Consumer Behavior: Building Marketing Strategy 13th Edition by Delbert Hawkins, David Mothersbaugh

Exercise 47

Multi-Channel Shopping
IKEA, the giant Swedish retailer of all things for your home, has giant brick-and-mortar showroom stores well known for their meandering pathways that encourage wanderings throughout the store-the better for consumers to see and buy things. IKEA also has an easy-to-navigate website from which consumers can order goods. Plus it mails a catalog to consumers' homes. Even with this "triple threat" IKEA still has not solved the consumer's problem of determining how things such as sofas, chairs, and tables will look in their homes-that is, until IKEA introduced its augmented reality app. This is how it works. A consumer flipping through the IKEA catalog sees something she likes-say a sofa. She scans the page with her smartphone or tablet. Then she places the catalog where she would likely place the sofa-say against the wall and in front of the window. Using her smart device, she can see how the sofa would look in her home. The virtual reality app, available for 100 of the 300 products in the IKEA catalog, is likely to be helpful to the 14 percent of IKEA customers who buy the wrong size furniture and the 70 percent of IKEA customers who don't know the size of their home. 34
Retailers who started out as pure play web stores have discovered the value and benefits of adding brick-and-mortar stores. Warby Parker, the purveyor of stylish, boutique eyewear, is a case in point. Introduced in 2010, it successfully disrupted the eyewear industry with the implementation of its e-commerce model, selling eyewear directly to consumers. It was able to offer prices below industry standards by vertically integrating the design and manufacturing of eyewear, thereby eliminating the practice of paying (exorbitant) brand licensing fees. Taking a page out of Apple's retail store, its newly opened Soho New York brick-and-mortar store is designed with the focus on the consumer experience. The 20-foot-wide store has the feel of an old library-terrazzo floor, brass library lamps, rolling ladders, (meticulously selected) musty books (that consumers can buy). Rather than locked behind glass cases, eyewear is out in the open for consumers to try. Consumers can view themselves in one of the mirrors that surround the store or take a photo of themselves in a custom photobooth-an experience more novel than a selfie taken with a cell phone. To complete the offering, an in-house optometrist is available seven days a week to provide $50 eye exams booked online.
E-tailers can use their webstore data-customer characteristics and location, sales volume-to guide decisions for their physical store-store location, store size, merchandise. For example, analysis of its web shopper guided webstore Bonobos, the purveyor of upscale men's clothing, to open its physical stores, Guideshop, to solve the problem of customers' desire to try on clothes before they buy them online. Customers make appointments (usually lasting 45 minutes) to visit a Guideshop store for fittings. Guideshops are smaller stores (700 square feet) that carry sufficient inventory-khaki chinos in all 11 waist sizes and 4 inseam lengths-for store personnel to fit and size customers. Customers can then purchase clothing from the Bonobos website during their visit or at a later time of their choosing.
Analysis of webstore data may suggest that rather than a flagship store, the e-tailer is better served with a less expensive pop-up store in a high foot traffic area for a short amount of time (a few days to several months). This is an option that Etsey, seller of handmade products, and even eBay, the online auction house, have used. Like an old-fashioned craft fair, Etsy's pop-up stores provided a physical space for its sellers to showcase their handmade products. Sellers used laptops to show their inventory and used smart devices to transact sales using Paypal and Square. E-bay's first physical store, its Christmas emporium in London, was housed in a container box. Opened for four days of holiday shopping, it attracted 2,500 customers. The store's virtual inventory consisted of 350 top-rated products projected onto walls, each accompanied by social media recommendations and bearing a QR (quick response) code that consumers could scan with mobile devices to pay eBay. By establishing an offline presence, these online retailers are doubling down benefits from the interaction of their physical and web markets. Physical stores showcase selected merchandise that consumers can touch and feel while relying on their e-stores' virtual merchandise for their backroom inventory. The physical store can attract new customers while simultaneously creating buzz for its web market customers.
What products are currently marketed web-only that in your opinion should remain web-only versus those that should consider establishing a (permanent, pop-up) physical store