Mobile Reasserts The Power Of Place and Retail Experiences Against A 'Virtual' World

Does the mobile revolution really undermine brick-and-mortar stores by hijacking the physical experience with online alternatives? That is the showrooming scenario that petrified retailers for several years. Now, we understand the interaction of device and retail experience is more nuanced (usually) than simply a matter of Amazon poaching customers from Aisle 5. Chilling -- and real -- as those cases may be for retailers, the fact is that many people use their phones to get product info that supports an immediate buy or to get validation that the price they are paying is not too far off the mark. And retailers do have an opportunity to capture that customer into their own digital ecosystem as well. Yeah -- it is more complicated than just showrooming. And those behaviors among consumers are still evolving anyway.  

But in a brilliant reversal of the usual question of how digital/mobile impacts physical retail, University of Toronto Professor of Marketing Avi Goldfarb asks instead what impact physical retail proximity has on people's online buying. Moreover, do people actually use mobile for shopping very differently from the way they use the PC and in ways that actually support local retailers?   

Run, don't walk (virtually, of course) to his fascinating piece of research and analysis at MIT Technology Review. Our surface impression of the digital revolution in shopping is that e-commerce freed us from physical limitations and created a new online space where everything could be bought from anywhere. But this supposed disconnect between physical and virtual was never really true. “Physical context matters to e-commerce,” he writes. The proximity of book outlets to a consumer impacts how many bestsellers they order from Amazon, despite its superior discounts. The “disutility” of ordering online is weighed by consumers in their decisions of where and how to purchase. In many aspects of supposed location-free online space, we actually are working and interacting more locally than we suppose. “All online behavior has an offline context,” he says.

Goldfarb and his colleagues' research into mobile usage patterns vis-à-vis retail suggest that devices actually strengthen the role of local physical resources. Smartphones are bringing the Internet into closer proximity to the point of action, which actually connects the Internet to more specific places in unexpected ways. Let me quote Goldfarb at length here, because the research shows how peculiarities of device-based search and discovery actually make the mobile version of the Internet experience more tied to where you are.

“The offline environment is actually more important when consumers connect through a mobile device. With colleagues including Sang Pil Han of the City University of Hong Kong, we studied 260 users of a South Korean microblogging service similar to Twitter. What we found was that behavior on the small mobile screen was different from behavior on the PC. Searching became harder to do, meaning that people clicked on the top links more often. The local environment was also more important. Ads for stores in close proximity to a user's home were more likely to be viewed. For every mile closer a store was, smartphone users were 23 percent more likely to click on an ad. When they were on a PC, they were only 12 percent more likely to click close-by stores.”

While the research is limited and of course tentative, it does what research should do -- spark insight and theory, complicate our view of things and direct further inquiry. At the very least Goldfarb and co. are showing how mobile could be more salvation than threat to brick-and-mortar. It should compel retail to get into the local search and ad game to start testing for themselves some of these theories. I imagine that the power of mobile to reinforce local retail behaviors would vary across categories.

But I find the ideas here about the peculiarity of mobile Internet behavior especially intriguing because they reverse the polarity of our presumptions. Our natural starting point in conceptualizing mobile has been to think of it as the Internet extended to devices and “mobilized.” Goldfarb invites us thinking harder and get beyond those first frameworks. Instead, we need to consider how mobile allows the physical world to impact the Internet, both in the way we use it and the way online “virtual” entities may themselves have to change. 

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