Customer Insight Research Paper
The aim of the interview of the interview was to find out some of the factors that motivate customers to choose online shopping and the factors that motivate other customers to opt for off-line sopping. The interview also sought to know and to establish the behavior patterns between the two groups of consumers, online and off-line shoppers. In the interview, customers started by identifying themselves either as online or offline shoppers, after which the interviewer asked them to describe the main reasons that motivate their mode of purchase, as well as their purchase patterns.
The main reason of choosing questions aimed at identifying the motivation factors was to find out the differences between the two groups. For instance, a question such as; “why do you choose to buy products online?” was included in the interview questions because it gives the customer an opportunity to give a direct response that would give the interviewer a clear understanding of some of the factors.
Analysis of Results
The results of the online shoppers indicated that 45 percent of people in a highly competitive business environment would get out of the shops and make online payments at a discount of 2.5 percent. This shows that customers opting for online shopping and payment are enticed by the low price offers that retailers and wholesalers provide for such payments. The percentage increases to 60 percent for those customers who choose online shopping after getting a discount as high as 5 percent for all the purchases they make. Similarly, when retailers offer high discount rates which may reach 20 percent, only 13 percent of shoppers remain in selling stores to complete their purchases.
These results are substantial evidence that online discounts are a motivating factor that influences the customers’ decision to purchase goods online. The survey also found out that the most common products bought online are electronics such as TVs, movies game items, laptops and audio equipment. However, many online shoppers showed little concern for home appliances such as fryers, kettles and vacuum cleaners.
During the interview, the results also showed that show- rooming behavior is also significant feature that leaves many mortar and brick sellers with few offline customers. Many online customers reveled that show-rooming is anew habit that gives them an opportunity to compare prices from one store to another, just by the use of their mobile phones. Online customers also mentioned carrying out price comparisons from one in-store to another is more expensive compared to online stores. Online customers have changed their shopping to use the in-store premises as a step in their purchase processes, and not as the final point.
Consumers decide to shop their household products because of instrumental reasons to achieve certain goals and because of experiential motives (Arnould & Wallendorf, 1994, pp 486). However, in the interview, goal oriented customers tend to more common than experiential and instrumental oriented customers. Based on the interview, the interviewers employed 5 online and 5 offline groups and many online customers attributed their behavior to availability of information about the product, wide range of products and the opportunity to avoid unwanted contacts such as spouses or sales agents in the retail premises.
The goal oriented online shopping gives rise to experiences that are too involving for customers (Batra & Ahtola, 1999, pp 167), but which leads to little commitment to the buyers. Customers indicated that they buy online when they want, and have the convenience to abandon the shopping cart when they feel the products on sale are not pleasant. Whereas some customers ware more likely to explain their offline shopping rather than online shopping in experiential purposes, there was more experiential motivation for customers who choose to shop online than the offline shoppers.
On the other hand, offline shoppers attribute their motivation to the social aspect and experiential benefits associated with visits to retail and wholesale in-stores. Many of these buyers describe online shopping as never enjoyable and sociable. They also described their liking for offline shopping as an opportunity to ask for a lot of information about the products they purchase. Others claimed that in- store purchases offers after sales services that many online stores were found to be lacking. Because of information security reasons (Citrin, Sprott, Silverman & Stem, 2000, pp 298), some offline shoppers did indicate lack of trust that their card numbers and identification documents were safe if used to pay for goods online. A good number of off-line shoppers also indicated that the opportunity to bargain for good commodity prices motivates them to make purchases from in-store retailers since it enables them to save a lot of money.
Another factor given by the offline shoppers for the dislike of online shopping is the difficulty experienced when inspecting a product or service that retailers sell online. This is attributed to internet shortcomings that do not enable a customer to employ other senses such a touch or taste, and consumers have to rely only on sight. Other offline customers dislike online shopping because of the fact that they have to wait for the product delivery, especially in cases of overseas shopping. Risks such as pilferage, perishable products and damage during transportation highly discourage some customers from shopping online (Chen & Tan, 2004, pp 78). In this group of shoppers, the psychological risks are perceived to be more demotivating than even the financial risks. Thus, any initiatives by retailers to offer discounts on online goods and series does not some offline shoppers to change their shopping decisions.
Customer behavior literature
According to Foucault and Scheufele (2002, pp 411), in a study involving 1000 customers in the US, researchers used multiple hypothetical scenarios of showrooms of ten items with different prices to find out the behavior of online customers. The results showed that 44 percent of online customers used mobile phones to influence their purchase choices when purchasing goods online. The researchers also found out that when the price difference between the online and in-store products is more than 5 dollars, customers showed a preference for the online products. This is similar to the views given by online customers in the interviews conducted to understand consumer behavior for online shoppers.
The US research further profiled their customers based on age and gender, and the outcome of the study indicated that young female shoppers made online purchases more frequently than any other age bracket. On the other hand, old male shoppers whose minimum age is 50 years came out as the group of shoppers who were easily swayed to make purchases offline in retail stores. Other customers who happened to get advice from sales agents were 12.5 percent likely to make purchases offline. The results of this study are similar to the outcome of the interviews conducted in the group survey, since many of the choices that a majority of shoppers made are similar in motive and influence.
According to Wachman (2012, pp 14), people spent nearly 8 billion US dollars in December 2011 on goods bought 0onine despite the difficulty shopping experiences that are usually associated with the month of December. According to the Capgemini research, a business consultancy organization, people spent remarkable 68 billion US dollars online in the year 2011. This is an indication that the number f online shoppers is ever growing as people move from the conventional culture of in-store purchases. According to Graham (2012), in UK, online purchases account for 17 percent of the total retail business, and this predicted to increase with the growth in mobile technology. The number of retailers launching online stores is also growing at a remarkable rate.
Other literature sources indicate that utilitarian or goal oriented shopping is understood to be rational, deliberate and efficient (Kelly, 1998, pp 45). Therefore, the online search provides the medium for this task because the costs associated with dramatically lower than in in-store search. Moreover, some shoppers prefer to carry out efficient searches on the online stores with remarkably few clicks of the computer to obtain the details they need. In line with the objectives of goal oriented online search, shoppers who employ internet services in their purchase tasks end up saving a lot of time.
According to Modahl (2000, pp 67), some customers do not perceive online purchases to be shopping; rather they perceive it to be a “buying” experience. As well, other online shoppers believe that they only decide to buy products online when they are convinced that they need the particular product, which further describes online shopping to be attracting a majority of customers who have a planned activity. Some online shopping surveys indicated that offline shoppers are more impulsive than online shoppers, because of limited accessibility and convenience and the influence by sales people in retail stores.
Unlike online shopping (Rayport, & Sviokla, 1999, pp 89), offline shoppers are proud of the personal associations they establish with business owners, which can help them build loyalty. Such loyal customers have the advantage of accessing goods on credit, or on hire purchase agreements, a feature that online shoppers are denied. Other customers who enjoy using senses beyond the sense of sight are well placed to fulfill their pleasure by shopping online since in- store commodities provide them with the opportunity to touch, feel, smell or even taste some of the goods before they pay form them. As observed in the analysis of results in the section above, this was one of the reason some customers prefer getting goods from an in-store retail, as opposed to online stores.
Some businesses perceive offline shopping to be appropriate over online shopping because it helps them manage the products that customers buy. For instance, as much a restaurant can employ online advertisement services, it cannot manage to serve its clients online (To, Liao & Lin, 2007, pp 778). Similarly, an auto dealer may not be effective by leasing a car online, because of security and lease agreement procedures and requirements.
Marketing strategy and recommendations
In order to reap from the changes in consumer behavior, retailers have to be keen when designing their marketing techniques. A lot of focus should be on the provision of goods based on location and population features. As observed in the analysis of results, young female shoppers are most likely to spend more money shopping online than older male who are easily swayed by sales agents. Thus products which female consumers need to be marketed or sold online, while products meant for the old generation can be kept in in-retail premises.
Many brands sold to the middle and low market ends continue to report poor sales results, while luxurious products that target high end customers are continuing to generate profits. This scenario is partly attributed to the spending behavior of consumers spending [patterns whereby middle and low income consumers are squeezed by inflation, while the wealthy are continuing to earn goo d income. In order to cope up with these market changes, retailers and wholesalers have to employ a wide range of marketing strategies that target each group of consumers in the market.
E-retail business activities remain a significant component of the broad retail trend (Spiggle, 1994, pp 498), and marketers have to incorporate it in all the strategic company plans. Despite the reduction in consumers’ disposable income, online shopping continues to record impressive sales growth every year. In order to motivate a number of offline shoppers who are demotivated to shop online by psychological factors, retailers and companies need to implement appropriate initiatives that address the psychological concerns of such customers.
Online grocery businesses are in the most sophisticated field, and to make the business efficient, they can give consumers the chance to choose the nearest collection and deliver points that enable consumers to access the products in reasonable time. Availability of storage facilities and frozen food is also a technique to see business people benefit from online ventures. It is worth noting that dealing with consumable goods such as drinks vegetables or fruits need a high standard of hygiene; thus, retailers need to ascertain the hygiene levels of the agents they appoint to distribute goods on the retailers’ behalf.
By putting in place measures to encourage online shoppers develop loyalty in commodities and brands, organizations and companies need to incorporate information security protocols that will assure buyers of the safety of their bank accounts, and the need to trust the websites. Once customers are convinced that their details are safe, retailers will be able to provide for the needs of customers in order to attract other buyers.