Marketing Essentials Lab

CUSTOMER EMOTIONS IN ONLINE RETAIL

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The primary objective of this research was to investigate website design imperatives that were vital from a customer perspective. Customer journeys were constructed at the core of this investigation. Customer journey mapping itself is a linear, time-based, depiction of the main stages that a customer goes through while interacting with the retailer

What we did

Participants were required to select their current emotion from a table of emotions. Thereafter they were provided with a task list to complete on one of two websites. The participants' interactions with the website along with a video of their face were also recorded during the experiment using web usability software. They could check out one piece of their choice at the end of the experiment. Further, the participant was required to describe their emotions at each stage of the journey by selecting from a set of emotions. The set of emotions employed in the study were taken from Steenkamp and Laros (2003) hierarchy of consumer emotions.

What we Found

Through an analysis of customer emotions at the five stages of the customer journey (site entering, browsing products, assessing products, managing cart and checkout) specific trends emerged related to consumer emotions. All participants exhibited positive emotions during the first three stages of their online customer journey, i.e., website entering, browsing products and assessing products. However, during the final stages of their online customer journey, i.e., managing cart and checkout, many of the participants exhibited negative emotions such as worry, helplessness and frustration. Positive emotions were consistent in the first two stages. The main website features that contributed to positive emotions were features such as the ability to filter products by size and view by price based on personal requirements. These findings are explicitly outlined in the thesis. Additionally, product variety also contributed to happiness and positive emotions. There were other features such as the trends sections (sections on the website showing products in use) which further captivated the participants, leading to positive emotions. Some participants during the stage of assessing products did exhibit negative emotions of worry and helplessness. The cause of negative emotions was primarily due to the lack of enough product images and product information. Besides some items, the participants wanted were out of stock resulting in negative emotions.

Respondents did not purchase an item if there wasn't enough product information and images. Literature conceptualised this concept as perceived product risk. Product information and presentation helps eliminate the uncertainty associated with online shopping. Finally, as participants progressed in their online shopping journey towards the checkout stage, more participants exhibited negative emotions of helplessness and worry. The participants that displayed negative emotions indicated they were concerned about the delivery time, not receiving similar items and about making the right purchase choice. Additionally, at checkout, respondents indicated that retailers asked them to provide information they did not require making them worried. On average, a participant spent 5.21 minutes checking out their items, going through several pages of forms and completing twenty-four fields of information before their order was completed. The volume of information and time associated with checkout resulted in negative emotions.

Online consumers seek connivence and often want economise on time. The level of complication associated with the checkout process determines whether the customer will complete their order. The number of forms required, the amount of personal and financial information required factor in completing an order.

Clothing Rental:The Commercial, Economic and Environmental Solution 

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enviornmental impact

A monstrous 235 million items of unwanted clothing were dumped in UK Landfill 2017 (World Economic Forum, 2018). Overconsumption in the economy is posing a serious issue from both a commercial and environmental perspective.


Overconsumption

Moreover, as consumers reach their saturation point of consumption they are increasingly becoming more aware of their purchase patterns. In general, the economy has seen a slow down in consumption.


Wear and Return

Further many retailers are also seeing an increase in consumers wearing items and returning them. This problem of wear and return poses serious supply chain issues for retailers.

 

Given the commercial, environmental and economic challenges associated with online retail does clothing rental offer a method to disrupt clothing retail and create a more sustainable business model for retailers. As Urban Outfitters sets to disrupt the affordable clothing sector by renting clothes to its customers. Urban outfitters is launching Nuuly, the clothing rental subscription service, Customers will be able to rent six items of clothing per month at $88.

Retailers looking to adopt a similar approach to tackle the freeriding associated with online shopping should consider the following.

THE SUBSCRIPTION ECONOMY

According to Royal Mail, the subscription box market is forecast to grow to £1 billion by 2022. In 2017, the subscription box market was valued at an estimate £583 billion. 6/10 business in the UK are looking to diversify their offering to offer subscription services (Retail Times). Currently, 24% consumers are signed up to a subscription service, with popular subscriptions including beauty and grooming products.

  • Clothing Rental is set to be worth $1,856 Million globally by 2023 (Allied Market Research)

  • Global Online Clothing Rental Market to Surpass US$ 3,299.6 Million by 2026 (CAGR)

 

The operational And commercial issues of diversifying into clothing rentaL

While there is already an established practice of offering clothing rental among high end brands, achieving economies is likely to be more difficult for affordable brands.

Lifetime Customer Value

When offering clothing rental to consumers, lifetime customer value is crucial; given the likely churn rate of consumers who try for 1-3 months and abandon the service. Retailers could consider reducing this with the implementation of time-based pricing. Variable pricing based on monthly rolling contract or opt-in for a month. You could offer variable pricing based on the duration of subscription with your customer i.e. varied prices for customers who are on rolling monthly contracts vs yearly.

One way to differentiate the annual price offering is to take the VIP approach, offering incentives such as sale previews, holiday month and a host of customer benefits for subscribing to an annual rental membership.


Pricing Strategy

When pricing the rental subscription, an array of factors will come into play. Operationally, renting is set to be more costly than a simple purchase transaction

Many retailers choose to charge 33% of the actual purchase value of goods to the consumer.


Circular Economy

Another factor to consider is the product lifecycle i.e. when do you retire an item of clothing and what happens to it after it leaves the rental chain. Retailers may choose to partner with charities and global foundations to ensure the clothes don't end up in landfill.


Collateral

With a subscription service, you are likely to be giving away clothing worth a significant amount for value for a fraction of the cost. One thing to choose as a retailer is to determine whether you charge a security deposit or like in the case of Amazon, notify the consumer there will be a charge if goods are not returned within a certain time frame


Operations

Operationally, the rental will cause an array of process related and cost-related issues. Retailers will need to consider

1. Delivery and Returns Handlers: From an operations point of view, delivery and returns of rental items are likely to happen on the same occasion. Therefore creating the need to choose shipping handlers who offer this service; but also have a great delivery service and price.

2. DryCleaning: Rental would mean clothing would be returned, and need to be dry cleaned and sent out again.

3. Stock Management: Stock would need to be divided into rental and shop stock.

4. Quality Control: Quality control will prove challenging for retailers, as service quality will be at the forefront.


Customer Experience

For any retailer looking to venture into the rental, the customer experience should be considered of the utmost importance. If the offering and process are complicated from a customer perspective, uptake is likely to be lower.

From a customer perspective

a. The process of rental should be seamless and explained simply.

b. The delivery and returns process should be considered.

c. New Customer Acquisition should be carefully thought out, initial uptake of the process would need careful evaluation.

d. Clarity on process, important dates,

e. Clarity on what lines will be available for rental

 

A GUIDE TO perceived RISK IN ONLINE RETAIL

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Flow: Insight into Compelling Online Experiences in Retail

Flow offers a unique approach to customer experience. It is a cognitive state colloquially known as being in the zone. One can achieve flow during a variety of tasks including while working, studying, playing a sport or admittedly during gaming. Flow online is often described as a state in which the individual is acutely engaged in the virtual environment.

Flow is intrinsically enjoyable and completely involves a person.

Flow in Online Retail

Flow in Retail Environments 

Customer experience is particularly complex in online retail environments due to the constraints of the virtual environment. Online customer experience is additionally more complicated due to the inability to physically examine or try on products. There is also the issue surrounding associated perceived risk which affects online retailers. Flow offers an approach to not only address customer experience but also gain a competitive advantage. 

The state of flow is known to have a positive influence on a customer’s intention to make an online purchase (Ding et al. 2010) and have a positive impact on attitude towards a retailer (Florshiem and Bridges 2007). Customers who achieve flow online are also more likely to return to websites and exhibit loyal behaviours (Ding et al. 2010). Flow has been shown to lead to desired customer outcomes, such as purchase intent, loyalty and satisfaction (Ding et al. 2010), affirming flow’s strategic importance in the context of online retail.

The Influence of Website Design on Flow State

Based on a sample of 3000+; several website design characteristics can positively influence the flow state in online retail environments. Product Presentation and Interactivity on a website can significantly affect the customer's flow state online. Additionally, product information, searchability, recommendations and availability are known to impact flow. Less critical but still important features from a flow perspective include customer support channels and type of support available. 

Characteristics of Flow

Csikzentmihalyi (1990) introduced the concept of optimum experience, known as flow, in the field of psychology, describing it as a state of effortless concentration. Flow occurs when a customer is genuinely enjoying their interaction with the website.Flow is an outcome when a task is challenging enough to balance the skill, the challenge is enough, so the individual isn’t bored but not so high that the person feels anxious (Csikszentmihalyi, 1977).

Characterstics of flow
 

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DRIVING ENGAGEMENT ON INSTAGRAM

THERE ARE 1 BILLION ACTIVE INSTAGRAM USERS.

- According to Forrester, 60% of Instagram users discover new products on the platform.

- Engagement with brands on Instagram is 10 times higher than Facebook, 54 times higher than Pinterest, and 84 times higher than Twitter.

- Users spend 53 minutes a day on Instagram

- 80% of accounts follow a business on Instagram