I, like many people, think carefully about shopping for clothes online. Between the constantly changing trends, inconsistent women’s sizing across brands, and lack of diversity in models, it’s very difficult to gauge how something will fit based on the information available online. If it’s hard to predict how an item will look or fit, I somewhat begrudgingly spend the time, energy, and gas money to see that item in the store. But when I wanted to buy new hiking socks, I didn’t even bother looking at stores. I was confident enough in my ability to assess the quality and fit of socks based on the information provided online.
It turns out I’m not the only one who shops this way.
In “Multichannel customer purchase behavior and long tail effects in the fashion goods market,” Assistant Professor of Marketing Gonca Soysal, Brian Ratchford, and Alejandro Zentner explore how customers make decisions about what items they seek out in person versus which items they prefer to buy online. With the growth of E-commerce, retailers must decide which products to focus on in both online and offline environments.
Long Tails Are In: How E-Commerce Affects the Distribution of Sales
Long tail theory suggests that the growth of E-commerce will shift the conventional distribution of
sales from being concentrated on select popular products to being distributed across
fewer quantities of more niche products.
In other words, retailers have focused on carrying and marketing a few “hit” products which also accounted for the majority of their sales, but E-commerce is changing this. The rise of online shopping has allowed users to find more niche products that cater to their specific needs, and this ready availability of niche products might shift the concentration of overall sales. When I wanted a pink LED sign for my bathroom, I went straight to browsing online storefronts. The sign was so unique to what I wanted that it would be largely unprofitable for retailers to carry it in-store because so few people were seeking the same item.
Previous research has explored various drivers and side drivers for long tail effects, including the ability of online retailers to cater to niche products by carrying a larger selection of products, the difference of customer preference in online shopping, and lower search costs for online shopping compounded with recommendation engines that might make it easier to find niche products.
Usually, long tail effects are defined as when the concentration of overall sales decreases as the share of online purchases increases compared to offline purchases. Soysal and co-authors, however, argue that this definition overlooks some potential customer behaviors, such as the possibility that customers may be buying different products—not a greater variety of products—online than they do in person. Such behavior would also lead to a decrease in the concentration of overall sales even when consumers purchase similar variety online and offline. Their research is interested not only in what kind of change occurs in sales distribution but why this change occurs.
Previous research has implied that retailers should carry a larger selection of items online and gear their marketing strategies toward niche products. Soysal’s research, however, suggests that retailers don’t necessarily need to carry more online selections but that they might benefit from emphasizing different products online and offline.
Which Products Take the Stage Online and Offline
The researchers observe that previous long tail literature has focused primarily on
goods with characteristics easily conveyed online which fails to account for the multitude
of attributes a product may have and how customers perceive those attributes. After
all, the odds that I feel I’ll need more information than the internet provides about
a book or a video are slim. But there are many products that have qualities that are
difficult to communicate over the internet such as fit or feel. These are called sensory attributes. Try to describe anything in the fashion world and you’ll find yourself reaching
for the most sensory words in your vocabulary, and, somehow, they will still seem
to fall short.
Soysal’s research focuses specifically on multichannel fashion retailers—retailers who sell fashion goods both online and offline—thus contributing ample new data to long tail literature. The researchers note that clothing and accessories sales through specialty online and department stores accounted for 9.8% of total retail sales in the US, making it an extremely relevant market. The fashion goods market makes an excellent atmosphere to explore long tail effects because while most products are high fashion items with short lifecycles, there are also a fair amount of basic wardrobe staples with longer lifecycles. Additionally, fashion goods retailers tend to have similar selections of items both online and offline.
The researchers found that products with sensory attributes, like trendy tops and bottoms, are more likely to be bestsellers offline. Fashion retailers frequently turnover their inventories to make up for high production costs, remain competitive, and keep pace with current trends, forcing customers to constantly revise their product expectations. Consequently, the most efficient way for people to figure out how the new trends will work on their bodies is to go to the store and try them on.
Products that don’t have many sensory attributes or are uncomplicated to fit are more likely to be bestsellers online. Your classic white tee, the twelve-pack black socks, and the underwear you’ve been buying for years aren’t likely to change often enough that you need to re-examine them in person. The researchers also find that customers are more likely to buy repeat items online.
Marketing Strategies Based on Customer Behavior
Soysal’s research implies that multichannel fashion retailers, rather than completely
shifting their marketing and focus to online goods, should market according to customer attitudes toward certain product attributes. The silk blouse that seems to fit everybody differently and the fragrance that smells
either like strawberry or pine, depending on who you are, might be too sensorily complex
to market online, and retailers should likely focus their efforts on showcasing these
items in stores. This way customers can touch, smell, and try on the products that
capture their interest.
Items that can easily be described or are unlikely to change drastically, as in the case of home decor or men’s basics, may benefit from marketing strategies geared toward online sales. When customers don’t feel that it’s important to examine a product in-person, shopping online saves them valuable time and energy.
There are some customer shopping habits that the researchers speculate are driven by things other than the need for sensory information. For instance, they note that intimate apparel is likely purchased online primarily because anonymity allows customers to sidestep the embarrassment often associated with the product. However, people likely prefer shopping for gifts offline because the increased effort makes the gift seem more symbolic and personable. Regardless of why customers sort certain products into online or offline channels, the researchers prove that this act of sorting accounts for many long tail effects.
Not only does Soysal’s research have implications for marketing strategies, it also suggests that a bestseller in an offline environment might not translate to being a bestseller online and vice versa. In order to increase sales across channels, retailers should consider where products most align with customers’ shopping preferences. E-commerce is ushering in major changes for retail, but Soysal’s research demonstrates that the why of it all should be just as important as the shape of the change taking place.