/ Modified apr 9, 2013 11:53 a.m.

Retailers Mull Online Vs. Store Strategies

As e-commerce grows, businesses adjust, consumer scientist says


The Global Retailing Conference in Tucson this week is focusing on how online shopping is changing the marketplace for businesses.

The annual conference this year includes sessions on the global economy, reinventing the use of store space and the future of bricks-and-mortar stores.

The driving force is the rapidly growing online shopping market. E-commerce topped $1 trillion in 2012, about 6.5 percent of retail sales in the United States, said Anita Bhappu, associate professor of retailing and consumer science at the University of Arizona.

Bhappu, who will speak at the UA-sponsored conference Thursday, said e-commerce is growing by about 18 percent a year.

"And when you're talking about markets like China and other Asian markets such as Korea, India, we're talking sometimes triple-digit growth rates in the e-commerce side of the market," Bhappu said.

One challenge bricks-and-mortar retailers have is competing with a phenomenon known as "showrooming," she said. That's the moniker for people who look at products in person at a store, then buy them online, either from a mobile device while standing in a store or later at home on a computer.

"Showrooming is an issue that many of the traditional bricks-and-mortar retailers are concerned about," she said. "What that represents for the retailer that essentially is hit with showrooming is a lost sale and an added cost because you've essentially provided a sale to your competitor by physically providing the merchandise for inspection."

That's causing changes in the retail industry, she said. Target is an example. During the 2012 holiday shopping season, Target matched the price of any local competitor and any online store, she said, and that kept business in the store.

"You can check a price, but they'll match your price in store and you'll buy from them," she said. "They also enabled shoppers in store to order product that was out of stock, for example in the toy section, and have it delivered for free to either someone you wanted to gift that product to and or your own home."

Another trend in online marketing is emailing customers once they've purchased something. But Bhappu said that isn't necessarily the most effective, because 92 percent of customers trust recommendations from people they know, while just 58 percent trust the information they get from companies.

Listen to the radio version of the story:

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