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11.27.2012

Taking Stock: Getting to know the 'in-line' shopper | Retail in Asia

Taking Stock: Getting to know the 'in-line' shopper | Retail in Asia

Great article and interesting projection.
But wait. In Japan, "in-line" shoppers have been switching from in store to online freely WITHOUT a smartphone.

Yes, the in-line shoppers of Japan feel comfortable trying things on for size in a brick and mortar store, and then going online to their "keitai" or mobile shopping sites to make the purchase.

In such cases, retailers are not really cutting costs for that particular sale - rather, instead of ringing up the sales where a sales assistant has spent time with the consumer, that top line is being recorded as an online sale... But could they have made that sale without the brick and mortar store? And can one not argue that having the brick and mortar store has actually saved the online store from potential exchanges due to size not being right or returns due to expectations or fit being different/not right?

I am not sure I can agree with the notion that smartphone users are more likely to shop online than "keitai" users when it comes to Japan. Because smartphones are more expensive than "keitai" mobile phones, their users are wealthier and older - unless of course, we are talking about students on a family plan paid for by parents. So let's refer to the "account owners" - the people who actually pay for the plans. In this case, smartphone users are older and wealthier, but tend to be more conservative when it comes to shopping behavior.

But the whole point is that in-line shopping is already here to stay and the article highlights the importance of retailers making a fundamental shift in their thinking about online and off line shopping.
They are one and the same because the consumers are one and the same.

In-line shopping has additional benefits to the aforementioned about returns and exchange costs. I believe it also helps to cut down on opportunity loss due to stock outs. Consumers used to in-line shopping will go online if their size is not available and make the purchase on the spot, rather than to place an order through the retail outlet and come back at a later date by which time they may have (a) changed their minds; or (b) purchased an alternative somewhere else.

And I have no doubt that in-line purchases will increase. Not necessarily because more smartphones will be in the market, but because that is how consumers are shopping now.

I myself have recently experienced a huge benefit through in-line shopping - for of all things, a smartphone!

BlackBerry phones have such a small market share in Japan that I can never actually get my hands on a unit at a store. They need to be ordered through the store and I was told it may take up to 7 days for the store to get one. But they could not tell me when that would be.

This is Japan. A seven-day window is NOT acceptable. I am used to being told exactly what date, and often, by what time ordered items would be ready for me to pick up.

So I was sitting in front of the sales assistant in a NTT Docomo shop, him on his computer checking inventory and ready to place an order for me. I went online with my iPhone (because my Blackberry had suddenly died and hence, I needed a replacement), and got onto the Docomo Online Store. In a matter of minutes, I was able to place an order for a new BlackBerry using my accumulated loyalty points for a 60% discount on the unit, and even got a tracking number for my parcel which would be delivered to my home in two days between 12:00 pm and 14:00 - the time slot I chose.

I guess it is more accurate to say that my online experience was more beneficial to me as a consumer than my in store experience. And I wonder how the sales assistant felt about that. How can a consumer get better service than a directly operated retail outlet? Perhaps that is the difference between an internal logistics system and using a courier.

Of course, as an avid and very loyal BlackBerry user, I probably would not have purchased a different smartphone regardless of whether I was online or in a store. But it did help to be in the store to actually see a demo model and be confident in my choice.

A recent article in the NIKKEI indicated that LINE, Japan's home grown free chat and call service as well as SNS, has officially launched commercial accounts for brands and businesses as it has been proven that vouchers and comments posted on LINE has a material impact on generating traffic to brick and mortar stores.

Official figures indicate that LINE has 75 million users in 230 countries, but 40% of the users are Japanese and in Japan. According to the NIKKEI, Lawsons, the convenient store giant, has distributed 1.5 million 50% discount coupons for "L chiki" (chicken), retailing for 128 yen per piece. Of those, 100,000 consumers actually came to the store to use their vouchers. In a market where average coupon response rates are around 3%, LINE delivers 7% to 8%, making it worthwhile for businesses to take the service's "Online to Off Line" business concept seriously.

But do these vouchers only work in that way?

I don't think so.

More than once, I have actually been in a store, saw POP signs that said "email newsletter subscribers can receive 5% off today - show us your vouchers at check out" or "don't forget to show us your discount vouchers from the App" AND THEN gone online in the store to fetch my coupon for the discount I did not even know I was eligible for before I walked into the store.

This happens because my inbox and direct messages box are already quite full of daily commercial announcements and I delete quite a few of them without really looking at them.

In such cases, the retailer has actually invested in acquiring a customer they already had... but that is a risk they need to take, I guess. And it is better than physical coupons because if it was a DM piece I had received but failed to bring with me, thus disqualifying me for the discount, it would have left a bitter taste in my mouth. Never mind that it was MY fault for not bringing the DM piece with me to qualify for the discount - as unreasonable as consumers usually are, I would have blamed the retailer for not being flexible enough or not valuing me as a customer enough. Because it was an eDM or eVoucher, I could retrieve it on the fly and feel satisfied.

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