In this article, we provide a classification that distinguishes online versus physical retailer. And then we can examine how these differences may influence consumer behavior.
For example, we suggest that online retailing is typically more mobile in nature and has a high level of accessibility, and offers a flexible assortment of products that can be easily customized for each individual customer. In contrast, physical retailing is usually stationary in nature, has limited accessibility, and typically offers a fixed assortment of products that most likely managers.
Thus, this article suggests that these two types of retailers have different attributes, that these attributes have different influences according to a customer's particular situation. Let me give you an example. Say its 1 o'clock in the afternoon, and you want to buy a new t-shirt, you don't have a specific design in mind, you just feel the need for a new t-shirt, and you have a clothing store nearby, you're probably more likely to visit this store to buy this shirt than to visit an online retailer. The second study I'd like to discuss is a more recent study. It was published in the Marketing Science Institute Reports in 2015. This study is by Michael Sciandra and Jeff Inman, they're both at the University of Pittsburgh, and they examined how the use of Smartphones affects shopping behavior in grocery stores. It's a really interesting study. They interviewed 2,000 grocery store shoppers across the U.S., both before and after they entered the physical store. And they asked questions, such as, what do you plan to buy before they went in, and after they come out, the interviewers asked the shoppers what they actually bought, and then compared the difference. In addition, they also asked about their Smartphone usage in the store, if they use a Smartphone and what they use it for. The results of these surveys were quite interesting. For example, they found that only about 15 percent of shoppers use their phones while shopping. So if you do this, you're in the minority.
They then asked how these phones were used, and they found that the vast majority of usage was to actually talk or text with family or friends while shopping, instead of using their phones for shopping-related tasks, such as checking prices, very few people did that. So it was used for more social than for information purposes.
3:33However, what's most interesting is they found that when shoppers were busy talking or texting to their friends, they forgot to purchase a lot of the things they planned on buying. They found that, on average, these distracted shoppers forgot to buy one-third of their pre-purchased planned products. And they also engage in higher levels of impulsive buying, buying things they didn't plan to buy ahead of time. So the results of this study suggest that Smartphones actually distract shoppers by taking their focus away from the shopping task, and that this distraction is likely to reduce the purchase of items that were planned while increasing the purchase of unplanned items.
Now that we've seen this academic research, let's talk about some practical recommendations in terms of what physical retailers can do to adapt to this changing digital retail landscape. First of all, my first recommendation is to market to shoppers.
In recent years, there's been lots of increased focus on understanding and influencing the behavior of shoppers once they enter a physical store.
This development is called shopper marketing and has produced a number of tools and strategies for enhancing retail performance and enhancing the ability of physical retailers to be more successful in a digital environment. For example, in the U.S., grocery stores are starting to introduce smart shopping carts that allow customers to keep track of the things they buy and put in their cart by scanning their barcodes. And also these, these new smart shopping carts can send the customer personalized ads and promotions as they wind their way through the, the grocery store. Another way that physical retailers can market to customers is to make the shopping experience more enjoyable. For example, many shopping malls around the world are now turning to entertainment centers, complete with amusement rides, waterslides, and some even have ski slopes. The second recommendation is to enhance the physical by adding the digital.
So another way that physical retailers can meet the challenge posed by digital tools, such as the internet, is to employ these tools themselves. For example, most retailers have established their own websites and allow customers to use this channel for both information, as well as purchase.
In addition, some forward-looking retailers are starting to digitize the in-store experience.
For example, in Brazil the clothing retail, C&A has high-tech hangers that display the number of likes, just like on Facebook, display the number of likes that item of clothing has received from fellow shoppers.
Third, use the power of touch.
A growing body of research suggests that many consumers have a strong desire, and even a strong need, to physically touch products before they buy them.
In addition, consumers are more likely to buy a product if they've been able to touch it ahead of time.
This may be one reason why most people prefer to shop in physical stores rather than digital ones, especially for products such as clothing, food, and furniture, in which touch conveys lots of information.
The ability to touch a product before buying it is an inherent advantage for physical retailers. Thus, these retailers should leverage this advantage as fully as possible. For example, the New York furniture store, Coco-Mat, let's tired shoppers take a nap on its mattresses. In addition to taking advantage of a consumers need for touch, it's also a great way to keep customers in the store for a longer period of time. Finally, tiny and temporary.
The days of the big bucks store are numbered. They're too big and their costs are too high. In addition, they cost a lot to shut them down when they're not performing. Thus, rather than making such a large and risky investment, retailers can reduce this risk and save money by setting up a temporary pop-up store. These are small retail stores that exist for a limited period of time, which may be as short as even a single day. Because of their small footprint and temporary duration, these stores have low-fixed cost, but often generate substantial attention and increased customer traffic. For example, in 2011, the German clothing firm, Adidas, opened up a pop-up store in Barcelona, Spain that looked like a giant shoebox. Well those are my thoughts about the new retail landscape. I look forward to hearing your thoughts and your examples of how you see the physical retailer adapting to our new digital world.
For example, we suggest that online retailing is typically more mobile in nature and has a high level of accessibility, and offers a flexible assortment of products that can be easily customized for each individual customer. In contrast, physical retailing is usually stationary in nature, has limited accessibility, and typically offers a fixed assortment of products that most likely managers.
Thus, this article suggests that these two types of retailers have different attributes, that these attributes have different influences according to a customer's particular situation. Let me give you an example. Say its 1 o'clock in the afternoon, and you want to buy a new t-shirt, you don't have a specific design in mind, you just feel the need for a new t-shirt, and you have a clothing store nearby, you're probably more likely to visit this store to buy this shirt than to visit an online retailer. The second study I'd like to discuss is a more recent study. It was published in the Marketing Science Institute Reports in 2015. This study is by Michael Sciandra and Jeff Inman, they're both at the University of Pittsburgh, and they examined how the use of Smartphones affects shopping behavior in grocery stores. It's a really interesting study. They interviewed 2,000 grocery store shoppers across the U.S., both before and after they entered the physical store. And they asked questions, such as, what do you plan to buy before they went in, and after they come out, the interviewers asked the shoppers what they actually bought, and then compared the difference. In addition, they also asked about their Smartphone usage in the store, if they use a Smartphone and what they use it for. The results of these surveys were quite interesting. For example, they found that only about 15 percent of shoppers use their phones while shopping. So if you do this, you're in the minority.
They then asked how these phones were used, and they found that the vast majority of usage was to actually talk or text with family or friends while shopping, instead of using their phones for shopping-related tasks, such as checking prices, very few people did that. So it was used for more social than for information purposes.
3:33However, what's most interesting is they found that when shoppers were busy talking or texting to their friends, they forgot to purchase a lot of the things they planned on buying. They found that, on average, these distracted shoppers forgot to buy one-third of their pre-purchased planned products. And they also engage in higher levels of impulsive buying, buying things they didn't plan to buy ahead of time. So the results of this study suggest that Smartphones actually distract shoppers by taking their focus away from the shopping task, and that this distraction is likely to reduce the purchase of items that were planned while increasing the purchase of unplanned items.
Now that we've seen this academic research, let's talk about some practical recommendations in terms of what physical retailers can do to adapt to this changing digital retail landscape. First of all, my first recommendation is to market to shoppers.
In recent years, there's been lots of increased focus on understanding and influencing the behavior of shoppers once they enter a physical store.
This development is called shopper marketing and has produced a number of tools and strategies for enhancing retail performance and enhancing the ability of physical retailers to be more successful in a digital environment. For example, in the U.S., grocery stores are starting to introduce smart shopping carts that allow customers to keep track of the things they buy and put in their cart by scanning their barcodes. And also these, these new smart shopping carts can send the customer personalized ads and promotions as they wind their way through the, the grocery store. Another way that physical retailers can market to customers is to make the shopping experience more enjoyable. For example, many shopping malls around the world are now turning to entertainment centers, complete with amusement rides, waterslides, and some even have ski slopes. The second recommendation is to enhance the physical by adding the digital.
So another way that physical retailers can meet the challenge posed by digital tools, such as the internet, is to employ these tools themselves. For example, most retailers have established their own websites and allow customers to use this channel for both information, as well as purchase.
In addition, some forward-looking retailers are starting to digitize the in-store experience.
For example, in Brazil the clothing retail, C&A has high-tech hangers that display the number of likes, just like on Facebook, display the number of likes that item of clothing has received from fellow shoppers.
Third, use the power of touch.
A growing body of research suggests that many consumers have a strong desire, and even a strong need, to physically touch products before they buy them.
In addition, consumers are more likely to buy a product if they've been able to touch it ahead of time.
This may be one reason why most people prefer to shop in physical stores rather than digital ones, especially for products such as clothing, food, and furniture, in which touch conveys lots of information.
The ability to touch a product before buying it is an inherent advantage for physical retailers. Thus, these retailers should leverage this advantage as fully as possible. For example, the New York furniture store, Coco-Mat, let's tired shoppers take a nap on its mattresses. In addition to taking advantage of a consumers need for touch, it's also a great way to keep customers in the store for a longer period of time. Finally, tiny and temporary.
The days of the big bucks store are numbered. They're too big and their costs are too high. In addition, they cost a lot to shut them down when they're not performing. Thus, rather than making such a large and risky investment, retailers can reduce this risk and save money by setting up a temporary pop-up store. These are small retail stores that exist for a limited period of time, which may be as short as even a single day. Because of their small footprint and temporary duration, these stores have low-fixed cost, but often generate substantial attention and increased customer traffic. For example, in 2011, the German clothing firm, Adidas, opened up a pop-up store in Barcelona, Spain that looked like a giant shoebox. Well those are my thoughts about the new retail landscape. I look forward to hearing your thoughts and your examples of how you see the physical retailer adapting to our new digital world.
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