store, through the use of technology (e.g. mobile phones) (Spaid & Flint, 2014; Rapp et al., 2015) When customers use their phones rather than interact with personnel, feelings of redundancy may arise (Rapp et al., 2015). Rapp et al. (2015) argue in their research that many of their interviewees expressed feelings of being reduced to “checkout clerks” and “floor sweepers” rather than sales personnel, as the customers did not seek their assistance but rather consulted their phones for information.

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18 threat, which in turn further affect morale and wellbeing. A similar statement is presented by Chiou et al. (2016), stating that previous literature has suggested that the introduction of online channels and ecommerce likely inject uncertainty into the sales personnel’s job situations. This uncertainty further feeds the employees negative perceptions (Ashford et al., 1989; Chiou et al., 2016), and may further result in reduced satisfaction, reduced commitment, negatively affected wellbeing and / or intentions to quit (Ashford et al., 1989). Chiou et al. (2017) further argue that the sales personnel may fear being made redundant or replaced.

In addition to this, Lapoule and Colla (2016) state in their research that sales personnel working on commission-based salaries, or where pay based on sales effort in other ways are used as a motivational tool, may have their motivation heavily affected by showrooming. Lapoule and Colla (2016) further argue that companies using multiple channels should adapt their payment mechanisms in order to restore confidence among their employees, rewarding and sharing commission between all parties taking part in the sales process.

Other consequences of showrooming are presented by Bachrach et al. (2016 p. 123), who argue that showrooming may increase the stress felt by personnel, stemming from not being sure how to handle showrooming customers. Furthermore, Bachrach et al. (2016, p. 123-124) argue that showrooming customers can sometimes know more about the product they are researching than the sales personnel, which may induce feelings of helplessness and loss of control among the personnel.

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in-19 store perks to fight showrooming according to Kalyanam & Tsay (2013), as many shoppers still highly value certain aspects of finalizing their purchase offline at a physical store, such as easy, convenient returns and instant gratification (Chiou et al., 2016; Kalyanam & Tsay, 2013). Click-and-mortar retailers are especially benefited by such a strategy, as the click-and-mortar can highlight its offline as well as online perks (Kalyanam & Tsay, 2013).

In addition to this, Rapp et al. (2015) argue that sales personnel should adopt cross-selling as a strategy to combat showrooming. Cross-selling is defined by Rapp et al. (2015, p. 362) as

“the sale or attempted sale of items, usually complimentary, in addition to those initially intended for purchase.” Prior research suggests that when sales personnel use cross-selling

strategies it increases the likelihood of the customer buying the “primary” product from the retailer (Kamakura, 2007; Rapp et al., 2015). Why cross-selling is an effective strategy against showrooming may be partially explained through (1) that the price comparison performed by customers becomes more complicated (Kamakura, 2007; Rapp et al., 2015), and (2) that skilled personnel with product expertise are able to create attractive product bundles (Mulhern & Leone, 1991; Rapp et al., 2015). When cross-selling sales personnel are able to bundle various products together and offer the customer a lower overall package price (Mulhern & Leone, 1991), compared to the total price of the products when purchased individually (Rapp et al., 2015). Rapp et al. (2015, p. 362) argue that this “diminishes

consumers’ ability to establish equivalent product comparisons across channels for at least two reasons”. Firstly, Rapp et al. (2015) considers it unlikely for customers to be able to

recreate the same bundle online as the one presented by the sales personnel, as the products most likely have to be purchased individually. Secondly, even if the showroomer is able to recreate the bundle, the effort and time necessary to do so is by Rapp et al. (2015) deemed prohibitive, thus further reinforcing the value of in-store purchase (ibid). Furthermore, Rapp et al. (2015) argue that showroomers may not be aware of the scope of complementary products that are relevant or in other ways connected to their “primary” product. Thus, cross-selling may aid showroomers to reevaluate knowledge of their initial intended purchases, and

“further consider the salesperson’s expert guidance when making purchase decisions” (Rapp

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20 Kalyanam and Tsay (2013) state in their research that while improvements in customer service is a common tool used by brick-and-mortars to combat showrooming, this strategy is not without flaws. Kalyanam and Tsay (2013) state that any type of service that can be utilized without the customer needing to finalize a purchase is unreliable as a tool to combat showrooming, as the customer still can chose to finalize their purchase online. Instead, Kalyanam and Tsay (2013, p. 48) argue that retailers instead should focus on “staying within

striking distance of the prevailing online prices” and adopt improvements that will aid in

closing the sale either in-store or through their own websites.

2.4 Summary of theory

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21

3. Methodology

This chapter explains the reasoning and methodological choices that was made in the study. Further it presents the chosen industry and company to represent the case, followed by the data collection process, operationalization, and data analysis. Finally the quality of the study will be discussed.

3.1 Research approach and design

The approach used in this study is abductive and resulted in that theory, data collection and the analytical concepts evolved simultaneously, an approach described by Dubois and Gadde (2002) as ‘systematic combining’. The approach is useful for development of new theories (Dubois and Gadde, 2002) and by including features from both deductive and inductive approaches and thereby going back and forth between empirical findings and theory this thesis’ authors were able to get a better understanding of the investigated phenomenon that is showrooming. With an abductive approach new insights may occur (Dubois and Gadde, 2002) and therefore an exploratory research was chosen as its adaptable nature according to Saunders et al. (2009, p. 140) provide the researcher with flexibility. Considering that studies about showrooming are limited in quantity making the field rather unmapped (Daunt & Harris, 2017), the exploratory research serve this study’s purpose well as it is a valuable mean to shed new light on a phenomenon and appropriate when further clarity and understanding of a problem is needed (Saunders et al., 2009, p. 139). When conducting such, researchers are advised to be willing to change direction of the research when new data and insights appear (Saunders et al., 2009, p. 139). As an example of the previous statements, this study’s approach resulted in Channels being added as an analytical concept after first finding out about conflicts between the offline and online channels through our primary data collection.

3.2 Method choice – Qualitative

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22 qualitative approach, as this research will look at the showrooming phenomenon through data concerning perceptions and experiences collected from personnel in a firm exposed to, and exploited by, showroomers.

3.3 Research strategy – Single Case study

The research strategy chosen for this research is a single case study. A case study according to Yin (2009, p. 18) is “an empirical inquiry that investigates a contemporary phenomenon in

depth and within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident.” Yin (2009, p. 2) also state that case studies may be the

preferred method of choice when “(a) "how" or "why" questions are being posed, (b) the

investigator has little control over events, and (c) the focus is on a contemporary phenomenon within a real-life context”. As all previously mentioned conditions are applicable to this

research, a case study approach was deemed appropriate. Morris and Wood (1991, as cited in Saunders et al., 2009, p. 146) state in addition to this that if a researcher wants to gain a rich understanding of the context of the research, as well as the processes being enacted, using a case study would be of great interest. As this is in line with the goal of the research, the case in favour of using a case study approach was strengthened.

3.4 Industry selection and Unit of analysis

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23 In 2009 the Swedish pharmacy market was deregulated ending Apoteket AB’s monopoly and since the deregulation numerous of actors established themselves on the Swedish market (Apoteket AB, 2009, p. 6).

As of the deregulation of the market the non-prescription side of the industry has grown in sales and importance (Persson, 2010). While the prescription pharmaceuticals are currently responsible for 75 percent of the Swedish pharmacies’ turnover (The Swedish Pharmacy Association, 2017), this area of operation is not accountable for any major profits (Jansson & Wallér, 2015). On the contrary, on average, prescription pharmaceuticals only cover 88 percent of the costs, resulting in pharmacies making a loss on their prescription sales. (Jansson & Wallér, 2015). The pricing of prescription drugs is regulated in law, which prevents the retailers to change prices in order to increase profits (SOU 2017:15, p. 101), leading to that profit-losses must be covered in other ways. Jansson and Wallér (2015) state that pharmacies must generate 700 million SEK in profits from other articles than prescription pharmaceuticals, in order to cover only the handling costs of the prescription drugs. Non-prescription drugs and merchandise on the other hand are not price regulated (SOU 2017:15, p. 109), and the sales of these products are therefore vital to ensure profits for the pharmacies (Jansson & Wallér, 2015). In response to this, pharmacies have steadily broadened their non-prescription product ranges. (SOU 2017:15, 29) During the year 2009 to 2016 the merchandise sales at pharmacies nearly doubled in size, as they increased from 3.2 billion SEK to 6.1 billion SEK. (SOU 2017:15, 29)

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24 In 2008, the year before the deregulation, approximately 2 percent (SEK 260 million) of the pharmacy industry’s total sales came from e-commerce and phone sales. Today, the picture is different. During 2016 the Swedish pharmacies’ e-commerce sales of medicine and merchandise increased substantially, reaching SEK 1.7 billion, an increase of approximately 70 percent compared to the sales of 2015. (SOU 2017:15, 152) The e-commerce sales currently make up for 6.5 percent of the market’s total revenue (Apoteket AB, 2017, p. 9), a number that is estimated to increase to 8 - 15 percent in 2020 (SOU 2017:15, 29). Apoteket AB (2017, p. 26) state in their Annual and Sustainability Report 2017 that a consequence of rising e-commerce competition is a downward pressure on price. Several pharmacy actors has as a result of threatening online competition introduced cheaper online prices in their online channels, in order to remain competitive (Lagercrantz, 2017; Strömberg, 2017; Ohlén, 2018). This is also true for Apoteket AB, who through their digital channels offer a range of products for a cheaper price online, compared to their prices offline (Apoteket AB, n.d.).

3.4.1 Apoteket AB

Apoteket AB was chosen to represent our case as the company was the only pharmacy chain in Sweden to experience the move from monopoly to an open market, as well as being the first pharmacy with ecommerce, hence encountering multichannel competition when other players joined the market. It was also through connections at Apoteket AB the authors found that the showrooming phenomenon occurs in this industry and therefore they were deemed as appropriate to be used for this study. The company fulfils the criteria for this study as they have employees classified as knowledge workers, and that they are exposed to, and exploited by, showroomers. Furthermore, through the connections within the firm, we were provided with access to appropriate subjects for our qualitative data collection.

3.5 Literature and data collection

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25 known, and by reviewing what is written the researcher can establish the foundation for the study (Hancock and Algozzine, 2006, p. 26). The literature reviewed for this study consisted of articles, books, and white papers and took off with a narrow search using the word showrooming to later be extended and incorporate search words such as freeriding, research shopping, channel multiplicity, and multi- and omnichannel retailing. Literature was primarily found through online search engines and academic databases such as Uppsala University’s online library, Scopus, JSTOR, Sage Journals, and Google/Google Scholar. By looking at reference lists in articles and analyzing empirical data we were also introduced to new insights and aspects regarding showrooming, its building blocks, and its antecedents which further guided our route.

3.6 Primary Data Collection - Interviews

For this thesis interviews have been used in order to investigate the showrooming phenomenon within the pharmacy industry, as interviews according to Yin (2009, p. 106) are one of the most essential and important sources of case study information. Performing qualitative interviews are considered useful and appropriate when it is necessary for a researchers to understand the reasons behind the decisions the research participant has taken, or his/hers opinions and attitudes regarding a topic (Saunders et al., 2009, p. 324). Some strengths of using interviews when performing case studies are according to Yin (2009, p. 102) that interviews are targeted and insightful, as they focus directly on the topics of the case study as well as provide perceived causal inferences and explanations. Thus, the use of interviews was deemed to be an appropriate choice for collecting primary data.

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26 All interviews were conducted on a one-to-one basis, as suggested by Saunders et al. (2009, p. 321), with the thesis researchers together interviewing one interviewee at a time. The interview sessions lasted between 40 to 60 minutes. All interviews were actively chosen to be conducted ‘face to face’, compared to doing them online or through phone, which according to Bryman and Bell (2013, p. 219) is a more common way of interviewing when conducting research within business and economics. The motivations behind the active choice to perform all interviews face-to-face are several. Saunders et al. (2009, p. 350) and Bryman and Bell (2013, p. 222) argue that face-to-face interviews achieve higher levels of interactivity as well as richer and more spontaneous communication compared to online and phone interviews. Another advantage of conducting the interviews face-to-face is that it is easier for the interviewers to observe the interviewees’ body language or signs of discomfort (Bryman & Bell, 2013, p. 221). It is also easier for the interviewer to detect if the interviewee does not understand the question when conducting face-to-face interviews, and by this clarify or repeat the question. (ibid) All interviews took place in the respective workplace of the interviewee, as Saunders et al. (2009, p. 329) argue that the chosen location should be convenient for the interviewee as well as make him or her feel comfortable.

All interviews were conducted in Swedish, as it being the native and working language of the interviewees. The aim of interviewing the interviewees in their native language was to create a more relaxed atmosphere, as well as not having the interviewees restricted by their varying levels of English.

3.6.1 Sampling

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27 important that the respondents worked at Apoteket AB prior to the deregulation, in order to obtain data regarding perceptions of changes over the years. As one of the authors to this thesis have contacts within Apoteket AB we gained access to participants matching those criteria, and was given recommendations for possible participants. Not only was this convenient in order to get access to possible respondents, but it also resulted in that we felt that the respondents trusted our intentions for the data they provided, and further objects for the interviews were suggested along the way. The sampling technique used can be described as a non-probability purposive sampling, or a snowball technique (Saunders et al. 2009, p. 176).

A total of three pharmacy managers, two self-care managers, one self-care advisor, and one Assortment Coordinator & Category Manager at Apoteket AB’s Market Units representing six different pharmacies and the HQ were interviewed for this thesis. All interviewees as well as the name of the pharmacies they work for were given anonymity. Giving interviewees anonymity may aid in making participants give honest answers and true opinions (Saunders et al., p. 331).

Guest, Bunce and Johnson (2006, p. 59) state in their research that “guidelines for determining nonprobalistic samples sizes are virtually nonexistent”, and that how many interviews that are necessary to reach data saturation does not have a straightforward answer. Data saturation is defined by Saunders et al. (2009, p. 590) as “the stage when any additional data collected provides few, if any, new insights”, and Fusch and Ness (2015) argue that there is no one-size-fits-all method to reach said saturation. As little new information had been presented after the seventh interview the number of interviews were deemed sufficient.

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Respondent title and corresponding number

Location of pharmacy

Name and type of pharmacy Approximate length of interview Date Pharmacy Manager (Respondent 1) Västerås Pharmacy 1, Open-care. 60 minutes 2018-04-04 Self-Care Advisor (Respondent 2) Västerås Pharmacy 1, Open-care. 40 minutes 2018-04-05 Pharmacy Manager (Respondent 3) Köping Kungsör Pharmacy 2, Hospital pharmacy. Pharmacy 3, Open-care 60 minutes 2018-04-06 Self-Care Manager (Respondent 4) Surahammar Västerås Pharmacy 4, Open-care. Pharmacy 5, Open-care. 45 minutes 2018-04-11

Assortment Coordinator & Category Manager at the Market Unit (Respondent 5) Previously Stockholm. Now HQ Pharmacy 6, Open-care 40 minutes 2018-04-12 Pharmacy Manager (Respondent 6) Surahammar Västerås Pharmacy 4, Open-care Pharmacy 5, Open-care 40 minutes 2018-04-13 Self-Care Manager (Respondent 7) Västerås Pharmacy 1, Open-care 40 minutes 2018-04-16

Table 4. Overview of interviews 3.6.2 Operationalization

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Question Possible Follow-up questions Themes/ Sub-themes Corresponding literature How does showrooming affect your sales approach?

Do you act different when faced with a suspected

showroomer? Has showrooming changed how you work?

Effects on personnel Kalyanam & Tsay (2013) Rapp et al. (2015)

Table 5. Example of operationalization

3.7 Secondary data

While case studies according to Bhatnagar (2010) can be built on evidence from one source, the authors recommend that the data preferably be collected in a variety of ways. Bhatnagar (2010) also argue that studies are considered to have a higher quality when using different sources corroborating the same set of facts, as construct validity concerns are mitigated. Motivated by Bhatnagar’s (2010) statements secondary data was gathered to increase validity. The secondary data was collected from Apoteket AB’s website, Apoteket AB’s Annual and Sustainability reports, the Swedish Pharmacy Association’s business reports, e-barometern’s annual reports, State Public Reports (SOU), Swedish government bills, and newspaper articles.

3.8 Data analysis

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30 As with a thematic analysis the authors began to read and re-read the collected data in order to get familiarized with the material.

Prior to the analysis, the collected interview data were categorized so that it was easier for the authors to find relationships, patterns, and meanings in the different respondents’ perception of the phenomenon studied. To derive categories we looked at themes and topics from previous studies about consumer behavior and showrooming, which helped us to label and organize the raw material, as suggested by Saunders et al. (2009, p. 492). This was done throughout the data collection process which enabled us to re-categorize data as the process proceeded, making us better prepared for the next interview and the analysis. Statements, events, or facts that in some way were unusual, interesting, or differed compared to our prior understanding was highlighted to help us to analyze the material and draw conclusions from it, as suggested by Saunders et al. (2009, p. 492). For example, all raw data regarding the theme personnel was highlighted in yellow, and later divided into subcategories. Themes and categories from the collected material were then compared to existing concepts in theory in order to find differences or similarities. During this process we also made notes with our own reflections to make sure that our interpretations were separated from the raw data, which simplified our analysis.

Statement Code Note Theme Category Theory

“There is a campaign running where we are asked to re-direct traffic from our store to our own website, which we do not get any kick-back from, and are supposed to like…”

Negative attitude towards cross channel selling The respondent dissatisfied with redirecting sales to another channel. Channel cannibalism? Effects on personnel Channel conflict Chiou et al., 2016: Kalyanam and Tsay, 2013

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3.9 Research quality

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4. Empirics

In the following chapter the primary data of the study will be introduced. To begin data regarding the showrooming context will be presented, followed by the data connected to the four concepts; Effects on Price, Effects on Offerings, Effects on Channels, and finally Effects on Personnel.

4.1 The Showrooming Context

When asked to describe when they first started acknowledging the showrooming behaviour among their customers, the respondent’s answers ranged from 2015 to 2017. All respondents expressed that they believed the behaviour to have grown in popularity in parallel with the entrance and growth of the pure-play pharmacy Apotea.

While all respondents argue that it is hard to tell if a customer is a showroomer, some customers according to Respondent 1, 2, 3, 6, and 7 are giving clear indications of showrooming intentions. All five of them state that they encounter customers that at the end of the counselling state that Apotea.se sells the same product for a better price, and that the customer therefore will buy the product from them. Respondent 7 explains; “Sometimes there

may be even a spontaneous “Ah, they sell it for such and such at Apotea, then I will buy it there instead!” That happens and they can say it out loud, they are not thinking about the fact that we are different chains.” However, many times the behaviour is less obvious, where

personnel have a hard time knowing whether the customer in front of them is a genuine customer or a showroomer in disguise. Respondent 1 and 7 however state that they become suspicious when customers are carefully reading labels while openly browsing the websites of other retailers, such as Apotea.

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33 while showrooming, the younger customers are more subtle and independent in their showrooming behaviour.

Even though none of the respondents perceive showrooming to be of any major concern at this stage, all the respondents claim that the phenomenon is getting more and more present in their line of business. All of the respondents also believe that showrooming will keep on growing in commonness among their customers, as a result of increased e-commerce (Respondent 1, 2, 4, and 7), increased technological savviness (Respondent 2, 3, 4, and 7), and the upcoming shift in generations (Respondent 1, 2, 3, 4, 5, 6, and 7). As expressed by Respondent 3; “Showrooming will increase, yes, I certainly think so. People are learning that

they can compare prices online. And there's a whole new generation that is growing up with computers and knows how it works. The elderly who are not as knowledgeable and capable disappear and then comes the next generation.”

4.2 Empirical findings: Profits

While Respondent 1 and 4 express the fear of not getting any income for the time spent with a showrooming consumer, and all respondents have noticed the behaviour and its increased commonness, it is today not considered to have any devastating impact on their profits. Consequences of declining profits due to an increase of the behaviour is believed to be less working hours for the employees (Respondent 1 and 3), cutbacks on personnel (Respondent 2, 3, 6, and 7), reduction of the number of physical pharmacies (respondent 1 and 7), reduced store areas (Respondent 5), forced changes in the business plans regarding what services the physical stores provide (Respondent 1, 5, 6, and 7), changes in product offering (Respondent 1, 3, 4, 5, and 6), how products are displayed (Respondent 1 and 5), and what channels products are offered in (Respondent 5).

All respondents claim that Apoteket AB’s customers are showing indications of a growing price awareness and price consciousness. Price differences are also considered by all respondents to be the main reason to why showrooming is performed. All respondents express that this awareness is something they have experienced as growing among their customers as of the deregulation of the monopoly and Respondent 1 state; “They are a lot more price

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34 and 3 both explain that while many customers were very price conscious before the deregulation, they believe that this price consciousness has escalated as a result of competition, cheaper e-commerce options and online price comparing tools. Respondent 3 point out how easy it is to use the internet to find who has the cheapest price in seconds, something she claims to not have experienced in her line of work earlier, and Respondent 1 express a similar statement when talking about how easy it is to get an overview over the price picture of products the pharmacies offer today.

The easy access to price comparisons is also expressed to be reflected in the behaviour of Apoteket AB’s customers as all respondents perceive that some customers are very openly showing this price consciousness through verbalising their views of pricing and price differences between Apoteket AB and competing firms. In particular the prices of the pure-play competitor Apotea are being mentioned by Respondent 1, 2, 3, 4, 6, and 7. Respondent 2 states that the customers visiting his pharmacy are prone to point out price differences between Apoteket AB and Apotea.se, something Respondent 4 also express in her interview;

“Some customers may point out that “Yes, but it is cheaper at Apotea!”, and then you need to explain why they are able to sell it for a cheaper price. They don’t have to pay for stores or a lot of personnel, of course they can push prices!”.

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35 conflict, as some customers feel that it is unfair that they are not given the online price when purchasing from her. As the employees don’t have the opportunity to give discounts or offer online prices on in-store purchases, redirecting to their own online channel is the only tool to curb showrooming in regards to offering price reductions (Respondent 1).

4.3 Empirical findings: Offerings

Respondent 1 and 5 argue that ever since the deregulation of the monopoly Apoteket AB has been extending the product offerings and is trying to move away from being seen as a pharmacy only offering boring necessity products. Respondent 1 and 5 describes that Apoteket AB are working towards being seen as a provider of everything customers need in terms of health and wellness, providing a good shopping experience with more exciting products. Respondent 5 state; “With the assortment development that is today we move to

different segments, we drift. So I believe that the customers are more curious of our products now than they used to be.” Many of the new products introduced to Apoteket AB’s assortment

are also found in other markets than the pharmacy market, and are described by respondent 1 as having more hedonic rather than utilitarian qualities, such as make up, nail polishes, face masks, and snacks. In that sense respondent 5 argue that Apoteket AB have created more shopping enjoyment, but at the same time she perceives that these more hedonistic products also render in greater showrooming behaviours compared to pure utilitarian products. Respondent 7 echoes Respondent 5’s statement, arguing that she mostly experiences showrooming tendencies among customers looking for merchandise products, such as skin care and beauty products, rather than non-prescription medications. Respondent 7 further explains that she believes shopping for skin care products to be a fun experience, compared to shopping “traditional pharmaceuticals”, associated with illness or pain. In addition to this Respondent 1, 2, 3, 4, and 7 argue that non-prescription products often are needed more urgently compared to merchandise products, resulting in less showrooming. With statements such as: “If people are having a headache, they are not going like “Oh what a headache I

have. I’ll order a pack of Alvedon on Apotea.se.”” (Respondent 7) and “[...] regarding products needed in an instant there is no such behaviour present.” (Respondent 1) it is argued

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36 As previously mentioned there is a fear of being forced to make changes in the product offering as a result of reduced profits (Respondent 1, 3, 4, 5, and 6). This possible development is considered to be a setback as Respondent 3, 4, and 5 express excitement and optimism over the extended product offerings at Apoteket AB, and would be disappointed if the assortment had to shrink. As expressed by Respondent 4; “If the behaviour would continue

to grow we may have to remove some products again, and that would be a shame!”

Respondents 1, 4, 5, and 6 believe that such a development would be especially devastating for Apoteket AB, as they believe that the key to the company’s future competitiveness partially lies in a continuing broadening of the product assortment.

However, a broadening of assortment also puts additional pressure on the employees to learn about all the new products in order to be able to give customers guidance (Respondent 1 and 6). This need for knowledge from a wider product range is expressed with fear of not being able to answer all the customers’ questions (Respondent 6). Respondent 6 explains; “We get a

lot of new product, loads of them, it can be three to four hundred products that arrive at our doorstep, just like that. And it is impossible to learn everything thoroughly about all these products, and then people maybe expect us, with our knowledge, to know everything about all the products, but we just can’t. So there I may feel some insecurity myself, that I am not able to give the customer what the customers believe I can give.”

Another development in the physical pharmacy industry is that more services are being offered, and Respondent 5 claim: “[....] even if there always will be products that are

important for the consumer to receive right away we are moving towards more of a service focus than product focus.”. Connected to this Respondent 3 state that as Apoteket AB is

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37 showrooming impossible (Respondent 1, 3, and 5) but also they attract sales of products surrounding the treatment or service (Respondent 3 and 5).

Respondent 1 state in her interview that Apoteket AB since before the deregulation have put a lot of effort into their own private label brands; Apoliva, Apotekets, Försvarets Hudsalva, and Apofri, where the first three are sold exclusively by Apoteket AB. Respondent 1 explains that the company also during the years has obtained exclusive rights to sell a variety of non-private label brands. Their latest exclusive collaboration is with Zlatan Sport, where Apoteket AB currently is the only pharmacy chain carrying the product line (Respondent 1). However, while Respondent 1 believe that these ventures are effective strategies to deter showrooming, she points out that this is not their primary purpose, rather she argues other economic motivations are responsible for such efforts.

Respondent 1, 3, and 5 explain that Apoteket AB’s online channel carries all of the products sold by Apoteket AB, while the assortment in most, if not all, pharmacies are more limited. Respondent 3 explains; “It is impossible to have everything in-store. It is impossible, no

matter the size of your pharmacy.” She also states that while it is quite clear on the website

that a certain products is an “online exclusive” product, some customers still come to her pharmacy believing that they can buy the product in-store. Furthermore, Respondent 3 also explain that some products are available on the website at as web-only products in order to test their attractiveness among customers. Respondent 3 explains; “There is a lot of skin care

products than initially is available online only, and if you can see that they sell well they sometimes are added to the pharmacies’ assortments.” However, while Respondent 3 does

not believe showrooming to be the sole reason to why Apoteket AB has begun labelling certain items being online exclusive, she does believe it to be a contributing factor.

4.4 Empirical findings: Channels

Respondent 1, 3, and 7 state that Apoteket AB wants their physical stores to more actively drive customers towards using their website, apoteket.se. However, these efforts are not appreciated by all. Respondent 7 state; “There is a campaign running where we are asked to

- Showrooming – Displayed and played.