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Episode 1: You have just left home for a morning meeting at the office, never too soon. Did you make sure to shut the gas cooker? What about turning off the air-condition? Conversely, if you have a security system, is it activated? And is the door locked? Even if already in the car, you can check and set these systems to the desired mode if necessary from your smartphone. A few hours after leaving home, your washing machine will start automatically working on your laundry, after it identifies that electricity demand is at a relatively low level or it may use renewable energy (also at a lower usage tariff).

Episode 2: You are about to start your way back home at late afternoon. You notify your house via your smartphone so that it can start cooling the place to a desired temperature. As you approach, the electronic door lock opens, the lights in the hall, kitchen and living room are turned on; the TV turns on at your favourite channel for this hour (or music starts on your audio system); and the microwave starts after a few moments to heat the meal you left there in the morning. By the way, clean clothes are waiting for you to pick up from the machine.

This is just a taste of the services that a smart home can provide to its residents. Many more scenarios may be constructed like those above, involving various devices and home appliances, and offering different sequences of activities to the convenience of the resident (e.g., lift the window shades as the alarm clock wakes you up, water in the bathroom is warmed up, and the coffee machine prepares your morning coffee). Smart technologies for the home are not so common as yet, and the field is still young, but they are on the rise and available to early experimenters who want to benefit from them.

Our home is the ultimate host for the Internet of Things where devices and appliances that normally do not seem in any way related to the Internet become automated, controlled and co-ordinated via the Internet (e.g., refrigerator, washing machine, lights, audio system and speakers, etc.). Many products or ‘things’ whose operation can be managed this way are the more likely to be found in the house or apartment. The concept of a smart home did not start with the Internet but it got greatly faciliated with the advance of broadband Internet. Furthermore, it is becoming even more feasible and practical in the age of mobile or wireless Internet transmission. Instead of approaching, for instance, a touch screen on the wall to monitor and command your home, you can do it while lying on the couch with your tablet or smartphone. Moreover, you may do this when away from home. In fact, mounting touch screens or touchpads on walls usually adds substantial cost to smart-up the home. Hence, using a mobile device to manage products at home not only increases convenience but also lowers costs for the residents.

This is, however, where implementation tends to get complicated. The market is as yet not so well organized. It is already accepted that operating each smart device separately with its own app can quickly become cumbersome and unmanageable as one adds-up ten smart products or more. The solution is offerred in the form of a hub box to which one can connect several devices and appliances at home, wired and wirelessly, and command them with the aid of a computer or mobile application that communicates with the hub box. Such hubs are available from several companies (e.g., Revolv, SmartThings, Wink). Multiple problems reportedly soon surface: the number of devices a hub box may control is often small (e.g., five devices), the connections have to be wired, and the hubs utilise different communication protocols (e.g., ZigBee, Z-Wave, Wi-Fi) that do not communicate well with each other. Additionally, products are made to work best with a particular protocol and hub, often mandated by a business co-operation between companies (e.g., General Electric and Wink). Also, some devices (e.g., Philips’ smart lighting bulbs Hub) may need their own control unit to be connected to a hub box. Thus, operating several appliances and devices, that work with different communication technologies, is likely to require a number of hub boxes, each managed separately, with all their wired or wirless connections. The picture clearly emerging is that making all necessary connections and setting up the hub applications is not a practical task for a common homeowner with an average computer technical competence or literacy.                      

Two key types of target segments are often suggested. First, those savvy in technical matters of electronics, computers and networks, who frequently also work in these areas, are attracted to and capable of setting a smart network at their home on their own. But another segment of affluent consumers is also argued for, who can afford more extensive smart home projects and hire technical professionals to set them up. The more comprehenive and expensive systems of smart homes are installed during the construction of new houses. It of course helps when the homeowner understands about these things and can plan and supervise the project. The online guide HowStuffWorks.com recommends in its section on smart homes that when looking for a qualified technician, a homeowner should check for a combined certification (CEA-CompTIA) from the Consumer Electronics Association and the Computer Technology Indusrty Association; this certificate indicates that the technician has proficiency in installing, maintaining and troubleshooting a smart networking equipment.

There are obviously different scales of smart networks that can be built for the home. The real-estate portal of MSN by Microsoft describes a range of smart home projects. The simplest network can be managed with iPhone apps and includes a few devices like outdoors lights, burglar alarm, electronic door lock and a thermostat; it would cost $2,500. A more serious network may incorporate more lighting zones, video cameras for a security system, and swimming pool controls, all run through a hub box and a smartphone central app; cost: $11,000. The more advanced networks connect and command more lighting, video and audio zones, security and air-condition thermostats in the house; these projects cost their owners $133,000, $300,000 and up to $1.8 million (that upper-end system includes among other things a home theatre, 21 climate zones, 17 audio and 13 video zones, pool and lighting controls, and a baby-monitoring unit).

A simple small scale network may add some fun and comfort to the home, but it may be just nice-to-have and not a real smart home — is it worth the set-up cost and maintenance trouble later? The more comprehensive and expensive systems above $100,000 can be extravagant luxuries. It appears that a smart network of substance and practical value would require an investment of several tens of thousands of dollars.The examples given by MSN miss the inclusion of essential products like smart electric appliances — this is the area where, according to some experts, the real potential and future practical value of smart homes lies.

The entry of some of the larger global companies in consumer electronics, computer and information networks, perhaps provides the strongest indication of the potential and value they see in the future of smart homes. Companies like General Electric and Samsung Electronics develop appliances such as refrigerators, washing machines, dish washers and ovens that can be controlled from distance, provide useful information (e.g., milk shortage in the refrigerator), and not least allow more efficient energy usage. Some appliances are just ready for marketing. Samsung also works on the networking equipment and joining applications of their make. Google, which is getting deeper into the domain of Internet of Things, acquired Nest, a company that developed a unique smart thermostat, for $3.2b in January 2014; it now relies on the founder Tony Fadell to develop similar capabilities with other products. The thermostat of Nest does not need to be programmed by residents of the house because it learns their behaviour. More recently Google acquired Dropcam for its web-enabled security camera (1). Apple took the challenge from its rivals and introduced about two months ago its software platform HomeKit for developing apps that can operate home appliances from their mobile devices (iPod, iPhone, iPad). It is an unusual move for Apple to accommodate equipment of other companies. On the other hand, manufacturers of the smart appliances become concerned that Apple will draw from them control of their own products through the apps of HomeKit. Apple intends its TV to be the future hub for its smart home network (2).

Simson Garfinkel of MIT Technology Review addresses the more urging technological issues that still need to be resolved for smart devices to be reliable and usable: secured Wi-Fi network; reliable and seamless connectivity; control and authorization (e.g., routing via e-mail account); and compatibility between devices or home appliances. Garfinkel also notes some of the absurdities that may arise (e.g., family conflicts on ownership and access to the e-mail account, failures in Wi-Fi connectivity and bugs that may cause loss of control of the front door lock or air-conditioning, a breach of security may be exploited by thieves or just malicious hackers for messing with the home). Technical system failures and interference in normal functioning of devices due to viruses and other malware attacks are of the more serious problems, similar to concerns raised with regard to driverless cars. But equally concerning are issues of privacy and data protection: apps that collect data on the smart home network or devices for their operation actually store it in the ‘cloud’ on their servers. Would people want information on their private daily behaviour to be accessible in the cloud to unauthorised strangers? And will that information not be used for marketing purposes of the service provider and third-party companies? Worries of this kind are directed particularly towards Google due to its advertising policy and related practices.

There are some additional implications of living at smart homes on behaviour that warrant attention. Smart technologies could induce consumers to be more lazy and less attentive or agile, reducing their alertedness to changes or events in their surroundings. And while consumers may need reminders, could exempting them from remembering to perform routine tasks weaken their memory performance? Will replacing ordinary routines with automatic operations truly improve the quality of life of people? Yet, smart systems can fulfil a positive role in watching from distance over little children on one hand or the elderly on the other hand. It is suggested that a smart nursery system can help to remind the elders to take their medicines, or alert their family relatives if electric devices are left working unattended, and furthermore in the case of accidents in the house.

Smart homes are increasingly tied with energy saving and efficient utilisation of renewable or green energy sources (wind, water, sun). This may prove as a most significant motivation for setting-up smart homes in private houses and community housing projects. A special section of Time Magazine was dedicated in July (2014) to developments and progress in the field of smart homes — nearly half of it was related to environmental and energy aspects (3). Relevant aspects we may find in this context include the structure and design of houses with emphasis on materials and insulation; simple but resource-efficient housing units (e.g., floating houses); smart distribution of electric power across different souces (e.g., public grid and private solar panels); use of smart meters and moderating electricity consumption by home appliances. In late 2013 Panasonic has taken a dramatic move — cutting back on much of its activity in consumer electronics, where it gained its global fame, and shifting to construction of houses with environment-friendly technologies. They started with technologies like solar power systems, LED lighting, and sensors for reducing energy consumption that can be integrated as part of smart home systems (4). While their clients now are more industrial or commercial, their end-users remain the consumers, and they may well return to offer smart and energy-efficient appliances in the future.

However, consumers may not consider energy saving as a key or sufficient reason for using smart appliances. A key driver for consumers to adopt smart home technologies is currently concerned with home security, protecting residents and property. Gaining energy efficiency through smart technology requires greater awareness and willingness of consumers to change their behaviour respectively. Factors that would persuade consumers to accept appliances that use electric energy in a smart way are financial gains and assurances about reliability and security (e.g., when leaving the washing machine working in absence), signalling the technology is mature. Using a “green” appliance could make them feel good that they are helping the environment but it is regarded as a “side-effect”. Putting consumers on track may start with providing them detailed information made available from smart meters about actual electricity consumption of specific appliances and devices during different times of day; the information may be displayed on a screen in the kitchen, a personal computer or tablet, easily accessible to the home residents (5).   

Setting-up a smart home requires a strategy. It is easy to drift with numerous gadgets in the market, which can be amusing and fun. However, a smart home is not meant to be just a game. It may affect the lifestyle and quality of life of its residents in various and important ways. One may take into consideration benefits like security, entertainment, convenience and energy efficiency. Fortunately, there is plenty of time into the future for consumers to figure out what they want to achieve from smart homes.

Ron Ventura, Ph.D. (Marketing)

Notes:

1. “Home Smart Home”, Time Magazine Special Issue: Section on Smart Homes, 7 July / 14 July 2014, 184 (1).

2. “Apple Seeks to Open the Door to Simplified Smart Homes”, Tim Bradshaw, FT.com (Financial Times Online), 27 May 2014. http://www.ft.com/intl/cms/s/0/4c454faa-e577-11e3-8b90-00144feabdc0.html?siteedition=uk#axzz38NvfWo3u

3. Ibid. 1.

4. “The Reinvention of Panasonic”, Eric Pfanner, International New-York Times, 28-29 December 2013.

5. “Get Smart! Consumer Acceptance and Restrictions of Smart Domestic Appliances in Sustainable Energy Systems”. Wilma Mert and Wikbe Tritthart, 2008, Inter-University Research Centre for Technology, Work and Culture, Graz, Austria. http://www.uni-muenster.de/imperia/md/content/transpose/publikationen/mert.pdf  (Also see website of the Smart-A project); “Will Smart Home Technology Make Consumers More Energy Efficient”, Martin LaMonica, The Guardian (Online), 22 January 2014.

http://www.theguardian.com/sustainable-business/smart-home-technology-energy-nest-automation

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Questions, questions, and more questions — as a survey interview goes on questions start to sound or look too much alike. The respondent may gradually pay less attention to the next question and its response options, replying more automatically and less reliably. If the respondent is truly fed up she may quit before the end of the questionnaire — abandoning a survey is even easier in self-administered online surveys than hanging up on an interviewer in a phone survey. It is a key problem researchers in marketing and other fields of social sciences are grappling with in the past decade, next to the non-response problem (i.e., whereby individuals included in the original sample don’t even get to start the questionnaire).

Researchers are struggling to return somehow to the days (1960s to 1980s) when surveys in many countries were still something new and intriguing, a unique and attractive channel for people to voice their opinions, preferences and attitudes. But since then surveys have become far more frequent, and many consumers have become more experienced answering them. This is an advantage when a respondent is more familiar with a type of question and understands better its logic to give a correct, candid or reliable answer. It is a clear disadvantage if the respondent loses interest in survey questions because they seem too familiar and predictable, whereof he or she may not read questions fully, may give answers haphazardly, and sometimes may try to outsmart the question. New media channels may also be perceived now as more attractive for consumers wherein to express their views. Truly, researchers have been concerned by this issue for many years and have always worked on devising techniques to increase respondents’ interest and engagement through the process of completing a survey in different modes. But the approach of “gamification” imported into marketing research lately provokes controversy and doubts: How far should researchers go in their effort to make surveys more likeable, appealling or entertaining to consumers-respondents?

The concept of “gamification” means the introduction of custom features or characteristics of games into survey questionnaires, applying particularly to self-administered questionnaires on the Internet. Deterding and his colleagues define “gamification” as the “use of game design elements in non-game contexts” (1), as in the contexts of advertising and research. The technology-driven inspiration for this approach comes from video games, as directly addressed by Deterding et al., yet gamification borrows its elements also from the broader framework of games. Gaming in general is different from playing, by setting goals to achieve and rules to follow, and creating a competitive challenge for the players.

The game elements to be utilised can range from interactive graphic features, scenarios and scenes, objectives and rewards, to explicit rules that have to be followed. However, a gamified application (e.g., survey question or task) adopts only a subset of design elements shared by games, that makes the applications look and feel like a game but is usually not a full-fledged game (2). The problem starts with ambiguity about the choice of elements to be imported into survey research and how to implement them. It is a concept still in formation and researchers appear to give it different interpretations:

  • Using interactive visual response options and features for a playful design (rather than gameful);
  • Creating scenarios (story-like) that set a more interesting and realistic context in which respondents should answer the actual question;
  • Formulating questions as problems or challenges using the logic of games;
  • Designing a questionnaire  in a set-up that mimics a video game (e.g., the respondent chooses a personal avatar, screens appear like scenes from an adventure game, awards like bonus points are given as the respondent progresses through the questionnaire).

In the first option, playful features include for instance sliders instead of standard  scales (i.e., ticking circles), animation, and drag-and-drop response items (e.g., for ranking or sorting them into categories). While such features may resemble isolated interactive elements that appear in video games, they lack other fundamental components of a game. In the second and third options we may find more game logic without the visual appearance of a video game (perhaps evoking instead ‘visualization’ by the respondent). Using an alternative terminology in the field of gaming, some of the methods employ more ‘game mechanism’ while others emphasise more ‘game thinking’. Which of these aspects is more relevant and important with respect to research? And how closely should we stick to the ‘video game’ as a reference for gamification? The fourth option for implementation of gamification appears much less compatible with the objectives of marketing research projects than the preceding options . The methods that use scenarios, game-like problems and ‘playful’ interactive response tools exhibit potential to improve (online) surveys but their planning and implementation need to be carefully considered and thought-out because of the ways in which they may alter the context, meaning, and scale of measurement of responses.

In order to illustrate benefits to be gained vs. pitfalls at risk when ‘gamifying’ survey questions, I refer to an instructive award-winning research paper by Rintoul and Puleston (3). They tested the effects of ‘gamified’ question formats against standard formats in an online survey, while comparing response patterns between Western countries (US, Australia) and Asian countries (China, India, Japan, Korea, and Singapore). Let us consider just two examples here:

  • When examining what olympic sport events people like to watch, a standard question asks “What are your favourite Olympic events?” But respondents may be requested to imagine a scenario in which they play a more important role that induces them to be more engaged in choosing sport events: “Imagine you were in charge of the TV coverage of the London 2012 Olympics and they broadcast only the events You liked to watch, can you draw a list of all the events you would show on TV?” Australians listed in the scenario version more than double the number of events on average than in the standard version (6.8 versus 3.3). Large lifts were also found in Asian countries where the “base” number of events was the smallest (e.g., China: from 2 to 8 events). The scenario proposed in this study seems legitimate as it merely adds some flare of interest in a situation that is not truly likely to happen in reality. There is the danger, however, that when the scenario is too peculiar or defines a condition too specific the researcher would no longer be safe to infer the validity of those consumer responses in other conditions. (Note: Scenarios opening with keywords like “suppose” and “imagine” have been used in surveys before the age of ‘gamification’, for instance in conjoint studies).
  • Rintoul and Puleston test a ‘gamified’ scale with a ‘smooth’ slider in two visual versions: one version used just the slider, the other version included an additional animated feature, a person figure that changes his posture according to the position of the ‘slider’ handle on the scale — the person rises and applauds when the highest level is chosen on one end to that person remaining seated leaning backwards ‘asleep’ when the lowest level is chosen on the other end. The researchers show that the animated version reduces differences in response patterns between countries. The concern is that respondents would be affected by animation, trying to experiment with the figure or ‘please’ it. In this study the ‘applauding person’ did not lead to higher frequency of the top-level; yet, conspicuously, more responses in the US and Australia were attracted by the person ‘asleep’ at the low end of the scale than in the simple version. (Note: The ‘rating’ scale did not show numeric levels.)

To the credit of Rintoul and Puleston, their approach is well-reasoned, moderate in its application of ‘gamified’ elements, and realistic. But as advocates of ‘gamification’ techniques they tend to play down the potential problems with those techniques. Some of their visual instruments seem to alter the type of scale or mix between measurement scales where the properties of those new instruments are not properly understood (e.g., sorting items into Likert-type categories, the “water tap” scale, rating scales using faces and text with no numeric levels). A critical question should be raised with regard to every gamified feature: how relevant is it to the mental construct, behaviour, or decision situation studied (e.g., a scenario, a time constraint instructsing “answer within 2 minutes”); at the very least it should not conflict with the focal construct. There is also concern whether additional items chosen when using pictorial images truly reflect respondents’ preferences or interests or were they chosen just as part of the ‘game’? Utilisation of ‘gaming’ features in an artificial way and of little relevance to the original issue studied can seriously hurt the attainment of the research objectives.

Another study that compared four conditions of design format found just modest support for the application of gamifying elements (4). The formats tested were text-only, decoratively visual (DV) , functionally visual (FV, i.e., interactive visual features), and gamified questionnaire. The researchers, Downes-Le Guin and colleagues, address the argument that sliders and other visual features help to combat the problem of ‘straightlining’ in Likert-type scales by increasing response variation between items (an issue addressed also by Rintoul and Puleston). They found limited support for such improvement in the FV condition and none in the DV condition. The FV and gamified designs showed some benefits in increasing enjoyment and interest but no improvement in data quality. The gamified version adds in fact a kind of back-stage view from a game-video to a question display similar to FV. Even when some gaming features like choice of avatar are added, it still functions not substantially more than as a stage decoration while bearing no relevance to the content of questions. It cannot be too surprising that this design has demonstrated little effectiveness.

If researchers wish to introduce characteristics of games right into the content of questions, they may borrow concepts from the fields of game theory, decision making, particularly through the prism of behavioural economics, and simulations. These areas have aspects that are particularly relevant to marketing (competition) and consumer behaviour which can be used to make questions more interesting, intriguing (e.g., as a puzzle), relating more closely to realistic market situations, and being of greater self-relevance (e.g., by quoting or bidding prices for products). There are also limitations to this line of questioning. Questions posed as game-like problems are usually more difficult to comprehend and answer, and take more time to do so. In addition, problems presented in experiments of behavioural economics often reveal biases in judgement that need to be addressed or accounted for. Therefore, the level of sophistication has to be balanced against the ability and willingness of respondents to “solve” the problem-questions.

This course of “gamified” research should have more reason to look for examples and ideas in the domain of “serious games” (e.g., applied in training and education) than video games for fun and entertainment. There are important areas of marketing research where advanced models and techniques of gamification can indeed contribute such as: (1) studying reactions to scenarios of customer experiences in service delivery, or (2) simulation of shopping trips in stores and malls.

Introducing gamified elements and techniques to marketing survey questionnaires can help to improve respondent behaviour, receiving a more favourable attitude towards the survey and smoothing their progress through the questionnaire. The benefits, however, are not clear-cut and are subject to much debate. The contribution of gamification depends greatly on how it is implemented — not all interpretations are welcome from a research perspective. There is justified concern that an entertainment-driven approach will lead to superficial game-like applications that only distract consumers-respondents from answering questionnaires accurately and sincerely. From playful interactive features to more advanced mechanisms like scenarios and problems with game-logic that also encourage more thinking, it is important to keep the gamified design sensibly relevant and related to the domain of the question.

May you all my readers have a Joyful and Successful New Year 2013

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “From Game Design Elements to Gamefulness: Defining Gamification”; Sebastian Deterding, Dan Dixon, Rilla Khaled, & Lennart Nacke, 2011; Conference Proceeding MindTrek ’11 (ACM)http://85.214.46.140/niklas/bach/MindTrek_Gamification_PrinterReady_110806_SDE_accepted_LEN_changes_1.pdf

(2)  Ibid. 1

(3) “Beyond Colour and Movement: Measuring the Impact of Dynamic Answer Formats on Respondent Behaviour”; Duncan Rintoul and Jon Puleston, 2012; AMSRS Conference (Australian Marketing and Social Research Society) [See another paper related to this research presented at ESOMAR Asia ’12 Conference). http://iibsor.uow.edu.au/consulting/UOW109801.html (Step down the page of Rintoul to “Downloads”) / See also an article with more examples by Deborah Sleep, “Improving Online Market Research through Gamification”, The Guardian: Media Network blog, posted 15 Aug., 2012  http://www.guardian.co.uk/media-network/media-network-blog/2012/aug/15/online-market-research-gamification

 (4) “Myths and Realities of Respondent Engagement in Online Surveys”; Theo Downes-Le Guin, Reg Baker, Joannne Menchling, & Eric Ruylea, 2012, International Journal of Market Research, 54 (5), pp. 1-21 http://www.marketstrategies.com/user_area/content_media/Online_Survey_Engagement.pdf

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That the music retail industry is in trouble is no secret. When we look, however, at what happened to major music store chains over the last five years it may become much clearer how serious the crisis is. Here are some highlights:

  • In 2007 Richard Branson decided time was up for Virgin‘s music Megastores and sold his chain of 125 stores in the UK and Ireland in a management-buy-out to a team of executives. The new retail brand Zavvi took place of the Virgin name that after thirty years vanished from High Street in the UK, particularly its famous flagships on Oxford Street and in Piccadilly Circus in London. By 2009 Virgin closed the last of its stores in the US. Stores in other countries were also closed while a few stores may still be found under the Virgin brand  in France, Greece, and in the Middle East. 
  • Zavvi survived no more than a year. It was dependent on a unit of Woolworths (Entertainment UK) as its primary supplier and with the collapse of the veteran retail chain, Zavvi ran into serious difficulties, forced into unfavourable new trade agreements. It entered administration in late November 2008 and within 3 months the chain ceased to exist. 14 of its stores were sold to HMV, 7 others and all stock sold to Head Entertainment, and all remaining stores were liquidated.
  • The once giant American music retailer Tower Records got into troubles already in 2004 when it sought bankruptcy protection and was doomed just two years later in 2006. Great American Group that bought the retailer in an auction soon declared its plan to shut down the music retail chain. All US stores were closed by the end of 2007 and in the following three years many stores overseas were sold or closed down. The stores in the UK closed in fact already in 2003 (Virgin took over its flagship in Piccadilly Circus but as noted above it did not last long).
  •  And now we hear that HMV is in trouble and struggling to keep its head above water. It is threatened by an increasing debt and a difficulty in keeping with terms of a bank loan. To be accurate, it is since January that news of troubles at HMV have been coming in about unsatisfactory sales results over the holidays shopping period and three consecutive warnings of dropping profits. First it announced plans for the UK and Ireland to close 40 music stores along with 20 book stores of Waterstone’s that HMV Group apparently also owns. Then it became known HMV intends to split Watesone’s from its core business in music, video, and games ; this prospect sale is still in negotiations. Analysts predict that break up is inevitable but still express concern that this will not be enough and HMV will be forced to close more stores to avoid administration.  

Explanations given by analysts for these misfortunes are probably not surprising many: the growing shift of consumers to digital download of music, video and games, and the tight competition from stores like supermarkets that sell discs at low-cost. While retailers started offering their merchandise online on their websites several years ago they were quite unprepared for the trend of digital download.

As implied above the problem is centered on but not limited to music. More than ten years ago music chain stores have actually transformed into entertainment media stores in order to expand their business and not be reliant only on music. Yet, the retailers could not cope with the fast technological developments in this field during the years 2000s that altered consumer behaviour patterns. This is not just about low price but also convenience, flexibility of choice and immediacy. True, especially in the early Internet years but even nowadays items can be obtained for free on the net and this phenomenon poses problems for many in the industry, perhaps mostly to the artists. This issue is complex with legal ramifications beyond the scope of this article-post. However, the whole field encompassing the different types of entertainment media has progressed considerably and broadened in the past five years and it would be too simplistic to attribute it squarely to price.

Music stores should not be given up too quickly. There are certain things about the stores — the sights of loaded stands of products, colours and sounds, movement on the floor and buzz — that the Internet and various electronic devices cannot provide. Many private stores, small or niche stores, may still remain but the chain stores were the real engine of this retail industry. It is worth investing much more effort to create a new model for music or entertainment media stores that will retain some of their more traditional virtues in new forms and yet offer new benefits. I suggest two dimensions for development in which strong advantages can be created: personal customization and social interaction. These can be sources for strong shopping values and enjoyment.

Personal Customization

Consumers want to choose more freely their favourite songs and create their own song compilations. They are much less willing to wait for record companies to produce albums and compilations based on their judgements. Consumers are less tolerant towards albums that contain 2-4 really good songs and 8-10 mediocre ones. The choice has to be delegated more extensively to the consumers. This phenomenon is becoming stronger and wider.

Perhaps as some analysts claim there is less justification for the large space of stores we have known so far. Stores may restructure and re-allocate floor space between product displays and personal self-service stations. A shopper will be invited to sit on a stool in front of a flat screen at his eye-level and use a multimedia programme to search and scan the store’s wide selection of music pieces as well as films, TV series episodes or games and choose whatever he or she likes. When the shopper completes, for example, to create a song compilation to his/her taste, an instruction will be given to the computer system to burn it on a CD, DVD, Blue-Ray disc or alternatively be saved on some other memory device such as Disk-on-Key. Appropriate payment arrangements may be devised including advance deposits and pay-as-you-collect at the cashier or pay with credit card at the station. Sessions may be limited in time.

Why doing this at the store and not at home? First, it may be because of powerful utilities of the multimedia programme that makes the shopping experience smoother and more enjoyable — well-designed graphic displays of items planned with consumer search behaviour in mind and friendly tools for building and displaying at any time the content of the shopper’s basket. The display may incorporate information structures such as a matrix or table of a relatively large variety of items , a “ribbon” mounted across the screen (moved left and right) for quick scan in a narrowed-down set of items, or “wheels” that include possibly artists in an inner tier and song pieces in an outer tier. Second, the programme may allow playing songs or showing short samples from film in live-streaming directly from the store’s library (if the system works on an Intranet it may work faster than on the Internet). Third, when required the shopper may consult with a personnel adviser, assuming hopefully that the store employs people expert in various genres of entertainment.

It should be remembered, however, that there are different types of shoppers. We may distinguish primarily between (a) those who come with a more clear and well-defined plan of specific songs, artists, TV programmes etc. that they wish to find and buy, and (b) “explorers” who have a more general idea, perhaps only at the level of a style or genre, of what they want and whom in the “old days” liked to browse through items on display with their fingers. For consumers who do not have well established preferences and who even seek surprising discoveries the old format was simpler and easier to explore and probably less time-consuming compared with a computer application. A multimedia programme with a search engine may be less advantageous for them. In order not to lose those customers the store will have to devise more creative solutions, combining intelligent computer-based cues and guiding tools, physical displays even if more limited than before, and human advice.

Notwithstanding, there are types of music pieces and areas in which it should be sensible to offer physical copies on display. For instance stores can continue to offer films, live concerts,  TV series by season, and games as ready-made products. In addition, areas like jazz and classical music should still deserve special rooms with most space allocated to displays of physical items to accommodate usually more conservative habits of amateurs of these types of music.

Social Interaction

Consumers of entertainment of sorts, especially younger ones (say under 30), prefer to sit in front of the computer at the comfort of their homes, sometimes for hours, surf the network for various music and video pieces. They also like to download pieces onto portable devices such as MP3 players, smartphones and tablet computers. But they do not truly perform this activity all alone. Conspicuously as they sit on their own with the computer they often communicate with friends and relatives, consulting and change ideas or recommendations talking on the phone or chatting in social media communities.

So why not offer these consumers a more lively social way to interact with friends face-to-face  in a store? For that purpose, special sitting sets for 2-4 people can be installed in special areas of the store (not to disturb other customers). At the set a small group of customers-friends can sit together, use each his or her multimedia application to explore and examine favourite pieces while from time to time conversing with each other on their findings. This setting offers people a more natural, direct and open way of socializing, and it has a good chance of producing richer shopping baskets.

These are two directions for developing a new model for music or entertainment media stores that I conceive as promising from a consumer perspective. More generally and beyond the proposed directions, stores will have to create benefits that enrich the whole experience of shoppers during their visit and that the Internet and personal electronic devices (i.e., for online sales and digital download) cannot in their capacity replace (e.g., contact with expert staff, events, sensual stimuli in the store’s scene).  For stores’ owners and managers, the goal is clearly to convert shoppers into happy customers who enjoy returning frequently to the store(s).

Ron Ventura, Ph.D. (Marketing)

Media Sources:

“Branson sells Virgin Music Stores”, BBC News, 17 Sept., 2007

“Zavvi placed into administration”, BBC News, 24 Dec. 2008

“Tower Records victim of iPod era”, Associated Press at MSN Money, 10 Oct. 2006

“HMV prepares for split to stem rising debt“, Financial Times FT.com, 28 March 2011

“HMV in its third profit warning of this year”, The Guardian (online), 5 Apr. 2011

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