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Will retail bounce back as the most preferred mode of shopping?

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Consumers are now beginning to feel the brunt of ‘online fatigue’. The endless scroll and blue-screen exposure from running business meetings to shopping online are taking a real toll

By Richa Bhagwat, Behavioural Analyst, Terragni Consulting

Indian consumers have forever relied on their corner shops and neighbourhood stores to provide for most of their needs. These shopkeepers have deep insights into their shoppers, know them, know what they want and what’s more – they even make it available if it isn’t available immediately.

The sudden onslaught of a global pandemic made India as the third-largest online shopper base in the world. So, is this the beginning of the end for physical retail? Hold that epitaph, all is not lost yet. There are some interesting behavioral reasons why physical retail may never go out of fashion and demand.

Consumers are now beginning to feel the brunt of ‘online fatigue’. The endless scroll and blue-screen exposure from running business meetings to shopping online are taking a real toll. Consumers now look forward to getting out there, into the physical world. This includes shopping.

Opportunities: Revenge Shopping

Covid lockdowns meant there was very little opportunity to spend. This has resulted in the twin effects of pent-up demand and spare cash. The result? ‘Revenge shopping’, as was seen in the festive season that went by.

The mode of shopping a customer decides to favor, is the function of how easy it is to choose and fulfill that choice. As a species, we loathe anything that requires additional effort. Our brains are wired that way; we decode any additional effort as pain. Why should the effort in shopping be any different? Any barrier that keeps us from achieving our desired outcomes is unwelcome.

The decision to go online or go physical shopping boils down to the context of the
consumer. What is the consumer looking to buy? What will make her purchase experience effortless? What will make her choices and decisions easy? How much assistance and assurance are available? The answers to these questions should be on the mind of retail brands.

Choice Architecture, Overload and Assisted Shopping

As discussed, lazy as we are, we get fazed when called upon to select from a large choice set. We prefer assistance in these decisions. Physical shop assistants’ step in and plays this vital role. In the online world, the question to ponder is whether
overwhelming overexposure to a plethora of options is helping the customers or working against them. The less satisfied consumers are with their choice, the higher the chances they may forego deciding altogether.

In such a context, consumers find it easier and quicker to pop into a store and pick up what they need, especially if the store is a known ecosystem. For most, they know what to expect in a store. Isles of neatly stacked racks with an infinite number of options. The process of selection is easier in a store. Additionally, consumers tend to not walk away empty-handed, having taken the effort to come to a store. Unlike online carts that get abandoned at the switch of an app.

Retailers should make sure that the journey of finding the right product also ends on a high. With online payments becoming quicker by the minute, waiting in long queues and limited payment options may put a damper on the joy of buying something in a physical environment.

Then there are those purchases that require a certain level of involvement from the customer. Online just does not cut it. Consumers will find their way into retail stores for such purchases.

What a consumer decides to buy is the culmination of a series of micro decisions. In a physical environment, these micro-decisions can be altered, nudged, or impacted along the way. There is room for you to change your mind in the here and now. In a physical environment, this is achieved by the shop staff.

A possible quirk of the Indian customer is to shop collaboratively. Whether it be a new washing machine or a bridal ensemble, the opinions of friends and family always
contribute to our decision-making. While four people can hunch over a phone screen, an in-store experience is unparalleled for such excursions.

Only second to the opinion of friends and family, or what is known in Behaviour Science as ‘Social proof’, is the contribution of a store assistant. A great store assistant knows just what would light up the consumer. Which features, which price points, and which options? Even though plenty of online storefronts try their hand at Artificial Intelligence (AI); a person in the flesh, and with years of expertise proves to be far more reliable and trustworthy.

Challenges: E-commerce Apps

Post-Covid, however, consumers report that it takes them a long time to find knowledgeable store assistants. The availability, presence, and knowledge of these assistants are turning out to be key differentiators of retail stores.

A majority of e-commerce platforms take returns ‘no questions asked’, pick up the product, and refund customers in a matter of hours. Contrast this with the high amount of effort when it comes to making returns at a store. This could be due to the physical eȮ ort or due to the difficult, often embarrassing, or intimidating interactions with the
employees at the store.

This is an area of concern for physical retail. E-commerce apps and platforms have gone all out to mimic a physical experience. But now with the pandemic in the rearview, it is time to examine whether customers switch to e-commerce for the shiny
10-minute delivery or out of simple convenience.

As people interested in the behavior of customers, we also looked at this question. Our recent, forthcoming study on the amount of friction that Indian customers experience with some of the biggest brands across India, tells us that there is still a certain warm
glow each of us gets from physical retail stores.

Never underestimate the empathy of the store assistant, the instant gratification from a purchase, and the dopamine rush from shiny products under bright lights. Not all of these can be successfully replicated on a screen.

 

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