I’m seeing an interesting trend with regard to the mind of the online shopper vs. the offline shopper. What I’m about to explain has deep implications for what the future of retail looks like.
E-commerce vs. in-store commerce is a question I get asked frequently by both retailers and e-commerce companies. While I capture quite a bit of data on what products are researched vs. purchased online every quarter, I was interested to see if there is a different set of factors which influence the online buyer mindset vs. the offline buyer. Sure enough, I found some key distinctions.
What stood out to me the most is the online buying mindset is most influenced by price, with 78% of respondents saying price was the biggest factor in their decision to purchase a product. Contrast that with the offline buyer where only 45% of people said price was the primary factor in their decision to purchase. So what is changing? That is likely the most interesting part of this.
First, I interpret this to be the result of the internet as a resource for research on what to buy. If there is a product you are comfortable enough to not have to go see at retail, or you went and checked it out at retail then purchased it online, your decision was set and now you were just looking for the best price. This is likely the common consumer behaviour behind online purchasing. Once your mind is made up, the mindset becomes who has the best deal.
One thing that came out of the in-store mindset research was, with many specific categories, technology being key among them, 43% of consumers said they had an idea of what they wanted when going into the store but would make their final decision after seeing and feeling the products. This was the most popular answer in the question set for this retail study. Now, the in-store shopping experience didn’t always lead to the purchase, but the key takeaway here is it did influence which product they ultimately bought, even if they went back online and looked for the best price. I believe this has huge retail implications and one of the reasons I think Amazon is opening stores.
Retail is still essential in helping consumers decide on certain products. This is clear from my study. Most consumers say when they enter a store, their mind is fully made up. It also suggests there is still an opportunity at retail to help consumers decide. Yet, only 10% of respondents in this study said they will seek the help of the retail associate to help them make a decision. Essentially, they will decide for themselves but want to go see the products before they do. My takeaway here is the positioning and packaging is still very important in the retail environment. What is on the package, how it looks, the opportunity to see, touch, and even try the product, are all key parts of this decision-making process. Retail sales people? Not so much.
How physical retailers understand and adjust to this new reality is key. I strongly believe retail will become more specialized where depth trumps breadth. Consumers can find breadth online but the opportunity to capture depth or specialty at retail is likely the larger opportunity. This is going to be very hard for big box retailers to adjust to, which is why this Amazon store strategy is one to observe very closely.