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Consumer Experiences, the Key to Surviving in an Omni-Channel Environment: Use of Virtual Technology

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Consumer Experiences, the Key to Surviving in an Omni-Channel Environment: Use of Virtual Technology Volume 10, Issue 3, 2018 Consumer Experiences, the Key to Surviving in an Omni-channel Environment: Use of Virtual Technology Hanna Lee and Karen K. Leonas, Ph.D. NC State University, College of Textiles, Raleigh, NC ABSTRACT With increasing demand of consumers for better shopping experiences and an increased number of online retailers, it is important for Omni-channel retailers to adopt and utilize several virtual technologies, which can support and complement their retailing practices. To strategically manage these technologies, it is imperative to analyze several specific cases, which utilize virtual technologies to align and implement multiple technologies in effective and efficient ways, and to make synergy among those technologies. The purpose of this paper is two-fold. First, to examine how Omni-channel retailers utilize and manage several virtual technologies, which are virtual/augmented reality, virtual fitting rooms and fashion shows, and virtual salespeople, to provide satisfactory online shopping experience by overcoming problems online environments fundamentally have. Second, to provide practical implications to brick-and-mortar retailers, who have recently ventured into online retailing, in their management of various types of channels simultaneously using technologies like the Internet of Things and Kiosks. Through the review and analysis of several cases, this paper provides managerial implications for practitioners to utilize virtual technologies in ways that can actually add value to consumer experiences and urge them to take a mixed approach toward virtual technology. Keywords: Omni channel, Virtual technology, consumer experience, consumer engagement 1. Introduction the realms of both sales and marketing in an Online retail channels continue to effort to increase engagement with customers increase and gain power within the retail (Hansen & Sia, 2015). industry (McCoy & Deena, 2011). Retailers In the online retail environment, that operate solely online have tried to exploit consumers can enjoy broader and deeper profits by being the first to move into this product assortments, lower prices, new environment, and brick-and-mortar convenient shopping experiences, and retailers have also started to utilize online available detailed product information channels. Today, retailers are utilizing both compared with the traditional brick-and- online and offline channels adopting an mortar retail environment. Simultaneously, integrated multi-channel approach, referred the emergence of online commerce, also to as an Omni-channel. This is taking place in known as E-commerce, with digital Article Designation: Refereed 1 JTATM Volume 10, Issue 3, 2018 innovation can provide several benefits to satisfy continuously changing consumers' firms. Because firms gained the ability to expectations was specifically emphasized. In have better and broader accessibility to this dynamic environment, firms must consumers through E-commerce, they could continually update and incorporate new enjoy market expansion with increased sales. technology, to gain the competitive In addition, firms can develop a deeper advantage and attract consumers, proposing comprehension about consumer demand more competitive advantages to consumers. through E-communication, which can, in Omni-channel consumers have started turn, enhance consumer experience (Choi & to show differential shopping behaviors when Shen, 2017; Lu, 2017; Noble et al., 2005). compared to the traditional shopping style. Hence, the importance of utilizing an According to Lu (2017), Omni-channel Omni-channel marketing strategy is widely consumers typically utilize multiple channels acknowledged and accepted as it has (both online and offline), for a single tremendous potential for developing purchase, and purchase products after competitive advantages. For these reasons, carefully evaluating several retailers. These brick-and-mortar retailers are working to consumers are eager to spend time expand their influence into online retailing evaluating, experiencing, and purchasing markets to compete with an increased products by looking for information in number of purely online retailers and aid in several channels simultaneously; they switch their survival (Lu, 2017). The competition channels and touch points interchangeably has become fierce and the importance of (Lu, 2017; Verhoef et al., 2017). As a result, adoption and managing several virtual today’s consumers have variation in their technologies to meet the needs of a more shopping behavior and in Omni-channel diversified consumer base in the dynamic environments, they use various resources to retail industry. Virtual technologies are those increase their shopping value and satisfy technologies that enable the function of an evolving needs (Dahlhoff, 2017). object or resources simulated or emulated in In this context, retailers should find software identical to that of the ways to provide a superior consumer corresponding physically realized object. experience as it has the ability to create a These technologies have tremendous point of differentiation in the competitive potential to increase competitive advantages retailing industry (Dhruv et al., 2009). The for these retailers because of their capability consumer experience is a central issue in the to improve overall retail performance retail industry as the importance of pleasure (Mathias, 2017). and emotion is realized (Holbrook & Digital technological development has Hirschman, 1982). Schmitt (1999, 2003) brought about significant changes in the retail defined consumer experience as “a process, environment resulting in changing strategies which starts from interaction between and management practices of fashion firms consumer and firms triggering other that were traditionally only part of the brick interactions and personal reactions.” Because and mortar marketing channel. Traditional the consumer experience involves rational, retail strategies have been to incorporate the emotional, sensorial, physical, and spiritual new online channels after the e-commerce responses (Schmitt, 2003; Schmitt, 1999; explosion in response to fierce competition Verhoef et al., 2009), the interaction between between online and offline retailers and even consumers and firms should be effectively between online and offline units in the same managed. According to Hoffman and Novak company (Delhi, 2017). Rust and Lemon (1996), consumers pursue hedonic value (2001) described these changes as increased compared to utilitarian value in the online interactivity between consumers and firms, retail environment. Contextual factors are the opportunities for personalization and most important factors that enhance customized service, and the importance of consumer experience (Dahlhoff, 2017). implementing appropriate retail strategies to Therefore, retailers should focus on Article Designation: Refereed 2 JTATM Volume 10, Issue 3, 2018 improving controllable factors such as the retailers' needs and expectations (Pantano & service interface, atmosphere, price, Viassones, 2014; Renko & Druzijannic, assortment, and multiple channels to provide 2014). a more hedonic and pleasant experience to With consumers demanding better consumers (Verhoef et al., 2009). Because shopping experiences and an increasing virtual technologies simulate physical goods number of online retailers, it is important for and services in a three-dimensional, Omni-channel retailers to adopt and utilize interactive, and realistic way, by several virtual technologies to support and incorporating them into the shopping complement their retailing practices. To experience, there is tremendous potential to strategically manage these technologies, it is increase benefits for both consumers and imperative to review and analyze several retailers (Jin, 2009; Moon et al., 2013). Some specific cases, which utilize virtual studies found a positive effect of virtual technologies to align and implement multiple technologies on consumer experience and technologies in effective and efficient ways engagement. Roggeveen et al. (2016 & 2015) and to achieve synergy. The purpose of this found visual cues utilizing digital and virtual paper is to identify methods to successfully technologies or dynamic messages are crucial manage several virtual technologies in the to increase the level of customer engagement Omni-channel environment that will enhance in both online and offline retail competitiveness in the market and provide environments. Therefore, firms that utilize at practical implication to practitioners by least one online channel have to realize the presenting which management approach will significance of improving consumers' result in the desired outcome. To implement shopping experience by aligning and this, the paper first reviews the way Omni- balancing virtual technologies between each channel retailers utilize and manage several channel to prevent internal cannibalization virtual technologies including and by adding complementary technological virtual/augmented reality, virtual fitting features to the retail outlet (Bassett, 2017). rooms and fashion shows, and virtual Also, it is important to provide targeted salespeople to provide satisfactory online information that is of unique value to shopping experiences. Second, this paper consumers to increase customer engagement identifies ways to manage different types of by connecting with the consumers. To channels simultaneously using technologies achieve this management objective, like IoT (Internet
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