$1.04 billion. That’s what Americans spent online on Black Friday, 2012.
We like to shop. And, we like to shop on our phones, tablets, laptops and other devices. Retailers are adjusting to shoppers’ new preferences in interesting ways, says Bruno Professor of Marketing Kristy Reynolds, Ph.D. Since that number reflects a 26 percent increase over the $816 million in sales on the same day in 2011, competitive retailers are quickly adjusting their expensive square footages while sharpening online services.
Here’s what Reynolds says consumers might expect as stores adjust to more virtual cha-ching:
- Price changes. “Retailers are adopting very sophisticated analytics to monitor competitor pricing,” says Reynolds. “They know if they are competitive, and whether they need to raise or lower the price.” That means if Amazon offers a short-term discount in their “lightning deal,” other online stores know immediately, and may adjust accordingly.
- The showrooming effect. More consumers are visiting big box stores to see product and ask questions, then return home to buy online. That’s why Best Buy is closing some locations. Any new Best Buys will be smaller, geared toward tablets, cell phones and service, says Reynolds. Similar stores may follow that trend.
- Pick up places. Some customers prefer to claim their online orders in the store, saving shipping charges. For this year’s Black Friday customers, online purchase/in-person pick up allowed them to reserve “limited quantity” items. The customer’s upside? No more parking lot sleeping bags. The store’s upside? You might buy something else while picking up.
- The experience. Williams Sonoma offers cooking classes. The Apple Store offers hands-on gadgetry. Other retailers provide whatever stage show-like aura their demographic seeks. “There is still a huge segment of shoppers who like to touch, feel, and have the experience,” Reynolds says. Expect more emphasis on in-person experiences unavailable online.
- Free shipping, both ways. When shipping costs are eliminated, buyers are more likely to order shoes and clothing. If there’s a local storefront, the shopper may be able to return items there – and be tempted to buy more. And let’s be realistic: some of those order returns never happen; shoe boxes lie forgotten in the basement. That yields a sale that likely wouldn’t have happened in-store, where customers are more likely to try shoes on before buying them.
- Exclusives. “Brookstone estimates that 75 percent of their inventory is exclusive. Target and Best Buy are trying to do this, too,” says Reynolds of another way savvy retailers are differentiating themselves. Whether it’s a neck massager made specifically for Brookstone or a celebrity perfume marketed only through Macy’s, some retailers are offering products that can’t be discounted by online competitors.
- Renovations. Shopping mall obituaries are premature, says Reynolds. “I don’t think enclosed malls are going to die. The strong ones -- with tenants that create an experience or offer a compelling reason to visit -- will survive.” Expect older facilities to be renovated for new uses, says Reynolds. Gyms and Costco warehouse stores are moving into some emptied malls across the country.
Our online purchases are changing the way we live, in more ways than sellers or buyers might have anticipated.
Coming soon: more Culverhouse experts’ observations on how our virtual habits are changing our real-time realities.