Offline experience stores supercharge online sales

Customers who experience your products offline spend 60% more online, shop 28% more often and are much less likely to return items

Today’s research from Wharton and Harvard is retail-focused. Wharton even made a podcast (17min) about it if that’s your jam.

If you’re not a retailer, try to think about it more broadly. Offline experience stores are relatively new. Is there something else you could do in your industry to help supercharge your online sales, even if you are selling B2B SaaS or insurance? Demos, free trials, booths, and events (when we’re not a pandemic) might be only scratching the surface.

Customers, no matter the industry, are much more comfortable buying something if they can try it or have a taste of it beforehand. Even more so if in an offline environment.

New to Ariyh? Subscribe below for a tip each Tuesday and Thursday.


Offline experience stores supercharge your online sales more than you think

Impacted metrics: Customer spending | Purchase frequency | Reduced returns
Channels: Ecommerce sales | Retail store

Recommendation

Provide a zero inventory store (ZIS) for your customers to experience and get comfortable with your products before purchasing online

Effects

  • Online customers who visited a ZIS (vs those who didn’t) spend up to 60% more, show a 28% time reduction between purchases, buy in 20% more product categories, and are less likely to return items.

  • The effect is particularly strong for more tactile, higher-priced items, and for first time customers.

Why it works

  • Seeing, touching, trying products, and having a product expert to talk to means customers are much more confident of their future purchases with that retailer.

  • Without a ZIS experience, customers are much more likely to return higher-priced items. That doesn’t mean they’re happier with lower-priced items. More likely, they can’t be bothered to return them (and probably won’t buy from you again).

Limitations

  • If the offline store is congested, the experience is poorer and the effect is weaker.

  • This research was performed on a single digital-first men’s apparel retailer. Previous research suggests that many findings are likely to extend to other categories but this was not covered in this study.

Companies using this

  • Some notable digital-first brands deploying this strategy are Allbirds (footwear), Away (luggage), Casper (bedding), Harry’s (men’s grooming), and Warby Parker (fashion eyewear).

  • Among legacy retailers who have adopted or tested this strategy are IKEA (furniture), Nordstrom (luxury department store), Urban Outfitters (apparel), Target, and Walmart (both general merchandise retailers).

Study type

Market observation of a men’s fashion apparel firm (brand kept confidential), United States

Source

Bell, D. R., Gallino, S., & Moreno, A. (July 2020). Customer supercharging in experience-centric channels. Management Science.

[Link to research paper, Author’s interview]

Affiliations

Idea Farm Ventures, The Wharton School, and Harvard Business School

Remember: Because of the groundbreaking nature of this paper, it could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.


Additional mini-tip


Want to share feedback or ask a question? -> Reach out to thomas@ariyh.com

Was this forwarded to you? -> Subscribe below or read previous articles here