Offline Retail Vs. Online Retail

Although online shopping has seemingly taken the world by storm, offline shopping is still very significant. In fact, the California Institute of Technology (Caltech) recently conducted a study that showed some slightly surprising information regarding consumer behavior offline.

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As brought out in the above video, Caltech researched consumers to see (1) what they considered to be valuable in products and (2) how these points of value were presented to them. Specifically, the study looked at how consumers responded to product descriptions, images, and physical appearance. Caltech then compared this behavior and also examined how much consumers were willing to pay for the products, based on each of the variations.

Interestingly, the study found that consumer behavior did not differ when consumers saw a description of a product as opposed to when they saw an image. However, consumers did react differently when they could see and touch the product. Caltech actually found that consumers were willing to pay an average of 50 percent more for items they could touch and see.

Ultimately, the report said consumers responded better to products that were "physically present." Do these results come as a surprise to you?

It’s obvious that consumers respond differently to certain types of products online and offline. For instance, most consumers wouldn’t purchase a car online. On the other hand, online shopping provides many perks that offline shopping doesn’t provide such as convenience, price, and unlimited access.

In the end, Caltech’s study can be applied to both online and offline retailers. Both need to realize that product presentation plays a powerful role in consumer behavior.

Offline businesses clearly have the advantage since they have physical products. However, there is a way in which online businesses can apply a physical element to their products. Consumers have to trust a brand before they will take its word about a product or service, but they already trust their peers. Online businesses should act on this knowledge and encourage online reviews and testimonials, since these components give consumers a more personal and physical understanding of the product or service.

As a consumer, does this study reflect your behavior? For all of you retailers, does this study match your trends? Why or why not?