Volume 18, No. 1 - Spring 2009
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Global Consumer Experience

Faculty Study

Customers'

Digital

Revolution

By Nancy Kolsti

Merchandising and hospitality management researchers group photo

Merchandising and hospitality management researchers include, clockwise from left, Sanjukta Pookulangara, Kiseol Yang, HaeJung Kim, Phil Xiang and Dean Judith Forney.

Photo by: Michael Clements

You want to buy souvenirs for your family while on a business trip, but you've run out of time to shop. Not to worry. Using an iPhone application, you can easily locate stores in town that carry the items you're interested in, compare prices and read reviews from other customers.

You type in your credit card number to place the order, specify that the items be shipped home so you don't have to carry them on the airplane, and then immediately receive a coupon on your phone for a future purchase. Instead of spending an hour or more going from store to store, you've spent only a few minutes shopping between meetings.

Researchers in the University of North Texas School of Merchandising and Hospitality Management believe this scenario for mobile shopping will become reality for more U.S. consumers — and not just while traveling — as the retail, merchandising, hospitality and tourism industries transform from service to global consumer experience industries. Customers from around the world regularly use the Internet and social media sites to connect to retailers, hotels, restaurants and tourism destinations — and to connect to previous customers for honest opinions about products and businesses.

Global Opinions

Shoppers comparing cameras at a retail store

Mobile shopping, online product information and customer-generated reviews are transforming the retail, merchandising, hospitality and tourism industries into a global consumer experience.

Photo by: Michael Clements

Judith Forney, dean of the School of Merchandising and Hospitality Management, says both the retail and hospitality industries are increasingly influenced by expectations for a total consumer experience, originating from customer reactions to interactions with a product or company.

"The consumer experience is holistic in nature and involves the customer's cognitive, affective, emotional, social and physical response to a retail or hospitality company," she says.

She notes that the consumer experience is created not only by elements in a "brick-and-mortar" business, such as atmosphere or service, but also by elements largely outside the company's control, including the purpose of a purchase and the influence of others' opinions.

Advances in technology "have exponentially increased opportunities to communicate with customers, which in turn has expanded the total consumer experience into a global consumer experience," Forney says.

She has researched the topic with HaeJung Kim, associate professor of merchandising, and Ruth Crowley, a former executive with Universal Studios Retail Group and Harley-Davidson. Crowley also is vice chair of the school's Merchandising Board of Governors, which provides industry expertise in support of the school's programs and research.

Forney presented the idea of the global consumer experience paradigm as the Pearson Prentice Hall Distinguished Lecturer for the International Textile and Apparel Association.

"In the past, we looked to the opinions of spouses, families and friends for planning a purchase or vacation," she says. "Now we have Facebook and other online groups that may include strangers from around the world."

Digital Engagement

The next big thing

Kiseol Yang, assistant professor of merchandising in UNT's School of Merchandising and Hospitality Management, says applications for mobile phones will become the next technology to provide a global consumer experience for more and more Americans — as long as the technology is easy to use.

Yang recently surveyed 400 mobile services users about adoption of shopping applications, publishing the results in the June 2010 Journal of Consumer Marketing. She points out that the majority of those using mobile shopping applications live in Asia, including her native South Korea, though several leading U.S. retailers already have mobile applications.

Sephora beauty and cosmetics customers can browse product reviews by category or look up a specific keyword or product number via mobile phone. Ralph Lauren customers need only scan a barcode appearing in print ads to shop via their phones, and they can sign up for mobile alerts about store openings and other events.

Yang's survey results indicated that convenience — saving time driving to stores, obtaining promotion information via cell phones and receiving customized product information — is not the only factor influencing if Americans will use mobile shopping services. She discovered Americans also want more entertaining experiences and user friendly technology.

"For mobile sites and features without technological difficulties to be available, it is crucial for retailers and marketers to design mobile sites and interfaces for both high-end and low-end devices," she says.

Because members of the millennial generation — roughly, the 75 million young adults born between 1977 and 1998 — are more likely than older adults to converse every day via Facebook, texting, Twitter and various chat applications, the smartest retailers, merchandisers and hospitality businesses are using these technologies to communicate with current and potential customers.

Kim says these companies are embracing the O-P-E-N brand, which includes the beliefs that consumers will gladly ask for what they want (On-Demand), desire individualized interactions with businesses (Personal) and engage in ongoing dialogue and share their purchasing opinions with the online public (Engaging and Networked).

Kim points out that digital engagement reduces barriers to customers' and businesses' interactions with each other, including time, distance and nationality.

"Instead of a global marketplace, which implies a physical place, we have a global marketspace," she says. "Businesses are using the global marketspace to find more commonalities than differences among consumers."

Forney says companies' virtual engagement with customers dates to October 2007, when Pizza Hut became the first company to advertise on Facebook. Three years later, the presence of retail and hospitality industries on social media sites "has proliferated beyond imagination," Forney says.

Multi-channel Shoppers

Sanjukta Pookulangara, assistant professor of merchandising, researches multi-channel shoppers — those who regularly use more than one method of shopping, including going to brick-and-mortar stores and using retailers' websites and catalogs. She teaches a new class on social media for students in the digital retailing degree program.

Experian Consumer Research in New York City notes that nearly 10 percent of the U.S. population can be characterized as multi-channel shoppers. They tend to make educated and informed buying decisions, look for sale items, and research specific products before purchasing them, the research firm says.

Pookulangara — whose research received two awards in 2010 at the international conference on Recent Advances in Retailing and Services Science, sponsored by the European Institute of Retailing and Services — used an online survey to determine why customers would use one method of shopping over others. She discovered that multi-channel shoppers did not switch to Internet shopping to save time or money, but to gather product information through blogs and customer-generated reviews.

Ten years ago, she notes, most of the items purchased online were books and CDs — "items you don't need to touch and feel to get a sense of the quality."

"Today, you can read others' reviews of clothing, shoes and hotels to determine their quality," she says.

Videos and Blogs

Eddie Bauer, LL Bean and J.C. Penney Co. are among the online retailers that post customers' ratings and reviews of merchandise on their websites. J.C. Penney also used YouTube last summer to provide honest opinions from customers — six teen girls who won gift cards to go back-to-school shopping at a J.C. Penney store created videos to show off their "hauls."

Pookulangara adds that J.C. Penney also connects to customers via Facebook and other social media, posting fashion trend information and videos and answering questions.

"JCP.com has a dedicated team of individuals whose only job is to monitor Facebook and Twitter," she says.

Kim says community blogs like Closet Couture, Polyvore and StyledOn — some with more than one million users a month — provide avenues for smaller retailers and independent designers to connect to potential customers.

"Surfing blogs doesn't necessarily lead to e-shopping," says Kim, whose research on blogging was published in the July 2010 Journal of Research in Interactive Marketing. "However, blogs can organize electronic word-of-mouth, building a blogosphere around product or service reviews shared by community members."

Hospitality Industry

Hotels, restaurants and other businesses in the hospitality industry also actively solicit customer opinions — a practice that began when Internet-based travel agencies became more popular than the brick-and-mortar kind, says Phil Xiang, assistant professor of hospitality management.

He notes that IGoUGo, Trip­Advisor, LonelyPlanet and other websites created in the last decade are largely based on information sharing among customers. Travelers use these sites not only to book reservations, but also to read other travelers' experiences and ratings.

Some hotel chains and tourism offices place customers' stories on their websites, Xiang says, and many hotels and tourist destinations are connecting directly with customers via social media — important because a handful of tourism websites dominate search engines.

"Chances are slim for travelers who plan their vacations online to have direct interactions with many tourism enterprises," he says. "If they only use search engines, travelers may miss out on interesting, not-so-famous places because it's harder to access smaller websites."

Online Necessity

The faculty members acknowledge that brick-and-mortar businesses still have their place. Xiang says business travelers tend to be loyal to certain traditional travel agencies to book hotels and airfare.

Pookulangara says shoppers still expect shipping and handling charges to make online shopping more expensive, though even that is changing. Retailers now have promotions with free shipping, provide online coupons and labels for free returns and allow customers to return items at brick-and-mortar stores.

"Online businesses are responding to customers' needs because Internet purchases are increasingly viewed as necessities," she says. "Many in the millennial generation have never been without the Internet and are dependent on being online for managing their lives."

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