Idling malls – The emergence of online consumerism

Idling malls –
The emergence of online consumerism

Written by Pieter Groenendijk, © 2010 University of Sussex

Introduction

“Online shopping will replace traditional shopping sometime after there is technology available to have satisfying sex over the net.” (Alan Langford, 2008)

Since the emergence of the web shop in the early 1980’s, retailers have begun to operate a web store alongside their physical shops. These commercial web sites were initially designed to represent and promote a company’s image, but as this essay will prove, the popularity of the web shop creates other possibilities. Even back in 1981, Michael Aldrich, pioneer of online shopping, predicted “As telecommunications become even cheaper and conventional transport more expensive the whole concept of buying goods and services is changing dramatically.” (Aldrich, 1981). In those days, he could not have predicted the cultural and economical impact of his invention. So is the vanishing of the physical retail a thing of the future and are we merely waiting for technological developments to provide us with the shopping experience we are used to? Marc Augé’s (1998) notion of places, non-places and spaces is useful for distinguishing the traditional shopping place from the virtual non-place. This categorization of the Internet as a non-place is supported by Bolter and Grusin (1999) when they claim that “Cyberspace is a shopping mall in the ether; it fits smoothly into our contemporary networks of transportation, communication and economic exchange” (Bolter and Grusin, 1999, p. 179). As explored in later sections, due the increasing richness of contemporary commercial web sites, the contrast between online and offline shopping is starting to blur. If web shops manage to replicate the shopping experience of the High Street, it will be harder to categorize them as non-places. Nowadays, online customers can listen to CD content, browse through books and even try on clothing in a ‘virtual dressing room’. I will explain how the shopping experience step by step is replicated on the web.

This essay will explore the culture of online shopping and with this information, analyse whether its popularity could form a legitimate threat to its counterpart, physical retail. By looking at business-to-customer (B2C) companies that are represented both online as in real stores, and converging theoretic perspectives and statistics, we will be able to acknowledge the emergence and impact of the web shop. Throughout this essay, I will focus on companies that exhibit their goods in both the physical and virtual world. I will also shed light on companies that intentionally remain online and reasons for this by looking at contemporary research on consumer migration from ‘bricks-and-mortar’ to ‘clicks-and-mortar‘ retail, and vice versa.

Through several relevant sections in this essay I have assembled the hard facts on this migration to virtuality and its motives. By combining researches it will become clear that consumers find it important to use the senses and see, touch and try on a product before purchase. The price also plays, perhaps due to financial crisis, a major roll in decision-making (Blauw Research, 2009, ACNielsen Homescan, 2005, and Nielsen Online, 2008). Firstly I will look at the different forms in which virtual shopping is exhibited and its accessibility through various media. Then, I will shed light on important consumer groups that play key roles in contemporary virtual shopping culture, as I believe this information to be essential to validate further statistics. After looking at the implications of online shopping, I will analyse the facts to open discourse on the potential of the web shop.

The many faces of virtual shopping

Virtual and online shopping comes in many forms. For example a website like Amazon.com; a diverse online store made up of several virtual departments. This website contains a minimalistic look, and is therefore able to load quickly on both broadband and the older dial-up modem connections. According to Dodge (2001), simplicity is the source of the website’s commercial success, together with an organized virtual shopping experience. While even most contemporary shopping web sites consistently bear these basic forms of design, they will always exhibit essential geographical dimensions (Lange, 2001, in Currah, 2003).

Before analyzing which effects websites like these can have on their physical counterpart, or bricks-and-mortar retail, we need to acknowledge their advantages and disadvantages, reasons to switch to the online channel or back. I aim to discuss some of the most popular forms of media in which a virtual shop is able to exist. This section will proove that the virtual shop is not only able to present itself within a computer’s browser, there are other interactive channels to lure us into buying goods.

Andrew Currah (2003) adds how websites like Amazon integrate a certain amount of artificial intelligence, using real-time information about the users and their behavior to combine simplicity and interactivity on a personal level (Currah, 2003). It is interesting how these sites, consisting of many pages of purely computer generated code, seem to act on a more personal level. It is implemented as if to present a knowledgeable fictional employee that knows what you bought, what you might need to buy, and your interests. Currah (2003) divides contemporary commercial websites into two catergories; The first one consists of websites created to enforce a ‘wow’ effect, interactive websites with a colorful, rich content and a slow loading time. According to Augé (1998) non-places like these produced by hypermodernity. As technology is creating virtual game worlds and fictional computerized locations, these immersive web sites can indeed be categorized as such. The second category are minimalistic websites such as Amazon, a functional and fast loading website. In both cases, these commercial website are available every hour at every day and from a single location.

Amazon is an online store, lacking any presence on the High Street and shopping malls. Unlike Amazon, most web shops in fact are created as an extension of an already existing physical store. These websites are created for many purposes. Shops that sell mainly one brand use it as a promotion technique or a brand identity representation. Not only do web sites refer to their shops and locations, some shops in fact instantly refer to their website. Reason for this could be to stimulate online sales and perhaps eventually to disappear from the physical market into the non-place of cyberspace, saving money on shop employees, building costs etc. This is the case with ‘shopname.com’ retailers to be found in shopping malls. The Dutch ‘Kijkshop.nl’ (Lookshop.nl) consistently started using the domain name as a logo, as if to instantly direct people to their website (see appendix nr. 1). The company went online during the web shop boom in the late 90’s and changed their logo not short after that. Currently, this electronics dealer’s physical shop consists only of showcases, which might resemble walking through a website’s product database. This way, the shop’s strategy is to make the consumers wander in a serene state of orientation, unforced by obtrusive store employees. Also, when orientating on the market online, virtual representations of a store might even be visited before their physical counterpart. When this happens, the overall ‘experiential value’ (Currah, 2003) is the key factor in levering a company above its competitors. As the browser-based variant of the virtual shop is widely accessible to many of us, this is logically the first form to mention in this section. In fact, Nielsen (2005), a company focussing on media research, writes on their website how in 2005, 55% of the United Kingdom’s population had Internet access at home. When looking at other locations to go online, such as schools, libraries, work etc., the number rise as high as 80%. By looking at these facts, we can acknowledge the immense accessibility of the Internet and understand why it is being used to represent companies.

In its online form, there are different media used for virtual shopping that one would not immediately think of. Not only have we seen a growth in amount and diversity of offered goods online, the channel and medium through which these are offered has also changed. In their article about E-commerce use among digital TV subscribers in Spain, Garitaonandía and Garmendia (2009) touch upon this increasingly popular form of shopping. They explain, “subscribers to Digital+ can buy goods, play games, do online banking and credit their mobile phones through the use of the remote control, meaning that the television itself becomes a device for electronic commerce (t-commerce)”, (Garitaonandía and Garmendia, 2009, p. 418). By implementing this form of shopping in Digital TV, companies manage to combine all offered advantages of television with their goods. The TV set, being an embodiment of entertainment and education, provides the attention advertisers are looking for. After the popular use of radio as one of the main information media, television is no longer used merely as a ‘background medium’ (Martinson et al., 2002). Its visual output demands an attention that is able to grasp the attention of many a passerby.

Websites like the previously mentioned Amazon, but also eBay, converted their website for mobile use. No longer are shoppers restricted to a computer or even the (arguably) mobile laptop, now they are able to fulfil shopping urges anywhere within reach of a mobile network signal. In many cases these mobile shopping pages are nothing but a simplified version of the original shopping website. In other cases, however, we are being offered a service that approaches virtual shopping slightly differently. ‘Frucall’ for example is a new service that allows consumers to call a certain (highly charged) number and enter a product’s bar code or ISBN number. A voice will then read out the cheapest prices on a variety of online shopping websites. Frucall therefore embodies yet another approach to keep up with ever-evolving technology to acquire consumer attention, and to be one technological step ahead of  competitors.

By ‘redirecting’ the function of the television and the mobile phone towards virtual shopping, we see this augmentation of the medium; the application of the medium is broadened to uses that they were not initially designed for. In some ways, one might say that virtual shopping is a product of the blurring of boundaries between these media. It’s important to focus on the theoretical significance of these commercial websites in all its forms. The Internet for example, has the capacity to ‘localize, collapse and fold geographically extensive markets into web sites’ (Leyshon et al, 2002, in Currah, 2003, p. 7). By spreading the company’s promotion out over several media types, they can create multiple points of contact, improving accessibility. A customer might, for example, orientate and compare products and prices in the online shop, and then visit a nearby physical located version for purchase and other detailed information (Currah, 2003). Some web shops do this by writing “Call or visit us for the price” next to the product’s image.

We have seen how these various forms of non-places offer an alternative for places. On the field of mobility, consumers can do their shopping from any location within reach of a mobile signal. From the comfort of one’s own home, shopping manifest itself through television and the personal computer. But is every user similar? In the following part of this essay, I look more closely at the buying behavior of some important groups of online consumers.

Target Groups

The most important focus of shopping websites is of course the (potential) customers. But of whom does this crowd actually exist? Computers are now being used by a varied range of people for a multiplicity of uses. Web designers will need to  ‘unfocus’ layouts and interactivity to attract a broader range of people. I will look at two groups of consumers that play a roll in online shopping as great as the group that designs it. As mentioned by Martinson, Schwartz and Walker (2002), the emergence of a greater amount of female users now more intensely reflects the demographics and emancipation has also broken through on the field of computerization. Women have seemed to be ignored previously on the Internet, application and video game market.

For women with young children, a day in town might in many cases be seen as quite a mission. For this reason, online shopping offers a possibility to remain at home with their children in a safe and comfortable environment. Perhaps for this group, the disadvantages of online shopping are taken for granted in return of saving themselves a tormenting day out. If one does decide to venture out, nearness and accessibility of the shopping facilities require a certain standard. Martinson et al. (2002) researched which leisure activities are being practiced by fourteen different women. At first, they note “We found it interesting that none of our participants mentioned online shopping as a leisure activity. Even though some participants mentioned shopping as leisure (e.g. browsing through a gift shop or stationery store), none of the women in this study mentioned continuing this activity online as a leisure pursuit.” (Martinson et al, 2002, p. 45).  This result is interesting when considering the popularity of online shopping in general. Shopping is mentioned, but online shopping isn’t even seen as a leisure activity by any of the fourteen participants. In my opinion however, this might only exclude online shopping from being mentioned as being leisure. Virtually shopping for groceries or Christmas presents, for example, is a form of online shopping that for many would not be stated as leisure, while many consumers, both male and female, indeed take an active part of it.

In ‘Coming of age with the Internet’ (2006), Mcmillan and Morrison explore another important group of virtual shop users, namely teenagers. This group forms the next (and current) generation of virtual shoppers and analysis of its behavior is essential for future design implications and marketing focusing. Students, for example, are an ideal group to focus research on, as they are young enough to maintain an open mind towards media and the Internet, and mature enough to have started building ‘lifetime patterns of media use’ (Mcmillan and Morrison, 2006). Young people find that parents and grandparents did not understand the potential of interactive technologies while these teenagers, however, live in a digital media culture. First contact with virtual shopping, however, was to be established due to actions of these earlier generations. Many parents bought the child’s first computer and paid for broadband bills (Mcmillan and Morrison, 2006). From this perspective, every generation within the family plays a key roll in establishing both a physical and behavioral connection with the web shop.

Recognizing these important consumer groups is important when looking at the cultural history of the online customer. Differences in consumer behavior patterns decide whether a migration from offline towards online transactions will shape. As soon as consumers begin to use the Internet, the High Street loses crowdedness. In 2008, 86 percent of Internet users worldwide have purchased goods online while in the United Kingdom figures go up to an astounding 97 percent (Nielsen Online, 2008). One can imagine how the online sales of goods will increase once these users establish trust with the web shop after many successful transactions.

E-shop ‘till you drop

Although there are many advantages of the web shop, as explored previously, it also comes with some issues. First of all, even though using a reasonably connected computer may seem obvious to the western population, for many, even in Europe, do not have access to computers. This lack of access forces these potential buyers to stick with market places and bricks-and-mortar retail. If they do indeed manage to acquire access, the essential skills needed to perform online transactions might be missing. As described in this essay’s section about target groups, young people currently grow up with interactive media and will therefore understand more easily the complexity of virtual shopping. This is less the case with previous generations that had to relearn technology in, for example, photography (analog to digital), television (the tube to Youtube) and now, shopping.

I’d like to consider the statement of Currah (2003) when he notes that “On the Internet, the situation’s completely different . . . there’s no fancy window displays, not the same atmosphere, the in-store layout, the serendipity etc. . . . to encourage impulse purchases.” (Currah, 2003, p. 14). Although the shopping experience is hard to compare between these two spaces, I will argue that ‘fancy window displays’ do indeed take their presence in the form of Home pages on the company’s website. Overall, impulsive buying is not merely a matter of the physical market, Internet addiction shapes in its own way a means to grasp the user’s attention and lure them towards spontaneous purchases. Thus, shopping behavior manages to express itself in different forms. One of the impulse control problems caused by virtual shopping is a significant new issue in computerization; it is categorized under ‘Net compulsions’. Among others, this includes obsessive online gambling and indeed, online shopping. (Griffiths and Davies, 2005) As this gambling-like compulsion occurs in both the traditional and the virtual shop, it needs to be acknowledged as one of the great dangers of online shopping.

As companies fight a virtual battle for online attention, some cross the line of accessibility for the greater good of aesthetics. Once web sites are embellished with unfamiliar new components, special software needs to be downloaded. This does not only delay the consumer’s quest to the online information or services they need, it scares them off. Luckily for these users, a majority of modern web sites are tailored to any system and companies tend to seriously invest in the accessibility of their online location. “Sites are sophisticated, security is good, delivery times are efficient and shopping via a pc really does offer true convenience to the time poor consumer.” (ACNielsen Homescan, 2005). Not only do I wish to purely present the faults of the online shop, there are indeed side effects to be mentioned with a positive effect. Nicholas Scibetta, director of Global Media Network, noticed how web shops tend to create forms of virtual communities. According to Scibetta (2009), 44 percent of online shoppers read customer comments and feedback ratings. “The opinion of others weighs heavy in making purchase decisions. … Also, many comments are being made on each other’s reviews. … The effect is that social networks are being created through the web. “ (Nicholas Scibetta on Retailnews.nl, 2009, freely translated). The website Retailnews.nl adds how these comments are even more appreciated than the actual product descriptions on the site (Retailnews.nl, 2009). This is confirmed by Nielsen’s President Jonathan Carson, “Recommendations from fellow consumers – whether they are people they know or fellow online shoppers – play an enormous role in the decision-making process” (Nielsen Online, 2008).

Books remains the main product to be sold online, followed by clothing, DVD’s and video games. Groceries and automobiles however, do not share this popularity (Nielsen Online, 2008). Even though a sophisticated security system is linked to almost every legitimate web shop, consumers seem to find the purchase of a vehicle through the Internet a step too far. Either this is the main reason, or the possibility of bargaining makes us rather step into the showroom of a car dealer. Perhaps it is the fumes of leather and the ability to experience the car. In the next section we look closer at the gathered information and theories, and relate these with hard statistics on the trends in online shopping.

Desertion of High Streets

“A decade ago, as online retailing began to take off there were all sorts of outlandish predictions of how rapidly it would grow – if you believed some pundits, the high streets would be left deserted as we all retreated to our computers to do our shopping.” (Rory Cellan-Jones, 2009)

Now we have seen in which forms goods are offered and by which means, we could analyze how this affects the act of physically shopping. Do we ignore the convenience of modern technology and give in to our need of crowds, noises, smells of the High Street, or, do we embrace this development and purchase our goods online from now on? If we consider Cellan-Jones’ statement, as quoted above, the development of shopping in its virtual form has not evolved quite as far as expected a decade ago.

As we have seen, there are many advantages of online shopping which are magnified by Nielsen Online’s ‘Pre-Holiday Survey’ of November 2008. This survey analyses shopping behavior prior to important holidays. Out of 1300 active online shoppers, 76% name the main reason to purchase online is the possibility to shop 24 hours per day. This is extremely useful for buying last-minute gifts. Other reasons include time saving, avoiding queues, and avoiding crowdedness in the stores (Nielsen Online, 2008). Rory Cellan-Jones (2009) argues how online shopping has become the way most people now deal with their present purchases, for example around busy Christmas times. While this time of the year evolves around buying presents, the Internet offers a solution for quick and cheap shopping. As Cellan-Jones (2009) points out, the choice of products divide the group of consumers in those who buy online and those who buy offline. He argues how the Internet presents itself as the natural place for shoppers to purchase books, DVD’s and music. The High Street focuses mainly on other goods (Cellan-Jones, 2009).  I would suggest that the annual ritual of Christmas shopping gains in attraction by being part of the overall Christmas feeling. For this reason, many shoppers choose to partake in the event by visiting their local decorated shopping mall instead of spending these festive days behind a monitor.

Alan Langford (2008) takes the idea of the physical shopping experience a bit further by comparing it to sex, a multi-sensory experience. Just like intercourse, shopping is seen as an act that involves sight, sound, taste, feel and smell. (Langford, 2008) According to him, serious issues will be raised once the technology of shop’s online presence also involves exploring these senses. An arguable point comes up once Langford notes that the only remaining advantage of bricks-and-mortar retail is instant gratification (Langford, 2008). This notion is being contradicted by the fact that certain goods are brought to the customer by the click of a button. Examples are online-streamed movies (Netflix), music downloads (iTunes Store) and articles (of which many being used in this term paper, from Sage Publications).

Here we stumble upon one of the key attractions of online shopping; an instant online delivery of any product that could exist in digital form. Of course, the speed of transaction of these goods is completely dependant on the Internet bandwidth of the user. Unlike ‘touchable’ products, the sale is not restricted by stock size or holiday bustle. In some ways, physical goods are being represented in virtual form. Many companies tend to virtually present all aspects of the product that one would initially look for in the shop. For example, 360° views of the product, online simulation of digital devices, even virtual dressing rooms. Even the shop employee is being replaced by a live chat function to answer questions or make suggestions (Currah, 2003).

After the switch to the online shop, consumers do not wildly go on a spree and order anything from anywhere. As with traditional shopping, the returning customer is a major source of income. Globally, 60 percent of online shoppers regularly buy at the same website (ACNielsen Homescan, 2005). This might be partly due to an increase of trust once the fist package has made it way to the customer’s doorstep. Blauw Research (2009) in the Netherlands researched reasons for this switch of shopping channel. Unlike Nielsen Online’s ‘Pre-Holiday Survey’, this so called ‘Multichannel Monitor’ does not focus merely on shopping behavior in busy December times. After orientating both online and offline, the first motive to buy in a web shop is the price difference (48% of 1706 interviewed participants). 35 Percent of the participants switch due to the convenience of purchasing product at home. Interestingly, the switch is made the opposite way as well. The majority of people (34%) buy offline for the reasons of being able to see, touch and try on the product. Secondly, special offers and sale in the physical shops attract a large percentage (27%) of people who make the switch, especially in times of financial crisis (Blauw Research, 2009). I may conclude that the senses play a most important roll in purchase decisions. Also, keep in mind that advertising and other promotion gets a chance to grasp the customer’s attention in the High Streets or shopping malls. This could very well influence these statistics. Researchers discovered that the Internet is the number one source for information and orientation before purchase, but the actual shop is where orientation mostly leads to purchase (Blauw Research, 2009).

In closure of this section, its useful to mention that “place and non-place are rather like opposed polarities: the first is never completely erased, the second never totally completed” (Augé, 1998, p. 79). Bricks-and-mortar retail might be put under pressure from their online competitors, and eventually some might be forced to close. But High streets are often situated in the cultural centre of a city, a place rich of history and atmosphere, and could therefore not just be ignored.

Conclusion

In this age of e-commerce, virtual shopping plays a major role on the market and will remain to do so for the time coming. As consumers getting more and more used to Internet payment and the process of online shopping, the fear of security breaches is slowly diminishing. In some cultures however, the crowd remains distrustful. This also happens with the Latin population described by Garitaonandía and Garmendia (2009). In their article they describe how this is combined with a lack of access for a large percentage of the population and a deep-rooted shopping tradition among Latin people, who prefer to examine goods prior to purchase instead of shopping online via a catalogue (Palacios, 2003). Statistics from Blauw Research confirm that this is also the case in the Netherlands, a westernized country proven to show very similar results with the United Kingdom (Nielsen Online, 2008). It is to be believed that these shopping traditions seem to manifest themselves in every country with a reasonable history of markets and shopping. However, products that don’t need to be examined prior to purchase have proven to be the best selling items on the net. “Some of the biggest buyers of books on the Internet are from developing countries – China, Brazil, Vietnam and Egypt – indicating massive growth potential for online retailers that can specifically target these fast-growing markets.” (Jonathan Carson in Nielsen Online, 2008). For these locations, the commercial website promises to develop into a ‘new and remarkably dynamic space of consumption’ (Currah, 2003).

The Internet has always been a non-place of hedonism, an untouchable location without boundaries that has proven to provide means of escapism for many. This is partly where online shopping finds its charm. The act of shopping online has been commoditized and plays a key roll in contemporary Internet culture. Even the function of the shopping mall, combining several stores in one location, has been digitalized. So called ‘portals’ resemble virtual malls, merely composed of digital shop fronts (Currah, 2003). Computerization can be seen as one of the embodiments of modernity. Augé (1998) stated; “Modernity does not obliterate them [places with history] but pushes them into the background”. We could see how traditional shopping mall is one of those places that are in danger of being ‘outspaced’ by virtuality. Behavioral patterns of the users will always decide if this will be the case. Therefore, further research on shopping behavior of our next generation could provide us with clear and accurate information on the switches to the online channel or back. Back when shop owners knew every single customer, a sense of community was created within the boundaries of the store. Nicholas Scibetta (2009) taught us how this phenomenon is forming on commercial websites when users comment on each other’s reviews and online discussions are started concerning a product. Perhaps this is one of the first steps in replicating the physical shopping experience.

Consider the notion of Rory Cellan-Jones (2009), where he tells us how a decade ago predictions were that we would only stick with virtual shopping by now. That E-shopping is a rising phenomenon cannot be ignored; “whatever consumers are buying and from whom, it seems that Internet shopping, particularly for everyday goods such as groceries is here to stay. It marks a new era in home shopping and is fast becoming an established part of our lifestyles” (ACNielsen Homescan, 2005). But perhaps our predictions are too futuristic. To see crowds disappear from the malls and High Streets is surely not plausible in the next decades. Currently, virtual shopping has proven to be a useful promotional extension of bricks-and-mortar retail and another point of access to the shop. The amount of cases of shops making the switch to online, and remaining here exclusively, has been too small to show a significant difference in the streets. The fact that books and clothing are the main sales objects on the net (Nielsen Online, 2008) does not seem to influence the dominance of bookshops and clothing stores in any city centre.

Even though virtual shopping was created in the 1980’s (Aldrich, 1981), it has only been intensively used in this decade. Thus, future research on the trends of online shopping could more accurately present its growth. If this does imply that the web is the way to go, we might see a higher amount of shops migrating online. This might be a fluent process where, as in the case of Kijkshop.nl, the store is slowly preparing itself for this step. As mentioned before, the urge to be able to see, touch and try on the product before purchase has been the main reason to visit the physical shop (Blauw Research, 2009). This confirms the very first quote in this paper. Once technology is advanced enough to stimulate all senses, virtual shopping will replace its traditional counterpart. Until then, the tradition of markets, shopping malls and High Street will remain.

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