The challenging research-shopper

The Financial Times reported that Amazon is investing in new warehouses, operations and systems, in order to be able to offer same-day delivery. Subsequently, analysts (for instance, here) predicted that this would be the final nail in the coffin of local high-street retailers – i.e., that once customers are able to get their goods within a few hours of choosing them online, there will be no reason to go to a high-street store.

I disagree.

Don’t get me wrong. Same-day delivery is not good news for high-street retailers. But how many things do we buy on the high-street purely because we can not – or do not want to – wait one day or two to receive it at home?

Personally, when I purchase something on Amazon, I value the very wide choice, the availability and the extensive product information – both from the manufacturer / publisher, and from other users. And, yes, I like to know that it is usually cheaper than elsewhere. What’s more, I choose the product from the comfort of my house, at hours that suit me. IN other words, getting it quickly is nice, but not the deal breaker.

Take this example.

A few weeks ago we had to replace our microwave. We went to our local retailer, where an employee showed us the various options. While he was very, very nice, he wasn’t telling us much more than what was printed on the labels and boxes. At some point, we were all (salesman included!) huddled around the smartphone screen… looking at the product descriptions and the customer reviews on Amazon. We noticed and mentioned that the product was considerably cheaper on Amazon. To which the employee added, cheerfully, that if we bought it on the shop, we could also buy additional warranty for the microwave for just £2 a month. Really! That was his best offer.

By this point, the kids were getting impatient, and we decided to head home and do further research before buying the microwave. We checked what time the shop was closing and left.

It will not surprise you to read that we ended up buying the microwave online. To put it simply, there was no reason why we should drive back to the shop to get it – we had much more information and choice online than we could ever get in the shop, we did not have to worry about the children, we bought the microwave when we were ready rather than when the shop was open… and we did not have to drive to the shop again to get it.

The behaviour that I just described is called the ‘research-shopper’ phenomenon. It refers to customers gathering information about a product in one channel and buying it elsewhere, as illustrated in table 1.

Table 1. Research-shopping behaviours

Channels Searched Channel of Purchase Shopper Type
Channel A of Firm 1 Channel A Firm 1 One-stop shopper
Channel A of Firm 1 Channel B of Firm 1 Loyal Research-shopper
Channel A of Firm 1 Channel B of Firm 2 Competitive Research-shopper

Source: Neslin, S. A., and Shankar, V. (2009), Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions, Journal of Interactive Marketing, 23(1), 70-81

As explained by Verhoef and colleagues (2007), this behaviour is driven by three factors that may reinforce each other:

  • Attribute differences – the characteristics of the channel that make it particularly good for a task (e.g., obtain information)
  • Customer lock-in – the scope for the channel to prevent the customer from leaving
  • Cross-channel synergy – where the customer benefits from using various channels from the same firm.

So, if it is true that websites are good sources of information, choice, etc it is also true that high-street shops have advantages such as location and the human interaction. Indeed, it is this interface that makes shops so much better than websites at locking-in consumers.

Retailers need to look for ways of adding value to research-shoppers. Dealing with their pain points. Solving problems in creative ways.

Here is one example. Not long ago, I ordered something from Gap. It was not the right size and I had to return it. One of the options was a service whereby I dropped the package at one of a number of named local retailers – there were several possible outlets: a petrol station, a newsagent and, if I am not mistaken, a pub, to name just a few. So, on my way to work, I stopped by the petrol station (which I do not usually use), dropped the package… and also filled up the car’s tank, and bought some milk and other essential items.

As far as the microwave was concerned, I might have gone back to the high-street retailer if they offered something of value to me – not the insurance, mind you! For instance, if they had collected the old, faulty microwave and disposed of it for me. Certainly, disposing of microwaves is not their core business… but is a solution to a problem that customers have when they buy microwaves. Just like collecting packages is not a core business for the petrol station, but still got them extra sales.

What keeps you buying from local shops?

8 thoughts on “The challenging research-shopper

  1. The most pleasant shopping experience I have in mind was in a florist in Abingdon – it was a beautiful sunny morning – our daughter had just been born – I was a bit tired and vulnerable – but they were playing Corinne Bailey Rae – at 9.30am the flowers were looking and smelling fresh and the staff were cheerful and helpful.

    It was a shopping delight. I bought and felt good and though “How nice it would be to work in a florist” Life was good. I was wowed. (And new-Dad sleep deprived)

    I also have had a same electrical goods shopping experience – on a retail park in Reading – they sell on products and features without knowing the goods. If they asked me about my kitchen and my lifestyle and what kinds of products I current have they would know that my wife is a sucker for stainless steel and her “gadgets” and they could have up-sold me to a higher brand and “lead me to choice” and closed a deal.

    I really dont want to be shopping about to save 5% on a one-off appliance – I want to get on with my life. Its the low competence experience that gets in the way – not the price for me. Im easily wowed by warm genuine service – I love watching that art. But if they get it wrong they find Im not a mug.

    I saw Amazon only make around 7% marking on their goods – its hard being “operationally excellent” – human touch is a differentiator – it is all the difference and it preserves margins.

    You can keep your self service tills too – I want a real human on the till – someone friendly that I can connect with. Its a chance to touch someones day. Thats shopping for me IRL – its human.

    Regards

    James

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  2. Dear Ana,
    I came across your post and I am delighted to read about your opinion. I am currently working on my dissertation for MSc Marketing at the University of Edinburgh about Retail Showrooming. I am looking into the relationship between loyalty and showrooming. But I am at an early stage as I am still reading the literature. I would appreciate whether you have any literature papers in mind that would describe this retail trend or at least something related.

    Regards,
    Andreea

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    1. Hi Andreea, it sounds like a great project! I think that you need to clarify (for your dissertation): 1) loyalty to what – the retailer or the brand that is being bought?; and 2) what do you mean by loyalty (behaviour or attitude – there is a lot written regarding this, and I am sure that your supervisor can point you in the right direction here).

      In terms of reading, I think that the 2 papers mentioned in the post are very good places to start. The Neslin and Shankar (2009) paper helps understand the phenomenon and break it down into different types of showrooming behaviour. The middle row (and maybe teh first one) could be linked to the idea of loyalty to the retail outlet, though the second one much more pragmatic than the first one. The final one could be driven by loyalty to the brand. The Verhoef et al (2007) paper could help you explore how the outlets can (or not) create (behavioural) loyalty. Then, a way to identify further work in this area is to look for papers that cite these ones… but I am sure you learned that in your Research Methods module 😉

      You may also find this discussion relevant: http://www.mycustomer.com/video/showrooming-social-shopping-and-ipads-ibm-s-advice-smarter-commerce

      I hope it goes well… and keep in touch. I would love to learn what you find out.

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      1. Dear Ana,

        Thank you very much for your reply. I appreciate the information provided about the papers and the link. I will definitely keep you posted.
        Regards,
        Andreea

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      2. Dear Ana,

        I am delighted to let you know that I recently completed my Master thesis on “The Showrooming Effect in Retail – an empirical study on the athletic footwear market” at the University of Edinburgh. I would like to thank you for your help and guidance throughout my research. I appreciate your help very much.

        I am looking forward to keep in touch with you.

        Regards,

        Andreea Georgescu
        PG MSc Marketing
        University of Edinburgh
        andreeageorgescu04@gmail.com

        Like

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