Brick-and-mortar shopping vs. e-commerce: what’s the ROPO effect?

Shuttered busi­ness­es, empty shopping malls, and lonely sales people: this dreary de­scrip­tion more or less meets the de­scrip­tion of brick-and-mortar retailers’ worst night­mares. What’s been the cause for all the commotion? The answer is the e-commerce boom. And while some business models are on the decline or in the process of retooling to better meet customers’ needs, figures on the state of tra­di­tion­al retail prove that the sky really isn’t falling. As of 2016, e-commerce in the United States only occupied a market share of 8.1%.

Growing evidence from recent studies suggests that the rise of e-commerce has strongly changed consumer behavior, a de­vel­op­ment that doesn’t nec­es­sar­i­ly come at the expense of offline shopping. Instead, potential customers often use online shopping sites do to research on the products their in­ter­est­ed in prior to making their purchases. This change in behavior is known as the ROPO effect.

The ROPO effect is just one of the many new in­ter­re­la­tion­ships occurring between the various marketing sales channels. De­vel­op­ments in pur­chas­ing and media-usage behavior have con­tributed to the changing ex­pec­ta­tions that customers now have for their shopping ex­pe­ri­ences: for one thing, customers today crave more in­for­ma­tion than ever about the products or services they’re in­ter­est­ed in pur­chas­ing. This need helps explain the media dis­rup­tion that occurs when shopping (i.e. switching from online to offline, or vice versa, during the decision making and/or pur­chas­ing process). Health­care, finance, insurance, and tourism are all in­dus­tries that have been observing trends like this for some time now. For products requiring more extensive and pro­fes­sion­al advice, such as life insurance, many potential customers spend con­sid­er­able time doing online research before they decide on a policy. While pro­fes­sion­al advice may be important to many customers, according to a 2015 study on brick-and-mortar commerce carried out by PWC, this aspect doesn’t even rank among the top reasons to visit a retailer as opposed to shopping online. Some of the most popular mo­ti­va­tions that par­tic­i­pants cited were:

• ‘I am able to see, touch, and try mer­chan­dise’

• ‘To get the product im­me­di­ate­ly’

• ‘I’m more certain about the fit/suit­abil­i­ty of the product’

• ‘I’m more com­fort­able buying per­ish­able products in-store’

The ROPO effect offers potential for tra­di­tion­al retail outlets. According to one Google study from 2011, roughly 38% of the re­spon­dents made their purchase offline after having first done their research online. The in­creas­ing promi­nence of mobile devices in our daily lives since the study was conducted means that this figure is probably much higher. Potential customers regularly use smart­phones and tablets during their shopping ex­cur­sions to find out more about the products and services they’re in­ter­est­ed in - and above all to compare prices.

The con­se­quence of this for local busi­ness­es means that they’re advised to become more ‘digital’ with new ideas and concepts, which in turn makes them more at­trac­tive to internet-savvy online shoppers. The future will most likely feature a fusion of both marketing and sales channels, and so-called ‘cross selling’ will continue to gain in im­por­tance. Con­nect­ing online and offline offers can be carried out with the help of different models. For example, marketing and sales teams have the ‘click and collect’ model at their disposal, which allows customers to reserve products online and then pick them up at a retailer at a later point. Instead of ‘research online, buy offline’, you could say ‘reserve online, pick up offline’.

The terms local SEO and local commerce often coincide with the ROPO effect. The main idea behind these concepts is to present retail stores online and to make products available at these locations easy to find online. Even if a local store doesn’t have an online store, it’s crucial to still have some sort of internet presence available that com­mu­ni­cates offers to potential customers. Some of the most important in­for­ma­tion that needs to be included here is:

• A complete product portfolio

• The avail­abil­i­ty of the different items

• Opening times

• Di­rec­tions and parking in­for­ma­tion

• Options for making reser­va­tions (telephone/online reser­va­tions)

On the IONOS My Website page much of this in­for­ma­tion can be in­te­grat­ed and made available in just a few clicks with the help of practical business web apps. Some retailers even go one step further. A good example is il­lus­trat­ed by the ready-to-assemble furniture giant, IKEA. Their website enables users to check the avail­abil­i­ty of each and every product at the location nearest to them. Customers are able to print out a list of items from their basket, and this list will then contain the precise location of these items at the storage hall from the branch of your choosing. In addition to a soundly thought-out web presence, finding the right online marketing strategy also plays an important role in getting the desired results from the ROPO effect. Local search ads are es­pe­cial­ly important here, as this is the only way that customers are able to find out that the store exists in the first place. So-called local SEO seeks to increase the search engine ranking of regional companies or offers.

The ROPO effect is a big chance for brick-and-mortar retailers. A well-thought out and optimized online shop is the re­quire­ment for catching online customers and serving their needs in person. In addition to a clear overview of the product portfolio, it’s essential to com­mu­ni­cate the avail­abil­i­ty of products. Customers that are attracted to stores by a solid internet presence only to find that what they want is no longer available will most likely make their purchase online the next time around. For this reason, giving customers the chance to contact a store or make reser­va­tions is crucial for those wishing to make use of the ROPO effect.