As retailers struggle to compete with the Internet, how is it that this relatively recent technology upstart has had such a dramatic impact on the retail landscape? More importantly, perhaps, how can understanding its appeal help retailers focus their efforts on innovations that are likely to be successful?
I’m old enough to remember the days before Internet retailers existed, and the critics who said it was risky and they would never use it for shopping. We’ve come a long way in the last decade or two.
Both the initial scepticism of consumers and its subsequent success make perfect sense from the perspective of consumer psychology. Change is scary. Evolution has shaped us to be significantly more concerned about the potential negative consequences of any particular action than to be motivated by its opportunities for gain. If this seems implausible consider all the things people keep in their homes in case they might need them one day: extra space or money raised from the sale of items they haven’t used in years pale against the anxiety that, were they to get rid of them, they might regret it.
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So it was understandable that people focused initially on the risks of online shopping. That concern about typing their credit card details into a computer was irrational, given their willingness to say them over a phone. This was, as is usually the case, their unconscious mind sending them a general sense of unease.
But just as necessity is the mother of invention, so desire can often trump fear of risk. In fact, quite literally in the case of men, studies suggest you can switch off their loss aversion by making them think about an attractive woman. In the case of the Internet, it was often the desire for a bargain that tipped people over the edge. Amazon’s heavy discounting and eBay’s online auctions provided enough of a trade-off to trigger a cultural shift.
Though initial reluctance subsided, traditional retailers should not have been confident that the theatre of the store, the opportunity to see and touch products, and the benefits of their expert service would ensure their Internet rivals would remain peripheral irritations.
Although the Internet is new, our desire for ‘easy’ is as old as we are. Through the long evolutionary period when life was considerably harder than it is for us in developed societies today, efficient use of energy was of understandable importance. Today, we still exhibit a desire to expend as little effort as possible in our consumer actions, and willingness to trade-off all manner of benefits for the opportunity not to have to think or do more than absolutely necessary.
Brands are, in themselves, a great example of the preference not to think. Faced with a choice between two sets of products, it is the one that doesn’t include our favoured brand that causes our brains to light up with activity. We must burn valuable glucose — a sugar that the brain uses more than any other organ — deciding what to choose.
It is then little surprise that a retail medium that enables us to sit at our desk, click a button and have the product arrive within a day or so is implicitly appealing. It says much that people are willing to forgo the trend towards instant gratification to obtain what they want easily online.
Arguably, the biggest trend in the brief history of online retailing is towards ease and a reflection of our preference for it: one click purchasing; the dominance of a small number of retailers in key categories; simplified and secure payment processes; even the emergence of daily deal sites like Groupon can be attributed to the fact that they make shopping easy by putting a low-risk (discounted) deal in your inbox and remove the complexity of choice.
The challenge for online retailers will, I believe, continue to be how to make buying from them as non-taxing as possible. The more easily a consumer can get an acceptable and guaranteed degree of psychological reward from a purchase, the happier he will be.
For retailers looking to compete in the bricks and mortar world, they must recognize what they are up against. With our evolutionary ‘preference’ for ease, any visit to a store must hold the promise of delivering something extremely compelling if our unconscious mind is to send a signal that suggests a trip is worthwhile. And, of course, anything you can do to make the experience as easy as possible is also likely to reap dividends.
It’s my belief that, even in those categories that have been relatively slow to move online, success is likely to come from creating a blend of real and virtual retail. A ‘real’ retail space provides unsurpassed opportunities to build the right contextual associations for your product; every sense can be targeted. Except when shopping in-store is inherently convenient, as is currently the case with supermarkets, it is incredibly difficult to create the kind of rewarding experience that keeps consumers coming back. The ease that Internet shopping offers has more than offset the preconceived notions consumers once held about virtual shopping.
