I have recently been reading the excellent book, Why We Buy – The Science of Shopping by Paco Underhill. In it, he raised some points which really highlight to me the fact that bricks and mortar stores will always have a role to play in the retail environment. In my opinion it is unlikely that retail locations will be completely replaced by E-commerce, M-Commerce or F-Commerce, ever. To begin the discussion, lets look at defining shopping in a way that frames it as more than the simple acquisition of goods to fulfil a need.
Shopping: experiencing that portion of the world which is deemed for sale, using our senses of sight, touch, smell, taste or hearing as basis of the decision making process. (Ref. Paco Underhill)
The key message for me here is the neccessary sensory aspect is lacking in online retailing. Clearly you aren’t able to touch, smell or taste products without physically being instore. It is alot harder to truly understand the selling points of a product without being able to experience it fully. Take a look at shoppers as they wander round a store, picking things up, looking them over, taking them out of the pack, exploring and discovering. Further to this point, impulse purchases are often a result of touching and experiencing the product and indentifying the benefits it holds on the spot.
Merchandising can be just as powerful as advertising. For the most part we like to purchase based on trial and touch.
Why do we want to touch and experience things before we buy them? Firstly, for many products the tactile qualities of the product are a key selling point, such as luxury clothing from Tom Ford or manchester and linen. Even if the tactile qualities of the product don’t neccesarily require it be touched, they often still need to be experienced to get a feel for their benefits. Take technology products such as tablets, until you’ve had a go on one, flicking through some photos and articles, you really can’t tell how useful they really are.
So what else do stores offer that online retailing struggles to replicate?
Brand Experience: The instore environment can be tailored to deliver an incredibly strong brand experience, stronger then any press ad, TVC or web page. The store design and fit out, music, staff, location and surrounding stores all add up to deliver a message to people about your company and its values. Are you a high end store with exclusive location, plush interior and knowledgable staff or a discount retailer with a large store, bulk merchandising and convenient car parking? These choices alter how people perceive your company in a big way. Music also sets the tone of the environment, no self respecting teenager would shop in a store playing classical violin concertos.
Discovery: Instore you can create an environment which encourages discovery, exploring the store and experiencing the product. Sure this occurs on the internet naturally but instore it’s a much more experiential journey. Point of Sale which creates clarity of where you are in the store without oversaturating the information helps add to this. It sets the tone of the products around it but leaves the opportunity to explore the actual products in detail. For example using fashion imagery rather than text description of exact products. Sounds and smells can also be controlled, which can lead people through the store. Bakerys in supermarkets fill the store with the aroma of fresh bread, alluring you to discover and purchase the freshly baked bread.
Talking: Stores attract groups of people, if discussion can be fostered, the products begin to start selling themselves. If for example a group of girls are out looking for jeans, they will chat about the products and which looks best on each other, then perhaps running into friends and start getting their opinions also. This conversation my spread to the shoppers around them, bringing them in to the discussion. Sure it may be argued that this can be replicated to an extent online with F-Commerce (social shopping), but I don’t think it’s quite the same as the organic face to face conversation that can occur in a store environment.
Where does this leave online retailing to fit into the picture?
Obviously it will be a requirement for all businesses to offer their products online in some capacity in future if they wish to make the most of their revenue opportunities. I see it working in tandem with their retail locations. Bricks and mortar stores will be about delivering a strong brand experience for those who visit, allowing people to touch and experience the products in a controlled environment. Online retailing will then open a new avenue of sales rather than canabalising stores. Those that aren’t able to reach your physical stores perhaps due to location or lack of time, are able to purchase. It’s also great for making convenient repeat purchases on products you are already familiar with or low involvement purchases such as groceries. The convenience of being able to shop from a laptop, mobile or tablet, 24/7, 7 days a week is something people will come to expect and is an opportunty for retailers especially considering online stores don’t require staffing to be open and don’t have the same cost overheads.
Online retailing also allows retailers to take advantage of The Long Tail, a theory by Chris Anderson that there is actually more money in the “non-hits” rather than the “hits” as there is a substantially larger amount of them. It is too expensive for a bookstore for example to stock on a shelf a 15 year old book on the history of extinct moth species, filling them instead with the latest Harry Potter. However since online it costs nothing to have it available and you may actually sell one or two a year, add all these “non-hit” purchases up and you have a large revenue stream.
Technology is affecting the way retailers are doing business just as it is effecting the way we advertise to people but I don’t think there will ever be a substitute for the good old fashioned retail outlet.
If you’re interested in reading Why We Buy, you can purchase the book here: http://www.amazon.com/Why-We-Buy-Science-Shopping/dp/0684849143