Post Summary: Part 1 of a discussion around the next generation "High Street 2.0" concept, and the drivers that are likely to lead us there.
In my last post on The Virtual High Street, I mentioned that depending on what I'm shopping for, like many users I sometimes identify the product offline and then look for a bargain online, but as that wouldn't be limited to high street retailers I felt it was better explored in another post. Anyway to take that topic further, I'm going to look a little closer at the reasons that drive customers to browse offline without buying, only to then buy online (usually somewhere else) instead of in-store.
This is hugely relevant to retailers whose primary revenue channels are their real world high street shops, not just because of the impact on conversion rates, but because the trend implies that their offline customer experience needs to be improved to provide customers with in-store access to the benefits of buying online.
I am in other words leading up to a discussion around cross-channel symbiosis, and the evolution of high street stores from one-dimensional product pushers into broader experience focused outlets, in the way that static dial-up generation websites are now evolving along the rich experience web 2.0 route. Some are doing this already, but more from the web-space into the offline world, like Etsy, who've just opened a real world store in Brooklyn; or ZoZa who tried a physical store for customers to try before buying online only (and failed); or former cosmetics pure play Bluemercury.com who've now set up physical outlets for customers who want to sample before buying. Who knows, maybe we're seeing the start of the next generation high street – or as Julian recently joked – the High Street 2.0?
But back to the point of this post… key reasons why consumers browse offline but then buy online instead of closing the sale in-store
- Bargains / cheaper prices (through general search and via shopping bots)
If you just want one to consider one primary driver for this trend, then I'd suggest this is the one. Consumers want to know not just that they're getting the best deal, but also that they aren't being ripped off in any way. The proliferation of shopping bots (price comparison sites) like bizrate and kelkoo are making this so much easier that it is a real threat to any retailer whose customer goes online. It probably outweighs all the others to the point of making them little more than value-add considerations. For any product that is sold by multiple retailers, this is a major risk to consider, especially now that consumers have the internet on their mobiles and can pretty compare while actually in-store.
- Validate product/item quality and function (via online information and reviews before buying)
For functional products, particularly electronics, I prefer to be sure I'm not wasting my money, particularly on items I can't really test out. I want to know the realities behind the sales blurb and the knockdown price, and right now there's no way of finding this or comparing against equivalents, except online at review sites like CNET.
- Avoid instore/cashier queues
I hate queuing and unless I absolutely need the product then and there, am very likely to just go back home and order it online from somewhere.
- Delivery rather than carry home on buses / trains (convenience)
If it's a hot day, or I've already got things with me, or I'm on my way to somewhere else, or I just generally am not feeling like trekking around laden with shopping bags, I'm very likely to head home and make the order online, ideally from somewhere with free or cheap delivery/postage, or even somewhere that lets me pick-up in store at some later more convenient time.
- Search for variant availability in other stores
If the store doesn't have my size, or the colour I want, or the specific variant of the product that's customised the way I want it, I'm most likely going to leave the store and go online to see if any other branches have it, or if another shop stocks it instead. As with all the other drivers to online browsing, the problem is that I may never actually bother with the product any further, or even bother to go that particular retailer's website instead of someone else's.
- Leverage online promotions / vouchers
I know that retailers set these up to encourage people to go online, but essentially all this does is cannibalise offline sales, because the vouchers are not redeemable in-store. Personally I feel this is a major inhibitor to developing symbiotic revenue channels.
Other reasons for buying online rather than in-store
- Easier payment through one-click accounts (e.g. Amazon)
Who wants go through the whole business of queuing, waiting for someone else to scan and pack your product, handing cards over and waiting for it to register chip and pin and so on, when you can simply select the item, click once and then sit back and wait for it to turn up? Why don't stores have this facility?
- Accessories for product listings
I find this very useful online. If I buy a camera in-store at PC World, I get a camera, but absolutely no information to help me consider useful accessories. If I buy the same product on their website I get a list of accessories that supplement that product – appropriate lenses, cases, leads, cards etc.
- Related product listings and “Other people bought this” type information
Similar to above, I like shopping for things in spaces where I'm provided with ideas for complementary items. If I'm buying a badminton racket, then what about related bags, shoes, apparel, shuttles etc. I don't want to have to walk around some sports super store to find the matching bag in the bag section, or shoes in the shoe section etc. If I'm buying jeans I want to see shoes or t-shirts that might go well – ok so I personally am not enough of a shopper to care about this on a clothes front, but I can imagine a whole bunch of people who do, and sometimes knowing what other people bought is excellent fodder for shopping ideas.
- Auto-history of purchases – leading to seller recommendations
The problem with buying in-store, even from the same store, is that there is no history of what you bought. What if you wanted the same item you bought two years ago, but can't remember what it's called? What if you don't really know what you want to buy, but just feel like a quick bit of retail therapy? Isn't it great to be able to go onto your Amazon store and see lists of items that might just be interesting based on things you've bought before? Buying on website like this is like walking into a shop to buy an iPod, and the shop floor assistant suggesting an iRiver because it's more compatible with the speaker system you bought last week, and then handing you a selection of music that you just might like. How convenient, and how much more of an incentive to check the product out online after seeing it in-store.
The major issue for high street retailers here, is that once the consumer leaves the store and goes online, the only reason for them to visit the same store's website would be if the product identified is completely specific to that brand, for e.g. a particular clothing item. In any other case, the user's online journey will very likely lead them elsewhere… somewhere cheaper, with a more fulfilling retail experience; so understanding and countering these drivers will be key success criteria against online competition.
In parts 2 and 3, I'll consider the concept of the High Street 2.0 and try and use some of the above drivers to suggest ideas for leveraging on-line value-adds in-store, and to discuss how retailers can begin to create the next generation high street.