Working Together – Online and Offline Retail Sales
Bauer Research Looks at the Synergy of Online and Offline Stores
Published on November 19, 2019
Assistant Professor of Marketing Kitty Wang.
Despite much news to the contrary, online and offline stores can create synergy and boost sales. The work of Bauer College Assistant Professor of Marketing Kitty Wang and other researchers is focused on the fine-grained details of consumer behavior that will create successful retailing strategies going forward.
Wang’s recent research looks at how different retail channels create synergies through marketing communication, how luxury fashion firms strategically determine their advertising campaign content, how information is used in consumers’ decision-making process in the retailing context, and the dual role of key opinion leaders in shaping product design trends. She is currently teaching Marketing Research and CRM-Data Driven Marketing at Bauer.
Some of her research-driven insights on the future of retail follow:
- Online versus Offline Channels
Although the online stores can’t compete with brick and mortar locations when it comes to products you want to see or feel in person, it is a much cheaper way of reaching a broader audience. Companies wonder if offline stores will cannibalize their online store sales at locations where customers have easy access to the brick and mortar stores. However, when consumers stop by a store in person and gain more information about the company, it has a “billboard effect,” Wang says, solidifying the brand in the mind of the consumer, acquiring consumers who would not have purchased through the online channel otherwise, and creating more sales both online and offline.
Consumers can also gain product information through the physical stores, “especially those (products) with ‘non-digital attributes’ such as fit and feel” as Wang puts it. The offline stores particularly affect the customers who have difficulties choosing products that fit, and substantially decrease their return rate.
- Brick and Mortar Evolution
More offline retail locations will be in the form of “show rooms” – they can offer plenty of service and a memorable presence, but won’t necessarily have storerooms for inventory. Customers will be able to try on or feel and see goods in person, and such stores will provide a photogenic backdrop for social media influencers on Instagram, Facebook or other pages. “It will be a place to curate the product, to create stories, styles and images,” Wang said.
Not only do customers get experiences the online channel cannot provide, these showrooms also “super-charge” the potential customers, Wang explains further. “Customers acquired offline go on to shop more often, and spend more for each shopping trip, compared to those acquired through an online channel,” Wang said. “And those customers are more likely to purchase the higher priced items and also less likely to return as much. The channel by which the customer is acquired matters in the long run.”
- Augmented Reality (AR) Technology
The use of next generation AR options that help customers determine the fit and feel of clothing when try-on is not feasible or less convenient, or which help consumers visualize how furniture fills a personalized space, will change shopping experiences, whether online or offline. “It should be integrated into offline settings so it can help with the storytelling and help the experience,” Wang said.
- Social Media Appeals
“Time is running out!” may be a popular social media appeal designed to get customers to purchase things in a hurry, but it’s not effective unless retailers provide information about why something is a great deal or worth buying, Wang said. “Customers are smart. If the appeal contains very little potential information beyond the fact that there is a limited sale, this attempt to create a sense of urgency doesn’t really work,” she said. Retailers are likely to be more successful if they include information about an item’s popularity, sales ranking, etc.