By Dr. Gary Edwards, Empathica
Recently, online fashion retailer Piperlime announced plans to open its first brick-and-mortar location in New York City. For many, the announcement seemed to fly in the face of conventional wisdom given the competitive pricing and other advantages e-commerce providers have over traditional retailers.
Why would a successful e-tailer like Piperlime want to take on the additional cost and headaches associated with a physical store?
Not surprisingly, the answer has absolutely nothing to do with price – but with a growing realization that for certain products and types of buying experiences, consumers still prefer in-store customer experiences.
In-store customer experiences still count: Piperlime’s planned foray into the brick-and-mortar space isn’t an anomaly. Several other major online brands have either opened physical stores or plan to do so in the near future. In fact, with Amazon, eBay, and Google entering the fray, the list of e-tailers and e-commerce heavyweights that may be setting up shop at a location near you is a hit parade of the world’s leading online brands.
The addition of physical stores is being driven by an awareness of the inherent limitations of the online customer experience and an appreciation for the fact that consumers simply demand in-store opportunities for certain types of products. Online providers are also demonstrating a newfound appreciation for the value propositions at the heart of the in-store shopping experience:
Human contact. It’s been said before, but consumers enjoy the human connection they get when they visit a brand’s brick-and-mortar location. In-store sales associates can really make a difference with customers when it comes to driving brand loyalty and other key metrics. By some estimates, sales associates can increase basket size by 35% or more through personal recommendations and other tactics that e-tailers now need to master to connect with consumers in the brand’s physical store setting.
Hands-on demos. Some kinds of products need to be physically demonstrated to consumers. This is especially true for products that are new or unfamiliar. For example, Google has created brick-and-mortar opportunities to showcase its Chrome product, using standalone departments within other brands’ physical store space. This allows consumers to test drive their product in a supported environment, which significantly increases the product’s appeal to potential users. Although in-store demos may be limited to a small percentage of the brand’s overall target market, the hope is that customers who have hands-on product interactions will share their experience via social media and other channels.
Product interactions. Certain types of products lend themselves to in-store experiences. For example, consumers of high touch products like clothing or even furniture prefer the option of tangible product interactions – they want to be able to touch or try on products before they commit to a purchase. In many instances, these consumers also want to receive feedback from sales associates, creating opportunities for in-store salespeople to validate their buying decisions and increase basket size.
“Click-and-brick” opportunities. The use of smartphones to enhance brick-and-mortar experiences is skyrocketing. In growing numbers, consumers are leveraging mobile technology to perform on-the-spot product reviews, price comparisons and more. Digital brands that venture into the physical store space already have a strong online presence. By combining that presence with other technologies (e.g. Google Glasses, QR codes, etc.), retailers can create unique in-store experiences that are exclusive to “click-and-brick” retailers, surpassing the experiences that are offered by brands located solely in the digital or brick-and-mortar space.
In many ways, the expansion from the cybersphere to the storefront boils down to the need for more intimate shopping experiences in certain product categories. Repeat purchases, familiar products and items that don’t require customer intimacy (for example, books) will continue to dominate the online-only space. But for new fashions, new technologies and new products, customers will increasingly require more “hands on” product interaction – and in-store experiences that have been strategically crafted by their favorite online brands.
Dr. Gary Edwards, chief customer officer at Empathica, is responsible for oversight of sales, marketing, client strategy, marketing science and retail insights. For over 15 years prior, Edwards led worldwide and domestic research projects in customer and employee research.