Traditional businesses and e-businesses have many things in common such as wanting to be profitable, reaching out to customers and offering a product or service to satisfy a need. However, these two types of businesses also have some differences such as their presence in the marketplace (brick & mortar versus Internet) and the way they communicate with their customers (face-to-face versus virtual). Consumer behavior will differ as well, and this is analyzed in the paragraphs below.
Consumer Behavior Principles in E-Business
Online businesses have been constantly challenged in making their websites successful as a marketing and sales channel. For several years, consumers and businesses alike welcomed the idea of this new type of vehicle for purchasing, but it was risky in that both sides were speculating on what would work the best.
On the business side, websites must be designed so they have a professional appearance, are informative and easy to navigate, and are low-maintenance for the business to manage. Consumers share the same expectations plus a few more. Typical online consumers want an interactive website that will update order information quickly, be a good informational resource for product learning, and they expect a secure method of payment. If these expectations are met, the customer will feel positive about the buying experience, and most likely, will return for future purchases.
Consumers buying in an online mode expect that there will be no face-to-face interaction and they may not be able to have questions answered quickly. It is for these reasons that the web site must be designed well to offset some of the inconveniences of not being able to communicate with a person.
Consumer Behavior Principles in Traditional Business
Consumer behavior in retail (brick and mortar) is different from e-business in many ways. Customers expect that they can walk in to a store, see and touch the merchandise, and can purchase it instantly for their use. Communication takes place between people instead of web sites, and customers may bring in coupons or ads to take advantage of a special sale price or discount. There are interactions with other shoppers as well, and for many customers, this becomes a social event.
Many consumers enjoy the experience of shopping in person. Malls are filled with people of all ages, either shopping alone or in groups. This is traditional shopping and it is also recognized as an American past time. Consumer behavior is affected in this type of atmosphere as it revolves around instant gratification, comparison shopping and even impulse shopping.
Consumers who shop in person are constantly surrounded by obvious and subliminal messages that can affect a buyer’s behavior, especially in a mall. In this environment a shopper is stimulated by visual images, sounds and even smells, and this can trigger a buying impulse. For those who shop in groups, such as families, relationships between members can affect buying decisions and behaviors (Perrault, 1999).
Consumer Trends in E-Business
Some businesses today are strictly online. For example, Amazon.com is a well-known supplier of many items such as books, music, CD’s, electronics, and they have even branched out into house wares and tools. For those that prefer online shopping, Amazon has created a strong model for the ultimate warehouse. The purchasing and distribution systems work well, and for many electronic items, there is a 30-day money-back guarantee. Online consumers enjoy the convenience of shopping with businesses that target especially to them. The typical online consumer wants to save time, and usually wants to pay the same online as in a store front business. But, sometimes online consumers are willing to pay extra for the convenience of having items delivered, and they offset the cost of having to shop in person.
Many websites began their early days wanting information about the customer’s background, buying habits, needs and wants, etc. This made it cumbersome for the customer, as they felt their privacy was being intruded upon in an online environment. Websites learned quickly that just by following the “clicks” as a customer moved around the site, they could tell what interests the customer had, without making them fill out a survey (Reim, 2002). This is an interesting trend for consumers because the e-business is learning what the consumer desires, and in turn, the consumer can benefit from an e-business tailoring its message directly to the customer.
Consumer trends are changing as online shopping evolves. One particular study (Hopper, 2002) suggests that the fastest growing segment of online shoppers are blue-collar workers, and this shopping segment has grown 52 percent since Spring of 2001. Higher rates of senior citizens are growing as well. These two groups in particular indicate that web-based companies need to focus on these market segments, as they may have continuing buying power in the years to come.
Consumer Trends in Traditional Business
Many traditional businesses have changed with the times and have taken advantage of adding a website to their existing store. For example, Home Depot sells just about everything a person would need to tackle a home improvement project or even build a house. The business is a traditional store using a warehouse format, where customers can walk in, browse the selections, and leave with their purchases.
Home Depot has also added a website to reach out to online customers, and consumers can purchase goods through this channel as well. Purchased items can be delivered to the customer’s home as an added convenience. Many traditional businesses have chosen to add this type of purchasing to reach additional customers and increase sales. Even if a business chooses not to have an ordering system available through the Internet, most customers will expect at least a home page type of presence that explains what the business is and where it is located.
The Home Depot example shows that traditional business has broadened its horizons in accepting new ways to serve customers. By doing so, they have changed their own customer trends as new expectations and attitudes become more sophisticated. Consumers can still enjoy “old fashioned” customer attention, but they can also take advantage of what web-based technology has to offer as well. Traditional business can be more well-rounded in offering both online and traditional purchasing to reach a variety of customers.
At one time the traditional store front shopping was just about the only option for consumers. When e-business was born, consumers had new options and new ways of thinking to consider. As shopping options evolved over time, both brick and mortar businesses and web-based businesses were challenged as to the best way to get the customer involved. For a few years, the two ideas competed against each other, but now that some time has past, business has realized that both worlds can co-exist. By having both options available, business can study consumer behavior more than ever before.
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