How online shop increases profit on shelves by focusing customers engagement?
No one can deny that internet and smartphone have changed our behavior. It can help to make our lives easier such as buying through online channel instead of going to physical store. Although the online shop gives benefit to customers, there is some drawback. So, the physical store still needs to solve the online problem.
The increase can be seen in online retail sales worldwide from 5.9% to 8.2% between 2014 and 2017 (Invespcro, 2017). However, many businesses are interested to change their role within the online platform to build their businesses up to date and to be more engaged with customers. Do you agree with this?
The trend of opening an online store could be rising, however, there are still some businesses who are willing to take the reverse trend by investing in physical stores instead. The business believes that customers familiar with online channel can motivate themselves to engage with offline store. According to Weng and Zhang (2015) stated that the integration of marketing activities on online channel developed with offline model can bring business achieve the highest profits. This operation is called O2O business that brings online shop to offline stores.
The example of O2O business is Matchbox store in Thailand. Matchbox store has become very popular due to the influence created by social media. This shop sells multi-brand of fashion items over 100 brands, which the shop selects popular Thai’s Instagram accounts with high followers as their influencers and marketing tool to build up brand recognition to their followers. For example, clothes, shoes, jewelries Instagram. All products’ concept is trendy for everyday’s look. There are two branches and will be opening the third branch on the 1st of December 2017.
Do the on shelves solve online purchasing problems?
Yes, it is. As the basic advantages of physical stores. For instance, clothes or shoes do not fit their body or the quality of goods is lower than expected because the image that posted in online are over modification. So, it is better for customers who want to try it on before purchasing.
Another aspect of Thai shops is the purchasing process from online channel may not be the most convenient for exchange or refund because many brands from Thai’s Instagram are not large as big store and the management system is not the same. Some of them may not have many employees so owners (or e-tailers) manage every process of their brands. Hence, e-tailers prefer to clear their stocks and receive money more than getting the products back.
Furthermore, price and products are the significant factors that customers will make the decision whether to buy or not. In this case, most of the products price in Matchbox store is reachable and some of the products are quite high which cost nearly the same with global brands such as Zara or H&M. Because the owner of each brand use make to order system (MTO) and their ability to produce in economies of scale are too far. Thus, the quality from Thai retailers is neat and high quality compared with mass production.
How Matchbox engage with customers?
From the framework, the customer engagement marketing is the first key to connect with customers. The link between online channel and offline channel can be seen by the Matchbox and individual Instagram shop online promotion announcement such as a discount when customers purchase in store. This means that Matchbox has already engaged with social channels, which creates customers empowerment in shopping in the store.
Regarding customer engagement and customer-owned resources, both can be perceived when the business was promoted by customer review. For instance, when customers come to Matchbox, most of them have already selected the product in their mind from online store but they only want to see the real product or they might have a discount card from online store which they can only use in-store. This can attract customer to come to the shop and try the clothes, which they had expected to buy. Nevertheless, there is also a possibility that the customer will change their mind to another brand because of the availability, size or even design. This can create the shopping experiences for customers because Matchbox has lots of brands and choices. Moreover, this store has café on the top of the store which makes the store pretty unique from another clothes store. This café is also popular in social media which might be another key to bring customers to come and joy with lovely café.
The customers as a brand communicator to advertise for Matchbox when they post photos, review or word of mouth about the experience that they perceive from stores. They discuss through both online and offline channel. An interaction between offline store and customers can create a relationship between them.
What the result of having the physical store?
From all of the marketing engagement processes involve both online channels and offline store. The profit of physical store which created by the influence of social media can show as an increase purchasing rate and create meaningful interactions between store and customers. It is supported by Positioningmag.com (2017) that the sale of Multi-brand store increased by 30% than purchasing through the online shops. Additionally, customers have an opportunity to enhance their shopping experiences when they come to the store.
If the business wants higher profits in-store, they should carefully think what the way store engaging with their customer like Matchbox!
- Facebook.com. (2017). Matchbox Multi-Brand Store. [online] Available at: https://www.facebook.com/matchbox.official/ [Accessed 6 Oct. 2017].
- Harmeling, C., Moffett, J., Arnold, M. and Carlson, B. (2016). Toward a theory of customer engagement marketing. Journal of the Academy of Marketing Science, 45, pp.312-335.
- Instagram.com. (2017). matchbox.official. [online] Available at: https://www.instagram.com/matchbox.official/ [Accessed 6 Oct. 2017].
- Invespcro. (2017). Global Online Retail Spending – Statistics and Trends [Infographic]. [online] Available at: https://www.invespcro.com/blog/global-online-retail-spending-statistics-and-trends/ [Accessed 5 Oct. 2017].
- Lacy, L. (2017). How Much Do Instagram Ads Cost? Plus 8 Tips for Saving Money | WordStream. [online] Wordstream.com. Available at: http://www.wordstream.com/blog/ws/2017/06/05/instagram-ads-cost [Accessed 7 Oct. 2017].
- Positioningmag.com. (2017). Multi-Brand Stores รับเทรนด์อีคอมเมิร์ซยุคใหม่ ยกร้าน Online สู่ On Shelves. [online] Available at: https://positioningmag.com/1126664 [Accessed 8 Oct. 2017].
- Weng, X. and Zhang, L. (2015). Analysis of O2O Model’s Development Problems and Trend. iBusiness, 07(01), pp.51-57.