6 minute read
Is the war between online and offline over?
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Is the war between online and offline over?
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And now, is the distinction between transactional retailers and experiential?
Situ Live is almost experiential overload, a sensory and emotional extravaganza designed to appeal directly to the core of the hedonic shopper.
Over the last few years, there has been a tendency to see retail in terms of two distinct camps, online and offline.
With the prevalence now of rapid delivery solutions for convenience retailers, the simplicity and availability of e-commerce solutions and the growth of the contactless store, the reality is that the separation of online and offline is over.
There is simply hybrid retail, the ability to choose, as a consumer whether I want to order any product in any way I wish. All retailers can be online, or mobile, or social – we have reached the stage where retailers can be truly channel agnostic.
The last mile options are vast, and headless commerce combined with microservice based architectures mean that the same options, the same ranges can be available instantly on whatever channel you choose.
The key differentiator in retail now is how you view the interaction with your customer,
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regardless of channel, are you a transactional or an experiential retailer?
Fundamentally there are two types of customer: the utilitarian or mission orientated customer and the hedonic.
The utilitarian customer is task focused, looking for a retail experience that elevates simplicity, convenience and generally value. They are transactional. They have a need and want to take care of that need quickly and efficiently, and with as little effort as possible.
As in everything there are degrees of utilitarianism. For some convenience trumps all – look at the price differentials between the large superstore’s convenience offering and their full superstore offering – whilst for others they have a price focus as well, but ultimately for such customers “efficiency can be understood as the optimal ratio between the output, i.e. purchase the right product or service at the right price, and input, i.e. shopping efforts or use of resources (e.g. time, means of transport)”.
For this consumer, and to this type of retailer, great customer service is to deliver the product in as efficient and seamless a manner as possible. At the right price point.
Hedonic customers on the other hand are far more intrinsically focused. Where the utilitarian consumer is focused on the outcome of the retail experience and getting there as quickly as possible, the hedonic customer is more interested in the retail experience itself.
They are looking for pleasure, for fun from the experience of shopping. They are looking to explore, they want an emotional connection to the shopping experience. This is not only a human connection, although in offline retail a human connection will enhance the emotional connection.
In their 2003 paper, Hedonic shopping motivations, Mark Arnold and Kristy Reynolds argue that there are six categories of hedonic shopping:
• Adventure shopping for stimulation and excitement • Gratification shopping to enhance mood • Social shopping to experience pleasure from interacting with others • Idea shopping to stay current with trends • Role shopping to gain pleasure from buying for others • Value shopping to gain pleasure from finding deals (though not necessarily acting on them)
Primark are a great example of a transactional retailer. You may not know exactly what kind of tee shirt you want, but you’re pretty sure you’ll get what you want there, with as little fuss as possible.
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Primark are a great example of a transactional retailer. You may not know exactly what kind of tee shirt you want, but you’re pretty sure you’ll get what you want there, with as little fuss as possible.
Of course, people do want an uplifting experience, to have some fun browsing whilst there, hence why Primark stores themselves are beautiful places, but the focus is on efficient, convenient shopping. Online, Amazon are the epitome of a transactional retailer.
Similarly with the launch of Amazon Shop and Go, as well as any other number of such stores, convenience stores are becoming far more frictionless with more options for either Click and Collect, in-store purchase or delivery.
Again, there is an element of experientiality in the Amazon model. Online there is the instant thrill of “fantasy browsing” but the focus is on making the ability to buy your car oil or ball pump as quick as possible. This also goes some way to explaining the launch and instant demise of the 4-star store.
On the other side, for the hedonic consumer, less focused on a single transactional outcome but more looking for inspiration, for an experience, to be shown, to be wowed.
The experiential shopper will still want an experience as frictionless as possible, but that doesn’t mean it has to be fast. Indeed, if you get the experience right, the experiential shopper will linger, will relish interacting with product, with the in-store team.
An example of this is the Situ Live brand. This is a location where you can browse, handle and experience a wide range of products, including cars. The whole premise is almost experiential overload, a sensory and emotional extravaganza designed to appeal directly to the core of the hedonic shopper.
Similarly, the likes of Nike, JD Sport etc are creating play areas within store, where products can be used as they are meant to be. Book stores have always been welcoming, but as part of the fight back against Amazon and e-readers they are becoming places not just to browse books, but to enjoy and explore.
Online the hype of the metaverse maybe overblown today, but AR/VR and videobased retail offer a way of emulating the human interaction and satisfy the emotional impulses of the hedonic shopper.
What may this mean for your IT strategy?
For a start deciding on where, as a retailer, you fit in the transactional/experiential range will indicate where you need to focus.
More transactional? Look to implement a fast, seamless customer experience, contactless checkout, mobile browsing and purchasing. Limited interaction in-store. Store staff are there to facilitate the efficient delivery of the transaction.
You still need to know and understand the customer, to be able to provide personalised offerings, but these should be at the Point of Sale or as they add products to their app. Again, the key word is seamless.
If you are more experiential, your strategy across all elements of retail needs to be to focus on the customer’s emotional and mood enhancing needs.
Where possible still look to make appropriate elements seamless (contactless checkout etc) but empower the in-store teams with instant clientelling capabilities to allow them to engage in a truly personal manner with the customer(s).
In-store VR can allow the customer to access a much larger range of product and experience them almost live. Magic mirrors can allow fashion customers to accessorise as much as they want, allowing them to pick a core outfit or item and then add as many additional, matching products as required.
AI driven live merchandising can suggest items that would suit the selected products. For the retailer there is an inbuild upsell and cross sell capability. For the consumer there is the joy in discovery and gratification from exploring many of the hedonic motivations.
About the author:
Mike Cadden is an experienced retail IT director and CIO with 25 years’ experience running technology teams and strategic delivery for many leading UK and international retailers.
