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Marketing and consumer researchers have long been interested in revealing and describing differences in the behaviour of consumers that arise from differences in culture between societies, nations and communities. Ignoring such differences can lead companies to making embarrassing and costly mistakes in international marketing. Culture sets ideas, values, norms, symbols and customs that influence and shape the thoughts, beliefs and actions of the people adhering to it; in particular, responses to marketing-oriented stimuli — products, advertising messages, websites, stores etc. — can vary specifically due to cross-cultural differences.

Kastanakis and Voyer (2014 [1]) propose that investigation of the effects of cross-cultural differences on consumer behaviour should look deeper into pre-behavioural processes, namely perception and cognition. Culture conditions perception and cognition, thus affecting how consumers perceive and understand stimuli, which consequently drive behaviour. Consumers develop perceptions and thoughts from the input of stimuli they attend to, but top-down processes set by pre-defined mind-sets, goals and beliefs (e.g., guided by culture) may inversely shape how consumers perceive, interpret and think of the information received from their environment. The researchers review ways in which culture influences perception and cognition in different functions or contexts. Similar to the greater part of research on cross-cultural differences, Kastanakis and Voyer concentrate on differences between Western cultures (individualist, espousing independence) and Eastern [Asian] cultures (collectivist, espousing interdependence).

Western cultures encourage people to see themselves by themselves, that is, developing an independent construal of one’s self-image; Eastern cultures on the other hand encourage people to see themselves as part of a group, that is, developing an interdependent self-construal. Thus, Easterners are predisposed to construe their self-image based on their relations with and similarities to others in a group of affiliation, compared with Westerners who view themselves as individuals independent from others, emphasising their unique traits. The tendency of Easterners to perceive and judge an individual person relative to surrounding others is demonstrated in this example cited by Kastanakis and Voyer: American and Japanese research participants were asked to judge the emotion of a central figure based on his or her facial expression when surrounded by other person figures showing the same or different expressions — “The findings indicate that the surrounding people’s emotions influenced Japanese perceptions but not Americans’ perceptions of the central person’s feelings.” [Based on research by Masuda, Ellsworth and others, 2008.] Contextual information (e.g., feelings of others) seems to matter for judgements in the East more than in the West.

In another implication of the independent-interdependent cleavage, whereas Westerners are mainly focused on achieving their personal goals, Easterners are looking more to help advance goals of the group they belong to, catering to others’ needs or wishes.  The authors suggest as a possible consequence that “Westerners perhaps tend to join groups to serve their own needs, whereas in collectivist societies, people serve the groups to which they belong”. This difference in approach may affect, for example, the way users of social media in North America and Europe participate and interact in these networks, differently from users in Asia (e.g., South Korea, Japan, China). It has been repeatedly argued that social media networks have not helped people in the West to socialise any better, perhaps even to the opposite, and that users engaged in social media may still feel in solitary. A similar discussion may concern also the use of digital platforms in the rising ‘sharing economy’ (e.g., Airbnb, Uber, LendingClub). Gaining true benefits from socialising and sharing platforms is based on collaboration, contributing to others or at least reciprocating helpful actions by others, not quite in line with values and norms taught by the individualist culture of the West (e.g., promoting competition and personal achievement).

The contrast between independence and interdependence further finds an expression in a respective distinction between thinking styles: analytic vs. holistic. Analytic thinking, associated with an individualist culture, is more focused on single objects and the attributes of each; holistic thinking, associated with a collectivist culture, is more attentive to the context or field in which any object is found. Thereby, Westerners following an analytic perspective would be more inclined to observe and judge objects in isolation, whereas Easterners (Asians) following a holistic perspective tend to consider the relations between objects observed and make judgements based on the context of a whole scene. This distinction can have important implications for the perception and evaluation of visual scenes. For instance, a Westerner would focus on a particular exhibit or display of products in a store (e.g., a dressed mannequin) while an Easterner would see the same display against the background of other in-store displays and interior decorations of the store. In front of a shelf display, an Easterner viewing it holistically would be more attentive to the collection of products on display compared with an ‘analytic’ Westerner focusing on each product at a time (note: such a difference may also be applicable to a screen display of products on a webpage).

The difference in perspective is applicable also in viewing photographs of scenes, not just when being physically present on-site. Easterners more accustomed to a holistic view would be more capable at capturing the gist of a photographed scene as it relies on perceiving relations between multiple figures and objects in the scene. Westerners following an analytic perspective, on the other hand, would be more capable at noticing the attributes of particular objects. It should be noted, therefore, that while people in the collectivist East may have the advantage of identifying relations better, people in the individualist West may have the advantage of observing object details better (i.e., could be judging single objects with greater scrutiny). It furthermore appears that people match their aesthetic preferences to their culture-orientated perspective. Kastanakis and Voyer give an example wherein Eastern portrait paintings or photographs “tend to diminish both the size and the salience of the central figure and emphasize the field”.  Such differences in perspective and thinking style should be considered, as the authors advise, in the aesthetic design of advertising materials and other communications as well as in retail sites.

Stronger relational processing has relevance to attributes, and moreover to a perceived relationship between price and physical product attributes used as intrinsic cues for quality. Lalwani and Shavitt (2013) provided ground support for the association between modes of self-construal — independent vs. interdependent — and reliance on a perceived price-quality relationship. The way people look upon their own self-concept vis-à-vis their relation to others radiates to their perceptions and processing of relations between price and quality attributes. Importantly, however, they show that the linkage is mediated by the distinction between analytic and holistic thinking styles. Interdependent (collectivist-oriented) consumers are more capable at processing price-quality relations, where holistic thinking in particular positively predicts greater reliance on such relationships [2].

In addition to visual processing and aesthetics, culture is known to affect perception, processing and preferences of smell and sound. Consumers may be biased to better recognise smells familiar to them in their culture or to better comprehend culturally familiar melodies. The bias occurs, as said by Kastanakis and Voyer, during recall and recognition before the information even enters the attitude formation, judgement, and decision making processes. Consider thereby the mixtures of styles and forms one would find in a country that absorbs immigrants originating from cultures different from each other or from the culture incumbent in the receiving country, for example in music and food. As people borrow from the traditions of communities of other cultural origins and adopt also from those typical locally, they get exposed to and experience mixtures of music melodies or food flavours. Yet, even with years passing certain things do not change — consumers may continue to feel more secure and comfortable with the familiar music genres and food styles they were raised on at home, associated with a given culture.

  • Kastankis and Voyer note a lack in cross-cultural research on taste perceptions; that is unfortunate because food is such a significant domain, but the smell of food may still have a cultural impact on consumers’ reactions.

Furthermore, the language one speaks can determine the perspective, individualist or collectivist, one applies. Immigrants, for instance, may change how they present themselves depending on the language they use: that of their origin or the one adopted in their current country of residence. The language carries the values and norms of a culture it is associated with, such as how people perceive themselves. For example, bi-cultural Chinese-born people refer to their own internal traits and attributes to describe themselves in English but describe themselves in relation to others when using Chinese. Kastanakis and Voyer argue that language is not emphasised enough as an aspect of culture: “language triggers a culture-bound representation of the self”.


Idiocentrism and Allocentrism are views held by people at the individual level in parallel to the individualist and collectivist cultural views of societies, respectively. This reference to individual-level culturally oriented views becomes particularly prominent when the personal view does not match the societal-level view dominant in one’s country of residence: for example, when people of Asian origin living in the United States, a country with an individualist culture, personally maintain an allocentric view.

Dutta-Bergman and Wells (2003) found some interesting differences in values held and lifestyles practised by idiocentrics and allocentrics living in the American individualist culture. For example, idiocentrics are likely to be more satisfied with their financial situation and optimistic than allocentrics; idiocentrics are also more disposed to be workaholic, yet are more innovative. Allocentrics are more likely to be health conscious; additionally, they are more inclined to invest in food preparation and other chores at home and to engage in group socialising than idiocentrics [3]. (Note: Idiocentrism and Allocentrism are approached as individual-level dispositions adopted by people; they are not necessarily contingent on any immigration status or country-of-origin.)


 

The differences between individualist and collectivist cultures may influence human cognition in several more ways explained by Kastanakis and Voyer. Key areas involve self- versus others-related cognitions, self-esteem, and information processing. Briefly mentioning some noteworthy implications: (1) People in Western cultures have a stronger tendency to make dispositional attributions for behaviour (e.g., to one’s personal traits or competencies) and discard situational factors, as opposed to Easterners; (2) Causal reasoning in Eastern cultures tends to give greater consideration to interactions between personal (dispositional) factors and situational or contextual factors than in Western cultures; (3) In Western cultures people will prefer to classify products based on typical functional or physical attributes of categories (i.e., rule-based classification) whereas in Eastern cultures people will rely more on family resemblance and relationships between products (i.e., relational classification); (4) In persuasion, Westerners (e.g., Americans) prefer to take side in conflicts while Easterners (e.g., Chinese) are persuaded more by compromise solutions and are more ready to deal with contradictions.

Readers are reminded additionally of the differences in processing of visual information already described earlier (i.e., between the Western object-focused analytic approach and the context-orientated holistic approach in the East). These differences may be well-connected with the approach consumers take in judging and classifying products visually displayed (e.g., physically in-store, virtually in print or screen images).

Three final comments to conclude: First, as always we have to be careful with generalisations made such as between ‘Western culture’ and ‘Eastern culture’. There are differences in elements of culture between countries associated more closely with either the individualist or collectivist streams of culture. There is furthermore variation among communities and sectors within countries, and some tendencies may also be considered as individual-level differences (e.g., holistic vs. analytic thinking). Second, there is need in the West to explore and deepen the understanding of other streams of culture (e.g., African, Middle Eastern, South American). Third, Kastankis and Voyer address changes in perspective and behaviour of people in Asian nations caused by their growing exposure to the Western individualist cultural orientation. However, a more salient phenomenon prevalent in recent decades seems to be the immigration of people originating from non-Western cultures coming to live in countries of the West. Especially in Europe, the extent of exchange in ideas, values and customs between people with Western-orientation (‘incumbents’) and non-Western cultural orientations (e.g., from Africa and the Middle East) should have great impact on the balance between cultures on the continent (as well as in the UK), and not least the kind of consumer culture that will prevail in future.

International marketers must keep fully aware of and account for the differences between Western individualist orientation and Eastern collectivist orientation, and more so their multiple facets of manifestation in perception and cognition. Particularly important is paying attention to the differing thinking styles (i.e., analytic vs. holistic thinking) for their possible implications in processing and responding, for example, to persuasive attempts in advertising in online and offline channels, store design and visual merchandising. Extending marketing plans or initiatives across seas and borders, without making consideration for these potential differences, may significantly diminish the effectiveness of the actions taken in new destination markets to the extent of proving utterly precarious.

Ron Ventura, Ph.D. (Marketing)

References:

[1] The Effect of Culture on Perception and Cognition: A Conceptual Framework; Minas N. Kastanakis and Benjamin G. Voyer, 2014; Journal of Business Research, 67 (4), pp. 425-433. (Accepted version is available at eprints.lse.ac.uk/50048/ on LSE Research Online website).

[2] You Get What You Pay For? Self-Construal Influences Price-Quality Judgments; Ashok K. Lalwani and Sharon Shavitt, 2013; Journal of Consumer Research, 40 (August), pp. 255-267 (DOI: 10.1086/670034).

[3] The Values and Lifestyles of Idiocentrics and Allocentrics in an Individualist Culture: A Descriptive Approach; Mohan J. Dutta-Bergman and William D. Wells, 2002; Journal of Consumer Psychology, 12 (3), pp. 231-242.

 

 

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Consumer purchases from Internet retailing websites continue to expand, and their share out of total retail sales increases. Yet there is no real reason to declare the demise of physical, bricks-and-mortar stores and shops any time soon. Online purchases from e-stores (including through apps) indeed pose a stressing challenge to many physical stores, but the latter still hold a solid and dominant majority share of retail sales. Nonetheless, owners of physical stores will have to make changes to their mission and approach to retailing in order to answer effectively and successfully to the challenges from electronic retailing (‘e-tailing’).

The share of sales revenues from online retailing varies across categories (e.g., from groceries to electronics) yet the share overall out of total retailing revenues still floats around 12%-15% on average; there is also important variation between countries. Tensions are high particularly because of the threat from overarching e-tailers such as Amazon and Alibaba who grew their businesses in the virtual online environment. However, retailers do not have to choose to be either in the physical domain or the virtual domain: Many large and even medium bricks-and-mortar retailers are already double-operating through their physical stores and the Internet and mobile channels. Moreover, the master of Western e-tailing Amazon is lurking into the physical world with the establishment of its Amazon Go food stores, its venture into physical bookstores in selected US locations, and notably the acquisition of the food retail chain Whole Foods — what better testimony of the recognition that physical stores are still in need. All these observations should tell us that: (1) The lines between physical and virtual (electronic) retailing are blurred and the domains are not exclusive of each other; (2) It is a matter of linking between the domains where one can operate as an extension of the other (and it does not depend on which is the domain of origin); and (3) The domains are linked primarily by importing technology powered with data into the physical store’s space.

Technology alone, however, is not enough to resolve the challenges facing physical stores. Focusing on technology is like harnessing the carriage before the horses. The true and crucial question is: What will consumers of the coming future be looking for in stores? This is important, because consumers, especially the younger generations born after 1980, still have interest in shopping in bricks-and-mortar stores but they could be looking for something different from past decades, moreover given the digital options available to them now. The answers will have to come through rethinking and modifying the mission and strategy set for physical stores. The direction that seems most compelling for the mission is to shift emphasis from the merchandise offered in a store to the kind of experience offered in the store. The strategy may involve reconsideration and new planning of: (a) the product variety and volume of merchandise made available in the store; (b) interior design and visual merchandising; (c) scope and quality of service; and (d) the technologies applied in the store, all tailored to the convenience and pleasure of the shoppers.

This article will focus primarily on aspects of design of stores, including  interior design and decoration, layout, and visual merchandising (i.e., visual display of products); together with additional sensory elements (e.g., lighting, music, texture, scent) they shape the atmosphere in the store or shop. Yet it should be noted that the four strategy components suggested above are tied and influence each other in creating the kind of experience a retailer desires the customers-shoppers to have while in-store.

Shopping experiences in a store rely essentially on the emotions the store invokes in the consumers-shoppers. Notwithstanding the sensorial and cognitive reactions of shoppers to the interior scene of the store, the positive and pleasant emotions the shoppers feel will most likely be those that motivate them to stay longer and choose more products to purchase (further desired behaviours may include recommendation to friends and posting photos from the store on social media). Prior and close enough to consumption itself, the personal shopping and purchasing experience may invoke a range of positive emotions such as joy, optimism, love (non-romantic), peacefulness, and surprise; of course there also are potential negative emotions that retailers would wish to reduce (e.g., anger, worry, sadness)[*].

The need for shift in emphasis in physical stores is well stated by Lara Marrero, a strategy director with Gensler, a British design firm: “It used to be a place where people bought stuff. Now it is a state where a person experiences a brand and its offerings”. Marrero, who is leading the area of global retail practice at the firm, predicts a future change in mentality of shoppers from ‘grab and go’ to ‘play and stay’ (“Retail 2018: Trends and Predictions”, Retail Focus, 15 December 2017). This predicted shift is still inconsistent with a current retail interpretation of linking the digital and physical domains through schemes of ‘click-and-collect’ online orders at a physical store. Additionally, consumers nowadays conduct more research online on products they are interested in before coming to a store: The question is if a retailer should satisfy with letting the consumer just ask for his or her preferred product at the store or encourage the consumer-shopper to engage and interact more in-store, whether with assistance from human staff or digital utilities, before making a purchase — the push may have to come first from the consumers. Marrero further notes the social function of stores: retail environments become a physical meeting point for consumers to share brand experiences. Retailers will have to allow sufficient space for this in the store.

In order to generate new forms of shopper experiences the setting of a store’s scene also has to change and adapt to the kind of experience one seeks to create. New styles and patterns of in-store design are revealed through photo images of retail design projects, and the stories the images accompany, on websites of design magazines (e.g., VMSD of the US, Retail Focus of the UK). They demonstrate changes in the designing approach to the interior environment of stores and shops.

A striking aspect in numerous design exemplars is the tendency to create more spacious store scenes. It does not necessarily mean that the area of stores is larger but that the store’s layout and furnishing are organised to make it feel more spacious,  for example by making it look lighter and allowing shoppers to move more easily around. Additionally, it implies ‘loading’ the store’s areas which are accessible to customers with less merchandise. First, merchandise would be displayed mostly on fixtures attached to walls around the perimeters of the store, but even then it should not look too crowded (i.e., in appreciation that oftentimes ‘less is more’ for consumers). Second, fewer desks and other display fixtures are positioned across the floor to leave enough room for shoppers to walk around conveniently (and possibly feel more ‘free’). In fashion stores, for instance, this would also apply to  ‘isles’ of demonstrated dressing displays. Third, desks should not be packed with merchandise, and furthermore, at least one desk should be left free from merchandise — leave enough surface for shoppers and sellers to present and look at merchandise and to converse about the options. In some cases, it may allow for the shoppers to socialise and consult among themselves around a desk at the store (e.g., inspired by Apple stores). Opportunities to socialise can be enhanced in larger stores  by allocating space for a coffee & wine bar, for instance, which may serve also sandwiches, patisseries and additional drinks. Stores would be designed to look and feel more pleasant and enjoyable for consumers-shoppers to hang around, contemplate their options and make purchase decisions.

  • Large stores that spread over multiple floors with facades turning outwards to the street may fix the facades with glass sheets, and in order not to block natural daylight from entering into the store they would place desks and mobile hangers or other low shelf fixtures along the windows.

Modissa Fashion Store set for Christmas

In the new-era store not all merchandise the store may offer to sell needs to be displayed in the ‘selling areas’ accessible to shoppers. Retailers may have to retreat from the decades long paradigm that everything on display is the inventory, and vice versa. It is worth considering: First, some merchandise can be displayed as video on screens, and thus also add to the ‘show’ in the store; Second, shoppers can use digital catalogues in the store to find items currently not on display — such items may still be available in stock on premises or they may be ordered within 24 hours. But furthermore, customers may be able to coordinate online or through an app with a store near them to see certain products at a set time; up-to-date analyses of page visits and sales on a retailer’s online store can tell what products are most popular, subsequently guaranteeing that the physical stores keep extra items of them in stock on premises.

Here are references to a few exemplars for illustration of actual store design projects published in design magazines’ websites:

Burberry, London — The flagship store of luxury fashion brand Burberry on Regent Street is highlighted for both the use of space in its design and the employment of digital technology in the store. A large open space atrium (of an older time theatre) occupies the centre of the store (four floors, 3000 sqm), impressive in how Burberry allowed to keep it. The digitally integrated store is commended for its fusion of a ‘digital world’ into its bricks-and-mortar environment: a large high-resolution screen plays video in the atrium, synchronised with a hundred digital screens around the store, some 160 iPads (e.g., for finding items on the catalogue that may not be on display), and RFID tags attached to garments (VMSD, 18 December 2012).

Hogan, Milano — The footwear ’boutique’ store (277 sqm in via Montenapoleone) is designed to reflect the brand, “luxury but accessible”. The store’s mission has been described as follows: “Hogan is a lifestyle brand, championing contemporary culture. The store therefore needed to be dynamic, working hard to adapt from retail space to live event or gallery space”. Characteristic of the store: tilted surfaces for display, lying on top of each other like fallen-down domino bricks; and an animated display of patterns by LED lighting behind frosted glass walls — they both reflect movement, the former just symbolically while the latter more dynamically, to “express the dynamism of the city”. The store of Hogan also fosters social activity around its host bar and customization bar (Retail Focus, 15 February 2018).

Black by Dixon’s, Birmingham (UK) — The technology retail concept aspires to make “the geeky more stylish and exciting”. Digital technology is “dressed” in fashionable design, aiming at the more sophisticated Apple-generation (distinctive in the images are the mannequins “sitting” on desks as props, and colour contrasts on a dark background). (VMSD, 24 May 2011.)

Stella McCartney, Old Bond Street, London — The re-established flagship store resides in an 18th century historic-listed building (four floors, 700 sqm). Products such as dresses and handbags are displayed (sampled) across the store in different halls. The design and lighting give a very loose feeling. Refreshingly, the ground floor features an exhibit of black limestones and “carefully selected rocks” from the family’s estate, a piece of nature in-store (Retail Focus, 14 June 2018).

Admittedly, some of the more distinctive and impressive design exemplars belong to up-scale and luxury stores, but they do give direction and ideas for creating different experiences in retail spaces, even if less lavishly. Furthermore, technology can enrich the store and add a dimension of activity in it. Yet it is part of the whole design plan, not necessarily its central pillar, if at all.

Installing digital technology in a store does not mean importing the Internet and e-store into the physical store. Features of digital technology can be employed in-store in a number of ways, and the use of an online catalogue is just one of them. There is no wisdom for the physical store in trying to mimic Internet websites or compete with them. It should find ways, instead, to implement digital technologies that best suit the store’s space and transform the experience of its visiting shoppers.

Moreover, the store owner should identify those aspects that are lacking in the virtual online store and leverage them in the bricks-and-mortar store (e.g., immediacy, non inter-mediated interaction with products, sensorial stimulations other than visual and audio, feeling fun or relaxed). Thereof, the store should borrow certain technological amenities that can help to link between the domains and make the experience in-store more familiar, convenient, interesting, entertaining or exciting. According to an opinion article in Retail Focus on “The Future of High Street” (Lyndsey Dennis, 25 April 2018): “To draw customers back to brick-and-mortar, [retailers] need to rethink how they use their physical space and store formats. The key is to give customers something they can’t get online, whether that’s information, entertainment, or service“. Advanced technologies such as Virtual reality (VR) and Augmented Reality (AR) are part of the repertoire that are increasingly introduced in high street stores [e.g., AR applied in the fitting rooms of Burberry’s store, triggered by the RFID tags].

Matt Alderton, writing in ArchDaily magazine of architecture and design (25 November 2015), details key technologies and how they are implemented in stores to create new possibilities and leverage shopper experiences. One group of technologies can provide vital data to retailers which in turn can be applied to interact with shoppers and return useful information to them (e.g., beacons, RFID tags, visual lighting communications). The second group includes display technologies that may be enriching with information and entertaining to shoppers: for example, VR and AR, touch screens, and media projected on a surface such as table-top which thus becomes a touch screen. Alderton clearly sees consumer need for physical stores, the question is how consumers would want them: “What the data says is that shoppers want to move forward by going back: Like their forebears who visited Harrods, they crave emporiums that are experiential, not transactional, in nature“. (See also images in this article as they portray new-fashioned designs in space and layout; notably these stores feel less crowded by merchandise, and some show in-store digital displays.)

These are challenging times for bricks-and-mortar stores. New possibilities are emerging for physical stores to grow and thrive, yet they will have to adapt to changed shopping and purchasing patterns of consumers and develop new kinds of experiences that appeal to them. It should be a combined effort, with contribution from interior design of stores and visual merchandising, utilities and amenities based on digital technologies implemented in the store, and the support and assistance by human personnel. The in-store design is especially important in setting the scene — in appearance, comfort and appeal — that will shape shoppers’ experiences. Retailing could evolve as far as into new forms of ‘experiential shopping’.

Ron Ventura, Ph.D. (Marketing)

Reference: [*] Measuring Emotions in the Consumption Experience; Marsha L. Richins, 1997; Journal of Consumer Research, Vol. 24 (September), pp. 127-149.

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When evaluating a restaurant, the quality of food is not like other factors considered — it has a special status. The same goes quite as much for other food establishments like coffee-houses. The customers or patrons may trade-off several factors which include the food, service, venue, price and location, yet food quality usually gets a much greater weight than the other attributes, suggesting that the decision process is practically not fully compensatory. The quality of the food, its taste and how much we enjoy it, is a “pre-condition” to dining at a restaurant. However, the balance with other attributes is important; in some cases, failure on those other attributes can be detrimental to the willingness of consumers to return to a restaurant or a coffee-house.

  • Some coffee-houses effectively function as ‘coffee-restaurant’ establishments by serving meals of a variety of food items suitable for every time of day (from eggs, salads and toasts to soups, pasta, hamburger or chicken-breast schnitzel with supplements).

Suppose that Dina and Mark, a fictional couple, are dining at a restaurant and find the dishes served to them being well-prepared and they enjoy very much the food’s taste. However, they are very unhappy with the sluggish service they get and inappropriate answers of the waiter, and feel the atmosphere in the restaurant is not pleasant (e.g., too dark or too noisy). The experience of Dina and Mark can be greatly hampered by factors other than food. How superior should the food be for our diners to be ready to tolerate bad service or a place they do not feel comfortable to be in for an hour or two?

On the other hand, Dina and Mark would likely expect the food (e.g., a dish like ‘risotto ai funghi’ [with mushrooms]) to uphold to a certain gratifying standard (i.e., that the ingredients are genuine, the texture is right, and the dish is overall tasty). If the food is not perceived good enough and diners do not enjoy it, this takes out the point of considering dining at the restaurant altogether. But if the food is good though not so special or great, yet the patrons Dina and Mark feel the staff truly welcome them, treat them warmly and cater to sensitivities they may have, they could still be happy to dine at such a restaurant again, and again. When the food is already satisfactory, additional facets of the experience such as great service and a pleasing ambience can increase substantially the desirability of a restaurant or coffee-house as a place consumers would  like to patronize. We may be looking at a decision process where at first food is a non-compensatory criterion, yet above a certain perceived threshold the balance customers-patrons strike between food and other attributes of their experience becomes more intricate and complex.

Browsing reviews of restaurants that are shared on TripAdvisor’s traveller website can provide helpful clues on how customers-patrons relate to food and additional factors in their appraisals of their experiences at restaurants. Reviews were sampled of Italian and Asian restaurants in Tel-Aviv and London (members-reviewers may be city locals, national and international travellers — examples are quoted anonymously so that reviewers and the specific restaurants they review are not identified by name).

Reviewers most often open by referring to the food they have had at the restaurant; next they may give their assessment of the service they have received, design and atmosphere, price or value, and location of the restaurant. Thus, a review may start by appraising the food as good / great / delicious, and then stating that the service was good / nice / efficient. Nonetheless, it is not uncommon for diners-reviewers to open with an assessment of the service they have received at the restaurant. There seems to be a greater propensity to open the review with service when it is superb, but also on the contrary when it is terrible. Occasionally a review will refer firstly to the atmosphere in the restaurant, which is formed by aspects such as interior design or décor, lighting, music and overall ambience. Atmosphere will appear first or at least early in the review particularly when it is superior or inferior.

Additionally, we can distinguish between reviews that are composed of a few short argument-like statements about the food, service and other attributes, and reviews that tell a story (i.e., a narrative-like review). There are diners-reviewers who go especially into detail of the dishes or items of food they, and possibly their companions, have ordered, and their opinion of the food. Yet reviewers may also describe how they were treated by the serving staff, particularly when they felt exceptionally welcome and cared for or annoyed and undesired. Reviews that have a narrative give a stronger impression of the course of dinner to the reader who can more easily visualize it.

It seems that when diners-reviewers say the food is ‘good‘, they do not throw it out of hand; they do mean that the food is truly good, fresh and tasty. This appraisal should be interpreted as a base threshold for being satisfied with the food. When the food is more than ‘good’, reviewers explicitly express it with adjectives like ‘great’, ‘delicious’, ‘fabulous’ or ‘amazing’. Conversely, descriptions of the food as ‘average’, ‘OK’, and moreover as ‘mediocre’, are certainly not compliments, more likely suggesting the food was barely satisfactory. Unless there was something else especially good about the experience in that restaurant like its service or venue, the reviewer would probably have little motivation to return.  Consider for example a reviewer who said about an Italian restaurant in Tel-Aviv: “The ONLY redeeming factor is, in my opinion, the ambience, which is really cozy and relaxed. Too bad they don’t serve food to match” (capitals in origin, rating: 2 ‘rings’ out of 5). Similarly, a reviewer of an Asian restaurant in London complimented it for its “friendly and attentive” waiting staff, but concluded: “So there were a lot of positives about this place, but I’m afraid the food just wasn’t good quality. It was very bland and boring” (rating: 2 ‘rings’). On the other hand, a review of an Asian restaurant in Tel-Aviv offers the opposite case wherein the reviewer states “AMAZING food, OUTRAGEOUS service” (title, capitals in origin), and ends with the conclusion “basically terrible service which was definitely the opposite of the wonderful tasty food we were served” — the rating for this restaurant experience: also 2 ‘rings’.

  • A prospective diner who looks for a restaurant to try for the first time may find the choice task confusing and daunting when reviews of the same restaurant are quite the opposite of each other in their content. Still, it usually does not take too long to realise the ratio of positive to negative reviews given to a restaurant, in addition to the chart of distribution of ratings it received.

Service appears as the second most important factor after food in a restaurant. Patrons want the waiting staff to be friendly and respectful (this of course is a two-way street), be attentive and not letting them feel forgotten, and to be flexible and kind enough to accommodate their personal sensitivities or preferences (e.g., less spicy, nuts-free, replace polenta with rice as supplement). Less pleasant or efficient service will not necessarily make diners-reviewers reject the restaurant if its food is excellent, but they could drop one grade off its rating (e.g., from 5 to 4). Inversely, when the diners-reviewers are happy with the quality and taste of food, then also meeting a warm and helpful waitress — or sitting in comfort in a beautifully designed venue — can make the whole experience so much better. Reviewers repeatedly emphasise when, on top of their pleasure of the food, they are impressed by a waiter or waitress who smiled to them, was friendly, attentive and helpful, and made them feel at home. A reviewer of an Italian restaurant in London explains why it is her favourite: “Quite simply, the food is absolutely gorgeous. Wonderful ingredients and very well cooked. But most of all the welcome that we received and service that we got from everyone is great” (rating: 5).

A particular aspect of service is the length of time a customer has to wait either to be seated at a table or while dining. Many restaurants take table reservations, but not all do. Not taking reservations is legitimate, but it is far less acceptable and even offensive when staff at a restaurant (including coffee-restaurants) run a waiting list at the doorstep and appear pleased with letting prospect customers gather and wait outside as if to show around how popular their establishment is; if you complain they may even hint at you how much they do not really need your patronage. Such past experience may have made a British reviewer visiting an Italian restaurant in Tel-Aviv be thankful when: “The staff were very pleasant and found us a seat on a very busy afternoon without behaving as if they were doing us an enormous favour”. In a different case, at an Asian restaurant in London, a reviewer commented: “Long wait to be seated, despite the place being half empty, as the servers were running around serving tables but not seating people”. Considerate restaurant proprietors may keep seats reserved for people waiting (e.g., next to the bar), and may even offer them a free drink if waiting is extended.

While at the table, diners dislike when waiters appear to forget them behind or somehow miss sight of them (e.g., waiting for menus, for taking order and bringing courses ordered, for the cheque). A reviewer in Tel-Aviv was critical pointedly of servers who “it seems lost interest”, and started chatting with their colleagues or playing on their phones. Waiting staff are expected to stand by, being ready to answer requests or voluntarily enquire if diners need anything. An American reviewer at another Italian restaurant in the city, coming “late one night”, appreciated that “my waitress made an effort to check on me regularly”. At an Italian restaurant in London, a reviewer noted that on arriving early for a meeting, “I was offered a newspaper to read while I waited which I thought a rather nice touch”; overall, he commended the service whereby “the staff proficiently and effortlessly ensured everyone felt special and were looked after”. Seemingly little touches matter!

In restaurants of fine cuisine it seems justified to wait patiently longer for an order (e.g., 20 minutes for a main course) as it could mean that the dish is freshly prepared with care for you in those very moments from start to finish [an advice received from my father]. In many ‘popular’ or casual restaurants, however, it would be much less the expectation, though it could depend on the type of food and how complicated it is perceived to prepare the dish. Furthermore, the sensitivity of customers-patrons to time spent could be subject to the occasion (e.g., meeting and dining leisurely in the evening vs. a pre-theatre dinner or a lunch break).

Reviews tend not to address directly the time until a dish ordered is served but more generally relate to the waiting time at any stage while being at the table. Some relevant references were traced in reviews of Asian restaurants in London: (a) A reviewer noted that “service can be slow” and “a bit hit and miss” (although the food and atmosphere were good); (b) Waiting for food was raised by a reviewer as an issue for concern: the waitresses seemed “understaffed” and having “stressed looking faces”, with the result that “We sat around with no food or drink for over 20 minutes before we could grab a waitresses’ attention” (the food was “fantastic” and the rating given could otherwise be 5 rather than 4 — the reviewer “would defiantly” return); (c) A reviewer who was overall happy with the friendly and efficient service and “freshly cooked and tasty delicious” food particularly remarked that the “food came quickly”.

The aesthetics of interior design of a restaurant or coffee-house can also have an impact on consumers’ attitude towards the place and on their behaviour. The style, materials, colours, surrounding decorations, furnishing, lighting etc. are instrumental in the way the design helps to create a certain atmosphere and mood (e.g., cold or warm; traditional or top-notch modern; quiet, ‘cool’ or energetic).

John Barnett and Anna Burles of ‘JB/AB Design’, a London-based agency specialising in design of coffee shops, offer six instructive guidelines on the ways design on different levels can contribute to brand experience. They start with creating a happening in the coffee shop (‘The shop is a stage’), followed by using appetizing imagery of food (‘customers eat with their eyes’); being authentic and relevant; persuasive visual merchandising; creative ambience; and giving customers good reasons to come and ‘gather around a table’ in  the coffee shop. Their recommendations sound mostly if not all adaptable to more types of food and drink establishments, including restaurants. In setting an authentic design, they advise to ‘say it like you mean it’ all round the shop : “The whole shop is a canvas for imagery and messaging that forms the basis of a conversation with your customers”.

Reviewers-diners talk less frequently of aspects of interior design and description of the space of the venue; broader references are made to atmosphere or ambience. In the case of an Italian restaurant in the Tel-Aviv area with an elegant modern design, three different reviewers noted it has “a very nice décor”, that it is “very spacious and modern”, and the “interior is beautiful, a lot of air”. A reviewer relating to an Italian restaurant in London wrote: “The décor seems a little dated, but there were some fun touches”. This reviewer also addressed music played in creating a pleasing atmosphere (“alternated nicely between Frank Sinatra and Luciano Pavarotti — perfect!”). A reviewer-diner mentioned earlier, who was impressed by the newspaper gesture, also said of that Italian restaurant: “The ambience was extremely relaxed and the décor is comfortable, plush and smart”. An Asian restaurant in Tel-Aviv was described by a reviewer as “pleasant, with very informal atmosphere, soft background music, and industrial/downtown décor”.

Some appraisals of design and atmosphere sound somewhat more reserved though still positive. For example, a reviewer said of a luxury Asian restaurant in London that it is “very dark inside, but somehow it is also very cooling place”. A reviewer in another luxury Asian restaurant was very impressed by a modern-futuristic design yet felt uncomfortable with it: “The place is playing with your perception, slightly disorienting with its colours and stairs and reflecting surfaces”. The reviewers quoted above were largely very happy with the food as well as the service. In just one case observed, a reviewer of an Asian restaurant in Tel-Aviv became very upset with the food and proclaimed “Sorry! But when we decide to go to the restaurant, we wish to have a good meal, NOT ONLY a trendy design” (capitals in origin, rating: 1). In this case the “rather nice designed place” could not compensate for a poor food experience. Customers-patrons welcome inspiring and modern designs, but the design must also feel pleasing to the eye and comfortable — be creative with designs but not be excessive.

A top priority for restaurants, and to a similar degree also for coffee-houses, remains taking the most care of the quality and taste of the food they serve. However, it is essential to also look after additional factors or facets that shape the customer’s experience such as service, design and atmosphere, price or value. The kind of service customers-patrons experience is especially a potential ‘game-changer’. Additionally, consumers may not be coming to a restaurant or coffee-house for its design but if it looks appealing the design and atmostphere can make the stay more comfortable and enoyable, and encourage patrons to stay longer, order more, and return. Food is a central pivot of customer appraisals, yet other facets of the experience can tilt it either way: spoil and even ruin the experience or instead support and enhance it.

Ron Ventura, Ph.D. (Marketing)

 

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Ever so often, in many and different places, people take photos. The immediacy of access to cameras on smartphone devices has made photography a ubiquitous and more casual activity. The awareness and sensitivity of people to visual scenes and materials has increased, and photo images especially play a greater role in our lives. When people take their own photos to capture their experiences, this activity may become an integral part of the experience. It raises therefore an interesting question, how an experience could be subjectively affected by the act of taking photos whilst the experience is happening.

Almost obviously, our tendency to take photos is stronger during touristic experiencesAscona: Promenade on Lago Maggiore away from home while travelling in our own country and furthermore on visits to foreign countries. The experience could take place on holiday in a major city when touring its main streets and famous sites, or on vacation in a holiday resort in nature, going on a trip to the top of mountains, near a lake or along the sea-shore. However, we may take photos during more ordinary experiences such as dining in a restaurant (e.g., photo-taking of appetizing food dishes); in a party or family gathering; while playing (e.g., creative games like Lego); watching parades, sports events or other festivities; and even during a shopping tour. In those experiences we could be more passive observers or more active players, which may influence any additional involvement in photo-taking and its effect on the overall experience.

Kristin Diehl, Gal Zauberman and Alixandra Barasch (2016) investigated in-depth the effect that taking photos by consumers during an experience may have on their enjoyment from the experience: whether it amplifies enjoyment, or instead dampens it, and how the level of enjoyment varies in different conditions. Furthermore, they examined a proposed mechanism where engagement in an experience mediates enjoyment: in positive experiences, when individuals are more intensively engaged or immersed in the experience, it may elevate their enjoyment; thereby, to the extent that taking photos increases engagement, it would also heighten enjoyment. The researchers consider two routes of influence: (a) photo-taking competes with the ‘source’ experience by causing attention shifts, thus reducing engagement and enjoyment from the experience; (b) photo-taking helps in directing and focusing more attention on visual aspects of the ‘source’ experience, leading to increased engagement and consequently heighten enjoyment.

The photos taken may have subsequent benefits to individuals such as in aiding with memory of experienced events at a later time (i.e., serving as memory cues) and in showing photos of their experiences to relatives and friends (i.e., social benefit), but the researchers focus specifically on effect of the act of taking a photo at the time of the experience. Their research entailed nine studies (3 field studies & 6 lab experiments), using a range of methodologies and experience-contexts.

A most typical touristic experience is a city bus tour — consider riding a double-decker bus on an open-air top floor. Diehl and her colleagues organised actual bus tours in Philadelphia for photo takers and non-photo takers. They succeeded in showing in this setting that photo takers enjoyed their touristic experience more than those who did not take photos. They also obtained some evidence that the photo takers may have felt more engaged during the experience though the effect was statistically too weak. (Note: In order to exclude any benefits from using photos after the bus tour all participants were disallowed to take their personal cameras or smartphones with them and the assigned  ‘photo-takers’ were given instead a digital camera with a new memory card, yet they could not keep the card afterwards).

The researchers conducted a second field study, this time in the context of a casual lunch (i.e., it was not suggested the food was especially attractive to photograph). In this study the results were already stronger. Consistent with the bus tour study, photo-takers enjoyed the lunch experience more than those not taking photos, but in addition the photo-takers were found significantly more engaged. The setting was sufficient to support just in part that greater engagement mediates the higher enjoyment felt by those taking photos. (Note: In this study no physical restrictions were imposed — those instructed to take photos could use their own cameras or smartphones).

Lab experiments create less realistic experiences since they are only simulated, and the act of taking a photo is also simulated (i.e., a camera icon and a mouse click). However, a controlled experiment can facilitate surfacing the effects of interest while testing for the influence of additional factors. It is acknowledged that the researchers have already shown there is ground to their expected effects on enjoyment in real-life settings.

A lab experiment of simulated bus tours (using videos of tours in Hollywood, California, and London, UK), found support that photo-takers enjoyed their bus tour experiences significantly more, as well as felt significantly more engaged in them, than those not taking photos. Furthermore, there also was support that engagement fully mediates or connects positively between taking photos and enjoyment. Moreover, memory of the greater enjoyment of those taking photos persists as long as a week after the experience. (Note: Remembered enjoyment is to be distinguished from remembered content of the experience).

So, does taking photos indeed work to focus greater attention on what people experience and thus enhances their engagement and increases their enjoyment? The researchers provide important evidence with the help of eye-tracking (field study, museum exhibit) that taking a photo channels more attention to the objects of interest in the experience. In particular, it directs more attention to relevant visual aspects of the experience, that is, to the exhibit artifacts vis-à-vis other objects (e.g., information displays) in the exhibit hall. First, significant effects of greater enjoyment and engagement by photo-takers, and the mediation function of engagement, are replicated. Second, taking photos leads to spending a relatively greater time fixating on the artifacts (as proportion of total duration of fixations) compared to visiting without taking photos. Visitors taking a photo of an artifact fixate for a longer duration on it compared with those who only watch it; no such differences were found for other objects. Third, it is not only the duration of fixations but also the number of fixations dedicated to artifacts that are relatively higher among those taking photos compared to those who do not. (It should be noted, however, that measures were aggregated across ‘exhibit artifacts’ versus ‘other objects’, and not verified for every single artifact being photographed or not.)

Scenes for photography can be very different, some are rich with detail, light and colour (e.g., a lakeside landscape), others being more monotonic or homogenous (e.g., a vase or a person against a dark uniform background). This difference in experience seems to matter little with regard to enjoyment or engagement when taking photos. Comparing between bus tours (Hollywood/London) and pop/rock concerts (performing against a plain and non-changing background), it is found that similarly in those experiences those taking photos enjoy the experience more and feel more engaged than non-photo takers, regardless of the type of experience (full mediation was also supported).

Any indication that participants in the experiment have enjoyed the concert somewhat more than bus tours did not lead to any consistent conclusions; it may be due more to a music concert being more energizing than a city bus tour at least in idea, especially if we take into account also the experience of the music not captured in a photograph. But in real-life concerts of performing artists the viewers more usually today record video clips, not still photographs, by simply raising the smartphone above the head and filming. It is hard to say in these circumstances how much they may lose of the experience at all if they watch it through the screen and how it may affect their attention and enjoyment. Dealing with the smartphone or tablet to check the videos during the performance may distract them somewhat more. Yet, it could be that viewers recording videos on their devices may be disturbing more to other people in the audience than their own enjoyment of the experience.

Expo Milano 2015: Dining Bar (Argentina)

EXPO Milano 2015: For illustration of experience

We may find ourselves in different positions in experiences: Imagine taking a boat cruise on a lake, standing on the deck viewing the landscape around, or watching a parade on a maid road, looking from the side of the road — in these events one is primarily a passive observer. However, one becomes an active participant in the event, for example, of playing a creative game such as building Lego models or possibly visiting a museum exhibit that allows learning by using interactive displays and tools. As Diehl and colleagues suggest, it may have two implications: (a) the ‘active’ experience is in origin more entertaining and enjoyable so there is less to gain by additionally taking photos; (b) engaging in the task of taking photos interferes with participation in the main activity. The researchers applied creative arts-and-crafts projects (e.g., building an Eiffel Tower from wafers and icing): to make conditions comparable, they assigned participants to either actively building the tower model or to passively observing someone else building the same kind of model.

Indeed, taking photos during the experience makes a difference in increasing engagement and enjoyment only for those observing the project and not for those who are actively building the model. Photo takers who actively built the model were also more inclined to report that taking photos during the experience interfered with their project compared to those who only observed and took photos. On the other hand, the latter took more photos (about ten on average) compared with those who tried to build the project and take photos simultaneously (5.5 on average). Reasonably observers were more free to take photos and enjoy it as well. While taking photos did not increase enjoyment of the ‘builders’, there is also no evidence that it decreased it. It could be a little disappointing as we may expect that taking photos as we progress may enhance our sense of pride and satisfaction with our creation taking form — a sort of ‘I Built It Myself’ effect (following an “I Designed It Myself” effect by Franke, Schreier and Kaiser, 2010). Two requirements may be needed: first, that the ‘builder’ is of course successful during his or her task, and second, that by intermittently advancing with the project and stopping for a minute when progress is made to take a photo, it helps to minimise interference or distraction.

This topic brings to mind a particular concern, when the task of photography intervenes in the ‘source’ experience, and potentially disrupts it. Diehl and her colleagues cleverly distinguish between the functional-physical act of taking photos (i.e., operating a camera) and the mental process driving behind it (i.e., planning  the photos). It may be argued in this regard that the impact may be different on people taking photos with a smartphone or tablet device, a compact camera, or a more complex single-lens-reflex (SLR) camera. Also, more dedicated amateur photographers, with greater interest and photographic skills, may approach taking photos during an experience differently from others. This issue unfortunately does not receive an adequate answer in the research.

The researchers test two kinds of suspected interferences that may disrupt or distract photo takers from the main experience they engage in: (1) physical — by assuming one would have to carry and hold a bulky digital SLR camera (represented in the experiment just by a larger camera icon); and (2) functional — by enabling the photographer also to delete unsatisfactory photos right after taking them. The results have shown that with medium-interference (‘holding SLR’) the enjoyment of these photo-takers was in-between those taking photos as above and those not taking photos, not significantly different from either. Yet, with high-interference (‘SLR + deletion’) enjoyment was close and not statistically different from non-photo takers and lower compared with ‘regular’ photo-takers. Corresponding findings were obtained for engagement. Attending to delete photos is the task that appears to truly distract photo takers from the main experience (like checking one’s video during a concert). Holding an SLR camera should not disturb so much dedicated amateur photographers (with some exceptions of extra equipment) but certain operations in taking photos may demand additional attention that could indeed compete with the subject experience.

Nevertheless, the researchers demonstrate in another experiment that the mental process of thinking about taking photos and planning them is more crucial than the functional act of taking the photos. Planning to take photos alone increased enjoyment just as for those actually taking photos, compared with those not involved in any way in taking photos. In other words, planning to taking photos “led to similar levels of enjoyment as actually taking photos”. Reported engagement was similarly heightened when planning to take photos. For more dedicated amateur photographers planning the photos to be taken is a key part of the activity and may not be easy to separate from some functions (e.g., choices of composition, focal object, exposure and speed). Yet the photography-related activity may not be viewed as an interference but as an integral part of the whole experience, a way of living the experience more deeply and vividly.

When the experience is perceived as negative, taking photos would also increase engagement, but in this case it will result in lower enjoyment compared to those not taking photos. The increased engagement means more attention of the photo takers becomes focused on negative aspects of the experience.

The researchers study a specific mechanism of mediation by engagement between taking photos and enjoyment. But many consumers may receive their satisfaction and joy from recording their experience to refresh their memories later through the photos, perhaps more so if they are less interested in photography per se. Moreover, consumers increasingly take photos with the intention of uploading them to social media networks (e.g., Facebook, Instagram) for sharing with their acquaintances, close and far. Diehl and colleagues are not convinced, based on an initial survey, that people anticipate such benefits while taking the photos. Nevertheless, they do not exclude this possibility: they note that “individuals presumably take photos in part because they expect that reviewing those photos in the future will provide them with additional enjoyment” and such forward-looking behaviour may enhance their immediate enjoyment from the experience. In their judgement many consumers do not anticipate such an effect. They do note, however, that many marketers also forbid taking photos on their premises because they seem to believe that taking photos ruins individuals’ experiences.

The research of Diehl, Zauberman and Barasch is interesting and refreshing on a topic not studied often. It shows from different angles how taking photos enhances the enjoyment of consumers in positive experiences through increased engagement (i.e., focus more attention, feeling more deeply immersed in the experience). Taking photos could plausibly be seen as less interfering or disrupting to people the closer they perceive this activity as complementary to the experience itself, and especially so for those more interested in photography. Marketers should be less reluctant to let consumers taking photos since it is more likely to make them enjoy the experience better. Consumers have to learn when is the best timing to turn to taking photos so as to enjoy it the most as part of the whole experience.

Ron Ventura, Ph.D. (Marketing)

Reference:

How Taking Photos Increases Enjoyment of Experiences; Kristin Diehl, Gal Zauberman, and Alixandra Barasch, 2016; Journal of Personality and Social Psychology, 111 (2), pp. 119-140.

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‘Where do I find umbrellas?’ ‘How do I get to the shoe department?’ Questions like this are likely familiar to many consumers when visiting large department stores. Walking long pathways on a floor and moving between floors in a quest to find a needed product can be time-consuming and annoying. Signposts often are too general and lack useful instructions for direction. Mobile mapping applications (‘apps’) of indoors environments, an evolving technological development of the last five years, can make the shopping experience in large stores more smooth, convenient and enjoyable for consumers. A mapping app can be useful not only in department stores but also within large supermarkets, fashion, toys or DIY stores, to give just a few examples. Moreover, navigating in complex structures like shopping malls, airports, hospitals etc. may be made much easier with a mapping app.

Over the years large physical floor maps have been installed in some department stores (e.g., hung on the wall near a lift) — the problem is that the shopper has to try to keep in memory the route to pass to a desired destination. Signage of product directories placed in front of escalators may help the shopper to find on what floor a particular type of product (or a brand) is placed, but one may be left again to stroll a widespread floor until locating the product requested. Signs hung above aisles (e.g., in supermarkets) may not be seen until one approaches the relevant aisle. Some retailers and operators of shopping centres provide printed maps on cards or leaflets to guide their customers on the premises; the map is usually accompanied with index lists and codes for reference, and regions on the map diagram may be printed in different colours to facilitate navigation. Holding a map in the shopper’s hands can be a great relief. Holding a dynamic and interactive map displayed on the shopper’s mobile phone seems as an even greater step forward.

Mapping applications of enclosed environments aim to provide people with spatial information and tools similar to those that facilitate their navigation on roads and in the streets of cities. One can search for an address, a business or an institute, and the mapping utility will show the user its location on the map. Additionally, when used on a mobile device, smartphone or tablet, the application can show the way and follow the user until he or she gets to the destination. In-store, the ‘address’ would typically be a product. An in-store mapping app may show the shopper the location of the product in the store, and perhaps give instructions step-by-step how to get there, yet it will not necessarily be able to follow the user to the destination — an additional layer of technology, a physical infrastructure, is required to locate the shopper on the map and automatically “advance” the map on display as he or she walks in the store.

  • A web-based mapping utility of Heathrow Airport (London), for example, allows a prospect traveller to look for a starting point and a destination in any of the five terminals and their facilities and the online service will provide instructions in text and over the map diagram how to get there.

The GPS technology that usually allows the positioning of users on a map of an outdoors space, and follows the user until he or she gets to a destination, stops working when one enters an enclosed environment of a building. It is additionally not accurate enough to pinpoint the location of a person in a relatively small area, and especially is impractical in distinguishing between floors in the building. Therefore, this technology cannot be applied in mapping applications either in shopping centres or in-store. Alternative technologies have been tested and utilised for indoors mapping: more notable is Bluetooth technology applied with beacons, but there are other options in the field, including Wi-Fi and LED light bulbs for signalling and transmitting location information. Effective positioning of shoppers is said to require a dense network of devices (transmitters) throughout the store, oftentimes an expensive enterprise. Therefore, retailers appear to be more interested in implementing select functions of in-store mapping applications (e.g., orientation, promotions) but are less in a hurry to adopt also the capability of positioning shoppers on a map of the store.

A retailer can deliver via a mobile app promotional offers (e.g., digital coupons) to shoppers as well as updates on new products, services and events. A retail app may  include a bundle of services such as tools for mapping and managing a shopping list for the benefit of the customers. Some retailers already use a location functionality in their stores, independent of mapping, to improve the timing when offers are sent to shoppers during their visit, specific to their location in the store. But this functionality usually utilises fewer devices (e.g., beacons) than would be necessary for a full positioning capability. The mapping tools can produce several advantages: (1) deliver a helpful service to shoppers (e.g., using a shopping list with a map); (2) enhance navigation by location of the shopper on a dynamic map; (3) give a better incentive to shoppers to authorise an app to track their location in the store; (4) mount ‘flags’ of promotional offers for various products on the map near the relevant aisles or display shelves, particularly as the shopper approaches nearby (as a benchmark for illustration, think of information [icons & text] mounted on maps of Google or in an app like Waze).

The map is meant to provide first of all spatial information. Should mapping applications also be visuospatial, that is, display a visual image of the store’s appearance? It would be like making a virtual simulated tour of the store. The experience could be more entertaining (e.g., like gaming) but would it be more informative and useful? If the shopper is already in the store, he or she should not really need the enhanced display — it could be more confusing (screen and reality may interfere with each other) and time-consuming to navigate with such a display. The enhanced imagery display may be useful for planning a visit before entering the store, or perhaps for online shopping in a virtual store. Yet, once a shopper is at the physical store, a visuospatial display should be made an option as a matter of discretion by the shopper while the main display better be a map diagram that matches the actual layout and organisation of the store.

  • Mobile marketing company aisle411, which specialises also in indoors mapping for retail stores, created in co-operation with Google’s Project Tango a 3D imaged environment (“3D mapping”) of a supermarket store with features of augmented reality (e.g., product information. rewards and coupons). [BusinessWire.com, 25 June 2014, see video demonstration — note that the application is operating on a tablet mounted on the shopping cart]

A study published last year (Ertekin, Pryor & Pelton, Spring 2017) sought to identify perceptions, attitudes or personality traits that could motivate consumers to use mobile in-store mapping applications (*). The study focused on consumers from generations X (born in 1961-1979) and Y (born in 1980-1999 — adults likely to be familiar with and orientated to using computer technology and its applications). Actually 80% of the respondents in the sample were of generation Y. All respondents (n=258) had a device that can connect to the Internet (57% had a mapping application downloaded to their smartphone). The researchers considered factors regarding the use of technology of in-store mapping applications and how it would affect the shopping experience (30% of respondents reported trying an in-store mapping application before).

The degree of ease-of-use of an in-store mapping app was found to have a positive effect on intention (or ‘propensity’) to use it while shopping. Perceived ease-of-use was defined as the “degree to which a person believes that using a particular system would be free of effort” (e.g., easy to use, clear and understandable, flexible to interact with). Usefulness of the app pertains specifically to the act of shopping, helping to enhance the ‘job performance’ (effectiveness) of shopping with the map. As expected, perceived usefulness also had a positive effect on the intention to use such an app.

In addition to those functional or utilitarian benefits of the application, the researchers addressed the app’s ability to make the shopping experience emotionally more entertaining (particularly inducing excitement associated with novelty of the technology). Entertainment benefits (e.g., enjoyable learning about stores, fun, or merely a good pass time when bored) also strengthen the intention to use an in-store mapping app.

The willingness to use a mobile in-store mapping app is diminished by greater concern of consumers about sacrificing their security when using a network computing application (i.e., emphasis on protection from malicious software or stealing personal information). Conspicuously, however, reference to data security is only hinted and the sensitive matter of privacy is not properly covered, particularly the reluctance of consumers to let their moves being tracked. If the mapping app provides the user more perceived benefits of the types cited above, they may be less resistant to allow the retailer to track them.

A result that would probably be of interest to retailers shows that consumers who exhibit a stronger deal proneness are more intent on using an in-store mapping app. In other words, consumers who are more leaning towards buying on discounts and deals are more likely to be attracted to the mapping app in hope of finding there promotional offers, easy to locate in the store. Yet retailers should be careful about this finding because if they are too focused on delivering promotional offers through their apps, then they will get shoppers more interested in deals and reward points more frequently than other shoppers. In order to encourage shoppers to extend their in-store visits longer and make more unplanned purchases, promotional offers should be put forward on the app more closely in accordance with the store sections or aisles the shoppers access, when they pass through; where feasible, generate offers in association with products on a shopping list the shopper fills-in on the app (i.e., help a shopper find more easily the products on his or her list while adding products that are more likely to be perceived as complements to them).  Promotions are only one of the ways to encourage consumers to shop more, and that is true also for the ‘package’ offered in a retail mapping app.

The model analysed in this study did not provide support for a positive effect of being pressed in time on intention to use an in-store mapping app  (i.e., apps are not associated enough with saving time or those pressed in time are interested in the mapping app no more than others with more free time). It does not seem to give ground to a concern of retailers that such an app might allow shoppers to shorten their shopping trips, but as suggested above, if needed there are ways to circumvent such behaviour. The model also did not support the hypothesis that consumers who like to gather more market information (e.g., products, prices, innovations) and share their knowledge with others, to advise or actually influence them, are more inclined to use an in-store mapping app to accomplish their goals.

The study makes early steps in investigating consumer behaviour pertaining to using retail mapping apps. It confirms that functional as well as emotional benefits are drivers of consumer use of a mapping app in-store. But the investigation has to proceed to validate and refine those findings and conclusions. While the study targeted young consumers of relevant generations Y and X, the sample consisted of university students (hence probably also the vast majority of millennials). It may be sufficient for establishing relations of the tested factors to the use of mapping apps, but further research should go beyond a student population to cover consumers of these generations to validate the relations or effects. Additional analyses and models (beyond the regression model applied in this study) will have to examine effects more thoroughly or with greater scrutiny (e.g., causality, mediators). Furthermore, consumer disposition towards the mapping apps has to be examined through actual experience and behaviour, for example by letting shoppers perform their shopping ‘naturally’ with an app or by giving them specific tasks to perform with a mapping app in their shopping trip. The study of Ertekin, Pryor and Pelton would serve as an instructive and helpful starting point.

Consumers may utilise a mental map of a store site that they hold in memory to guide them through locations in the  store as in an auto-pilot mode. Mental maps are possible to construct, however, for stores that shoppers visit frequently enough or regularly. Digital mapping apps may change how consumers construct and utilise their own mental maps, stored in their long-term memory. People tend to favour digital information sources and rely less on their own memory. A shopper may need no more than a graph as a spatial model to perform his or her shopping job, or perhaps a more detailed mental model of a drawing similar to a map. Yet the extent to which people also use picture-like mental imageries of the site depends on how useful is the visual information for performing their task, because visual imagery requires greater resources. So visual imagery may be re-constructed more selectively as needed — think of ‘photos’ of specific locations of importance or interest to the shopper (e.g., shelf displays of ‘target’ products) pinned to the mental drawing at the relevant places. A conception like this may be emulated in the digital in-store maps of mobile applications.

Mobile in-store mapping applications present a significant, promising development in re-shaping consumer shopping experiences. It could play an important role in the future of retailing, but there is still ambiguity about the extent to which large retailers would choose to implement mapping features and capabilities, particularly the real-time positioning of shoppers inside a physical store. Mapping applications for retail indoors sites may impact, for example, the balance in preference of consumers between shopping online and offline (i.e., in brick-and-mortar stores).

Ron Ventura, Ph.D. (Marketing)

(*) An Empirical Study of Consumer Motivations to Use In-Store Mapping Application; Selcuk Ertekin, Susie Pryor, & Lou E. Pelton, 2017; Marketing Management Journal, 27 (1), pp. 63-74.

 

 

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A shopper may well know what types of products he or she is planning to buy in a store, but what products the shopper will come out with is much less sure. Frequently there will be some additional unplanned products in the shopper’s basket. This observation is more often demonstrated in the case of grocery shopping in supermarkets, but it is likely to hold true also in other types of stores, especially large ones like department stores, fashion stores, and DIY or home improvement stores.

There can be a number of reasons or triggers for shoppers to consider additional products to purchase during the shopping trip itself — products forgotten and reminded of by cues that arise while shopping, attractiveness of visual appearance of product display (‘visual lift’), promotions posted on tags at the product display (‘point-of-purchase’) or in hand-out flyers, and more. The phenomenon of unplanned purchases is very familiar, and the study of it is not new. However, the behaviour of shoppers during their store visit that leads to this outcome, especially the consideration of product categories in an unplanned manner, is not understood well enough. The relatively new methodology of video tracking with a head-mounted small camera shows promise in gaining better understanding of shopper behaviour during the shopping trip; a research article by Hui, Huang, Suher and Inman (2013) is paving the way with a valuable contribution, particularly in shedding light on the relations between planned and unplanned considerations in a supermarket, and the factors that may drive conversion of the latter into purchases (1).

Shopper marketing is an evolving specialisation which gains increasing attention in  marketing and retailing. It concerns activities of consumers performed in a ‘shopper mode’ and is strongly connected with or contained within consumer marketing. Innovations in this sub-field by retailers and manufacturers span digital activities, multichannel marketing, store atmospherics and design, in-store merchandising, shopper marketing metrics and organisation. However, carrying out more effective and successful shopper marketing programmes requires closer collaboration between manufacturers and retailers — more openness to each party’s perspective and priorities (e.g., in interpretation of shopper insights), sharing information and coordination (2).

In-Store Video Tracking allows researchers to observe the shopping trip as it proceeds from the viewpoint of the shopper, literally. The strength of this methodology is in capturing the dynamics of shopping (e.g., with regard to in-store drivers of unplanned purchases). Unlike other approaches (e.g., RFID, product scanners), the video tracking method enables tracking acts of consideration, whether followed or not by purchase (i.e., putting a product item in the shopping cart).

For video tracking, a shopper is asked to wear, with the help of an experimenter, a headset belt that contains the portable video equipment, including a small video camera, a view/record unit, and a battery pack. It is worn like a Bluetooth headset. In addition, the equipment used by Hui et al. included an RFID transmitter that allows to trace the location of the shopper throughout his or her shopping path in a supermarket.

Like any research methodology, video tracking has its strengths and advantages versus its weaknesses and limitations. With the camera it is possible to capture the shopper’s field of vision during a shopping trip; the resulting video is stored in the view/record unit. However, without an eye-tracking (infrared) device, the camera may not point accurately to the positions of products considered (by eye fixation) in the field of vision. Yet, the video supports at least approximate inferences when a product is touched or moved, or the head-body posture and gesture suggest from which display a shopper considers products (i.e., the ‘frame’ closes-in on a section of the display). It is further noted that difficulties in calibrating an eye-tracking device in motion may impair the accuracy of locating fixations. The video camera seems sufficient and effective for identifying product categories as targets of consideration and purchase.

Furthermore, contrary to video filmed from cameras hanging from the ceiling in a store, the head-mounted camera records the scene at eye-level and not from high above, enabling to better notice what the shopper is doing (e.g., in aisles), and it follows the shopper all the way, not just in selected sections of the store. Additionally, using a head-mounted camera is more ethical than relying on surrounding cameras (often CCTV security cameras). On the other hand, head-mounted devices (e.g., camera, eye-tracking), which are not the most natural to wear whilst shopping, raise concerns of sampling bias (self-selection) and possibly causing change in the behaviour of the shopper; proponents argue that shoppers quickly forget of the device (devices are now made lighter) as they engage in shopping, but the issue is still in debate.

Video tracking is advantageous to RFID  and product scanners for the study of unplanned purchase behaviour by capturing acts of consideration: the RFID method alone (3) enables to trace the path of the shopper but not what one does in front of the shelf or stand display, and a scanner method allows to record what products are purchased but not which are considered. The advantage of the combined video + RFID approach according to Hui and his colleagues is in providing them “not only the shopping path but also the changes in the shoppers’ visual field as he or she walks around the store” (p. 449).

The complete research design included two interviews conducted with each shopper-participant — before the shopping trip, as a shopper enters the store, and after, on the way out. In the initial interview, shoppers were asked in which product categories they were planning to buy (aided by a list to choose from), as well as other shopping aspects (e.g., total budget, whether they brought their own shopping list). At the exit the shoppers were asked about personal characteristics, and the experimenters collected a copy of the receipt from the retailer’s transaction log. The information collected was essential for two aspects in particular: (a) distinguishing between planned and unplanned considerations; and (b) estimating the amount of money remaining for the shopper to make unplanned purchases out of the total budget (‘in-store slack’ metric).

237 participants were included in analyses. Overall, shoppers-participants planned to purchase from approximately 5.5 categories; they considered on average 13 categories in total, of which fewer than 5 were planned considerations (median 5.6). 37% of the participants carried a list prepared in advance.

Characteristics influencing unplanned consideration:  The researchers sought first to identify personal and product characteristics that significantly influence the probability of making an unplanned consideration in each given product category (a latent utility likelihood model was constructed). Consequently, they could infer which characteristics contribute to considering more categories in an unplanned manner. The model showed, for instance, that shoppers older in age and female shoppers are likely to engage in unplanned consideration in a greater number of product categories. Inversely, shoppers who are more familiar with a store (layout and location of products) and those carrying a shopping list tend to consider fewer product categories in an unplanned manner.

At a product level, a higher hedonic score for a product category is positively associated with greater incidence of unplanned consideration of it. Products that are promoted in the weekly flyer of the store at the time of a shopper’s visit are also more likely to receive an unplanned consideration from the shopper. Hui et al. further revealed effects of complementarity relations: products that were not planned beforehand for purchase (B) but are closer complementary of products in a ‘planned basket’ of shoppers (A) gain a greater likelihood of being considered in an unplanned manner (‘A –> B lift’).  [The researchers present a two-dimensional map detailing what products are more proximate and thus more likely to get paired together, not dependent yet on purchase of them].

Differences in behaviour between planned and unplanned considerations: Unplanned considerations tend to be made more haphazardly — while standing farther from display shelves and involving fewer product touches; conversely, planned considerations entail greater ‘depth’. Unplanned considerations tend to occur a little later in the shopping trip (the gap in timing is not very convincing). An unplanned consideration is less likely to entail reference to a shopping list — the list serves in “keeping the shopper on task”, being less prone to divert to unplanned consideration. Shoppers during an unplanned consideration are also less likely to refer to discount coupons or to in-store flyers/circulars. However, interestingly, some of the patterns found in this analysis change as an unplanned consideration turns into a purchase.

Importantly, in the outcome unplanned considerations are less likely to conclude with a purchase (63%) than planned considerations (83%). This raises the question, what can make an unplanned consideration result in purchase conversion?

Drivers of purchase conversion of unplanned considerations: Firstly, unplanned considerations that result in a purchase take longer (40 seconds on average) than those that do not (24 seconds). Secondly, shoppers get closer to the shelves and touch more product items before concluding with a purchase; the greater ‘depth’ of the process towards unplanned purchase is characterised by viewing fewer product displays (‘facings’) within the category — the shopper is concentrating on fewer alternatives yet examines those selected more carefully (e.g., by picking them up for a closer read). Another conspicuous finding is that shoppers are more likely to refer to a shopping list during an unplanned consideration that is going to result in a purchase — a plausible explanation is that the shopping list may help the shopper to seek whether an unplanned product complements a product on the list.

The researchers employed another (latent utility) model to investigate more systemically the drivers likely to lead unplanned considerations to result in a purchase. The model supported, for example, that purchase conversion is more likely in categories of  higher hedonic products. It corroborated the notions about ‘depth’ of consideration as a driver to purchase and the role of a shopping list in realising complementary unplanned products as supplements to the ‘planned basket’. It is also shown that interacting with a service staff for assistance increases the likelihood of concluding with a purchase.

  • Location in the store matters: An aisle is relatively a more likely place for an unplanned consideration to occur, and subsequently has a better chance when it happens to result in a purchase. The authors recommend assigning service staff to be present near aisles.

Complementarity relations were analysed once again, this time in the context of unplanned purchases. The analysis, as visualised in a new map, indicates that proximity between planned and unplanned categories enhances the likelihood of an unplanned purchase: if a shopper plans to purchase in category A, then the closer category B is to A, the more likely is the shopper to purchase in category B given it is considered. Hui et al. note that distances in the maps for considerations and for purchase conversion of unplanned considerations are not correlated, implying hence that the unplanned consideration and a purchase decision are two different dimensions in the decision process. This is a salient result because it distinguishes between engaging in consideration and the decision itself. The researchers caution, however, that in some cases the distinction between consideration and a choice decision may be false and inappropriate because they may happen rapidly in a single step.

  • The latent distances in the maps are also uncorrelated with physical distances between products in the supermarket (i.e., the complementarity relations are mental).

The research shows that while promotion (coupons or in-store flyers) for an unplanned product has a significant effect in increasing the probability of its consideration, it does not contribute to probability of its purchase. This evidence furthermore points to a separation between consideration and a decision. The authors suggest that a promotion may attract shoppers to consider a product, but they are mostly uninterested to buy and hence it has no further effect on their point-of-purchase behaviour. The researchers suggest that retailers can apply their model of complementarity to proactively invoke consideration by triggering a real-time promotion on a mobile shopping app for products associated with those on a digital list of the shopper “so a small coupon can nudge this consideration into a purchase”.

But there are some reservations to be made about the findings regarding promotions. An available promotion can increase the probability of a product to be considered in an unplanned manner, yet shoppers are less likely to look at their coupons or flyers at the relevant moment. Inversely, the existence of a promotion does not contribute to purchase conversion of an unplanned consideration but shoppers are more likely to refer to their coupons or flyers during unplanned considerations that result in a purchase.  A plausible explanation to resolve this apparent inconsistency is that reference to a promotional coupon or flyer is more concrete from a shopper viewpoint than the mere availability of a promotion; shoppers may not be aware of some of the promotions the researchers account for. In the article, the researchers do not address directly promotional information that appears on tags at the product display — such promotions may affect shoppers differently from flyers or distributed coupons (paper or digital via mobile app), because tags are more readily visible at the point-of-purchase.

One of the dynamic factors examined by Hui et al. is the ‘in-store slack’, the mental budget reserved for unplanned purchases. Reserving a larger slack increases the likelihood of unplanned considerations. Furthermore, at the moment of truth, the larger is the in-store slack that remains at the time of an unplanned consideration, the more likely is the shopper to take a product from the display to purchase. However, computations used in the analyses of dynamic changes in each shopper’s in-store slack appear to assume that shoppers estimate how much they already spent on planned products in various moments of the trip and are aware of their budget, an assumption not very realistic. The approach in the research is very clever, and yet consumers may not be so sophisticated: they may exceed their in-store slack, possibly because they are not very good in keeping their budget (e.g., exacerbated by use of credit cards) or in making arithmetic computations fluently.

Finally, shoppers could be subject to a dynamic trade-off between their self-control and the in-store slack. As the shopping trip progresses and the remaining in-store slack is expected to shrink, the shopper becomes less likely to allow an unplanned purchase, but he or she may become more likely to be tempted to consider and buy in an unplanned manner, because the strength of one’s self-control is depleted following active decision-making. In addition, a shopper who avoided making a purchase on the last occasion of unplanned consideration is more likely to purchase a product in the next unplanned occasion — this negative “momentum” effect means that following an initial effort at self-control, subsequent attempts are more likely to fail as a result of depletion of the strength of self-control.

The research of Hui, Huang, Suher and Inman offers multiple insights for retailers as well as manufacturers to take notice of, and much more material for thought and additional study and planning. The video tracking approach reveals patterns and drivers of shopper behaviour in unplanned considerations and how they relate to planned considerations.  The methodology is not without limitations; viewing and coding the video clips is notably time-consuming. Nevertheless, this research is bringing us a step forward towards better understanding and knowledge to act upon.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Deconstructing the “First Moment of Truth”: Understanding Unplanned Consideration and Purchase Conversion Using In-Store Video Tracking; Sam K. Hui, Yanliu Huang, Jacob Suher, & J. Jeffrey Inman, 2013; Journal of Marketing Research, 50 (August), pp. 445-462.

(2) Innovations in Shopper Marketing: Current Insights and Future Research Issues; Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, & Eileen Kelley, 2011; Journal of Retailing, 87S (1), pp. S29-S42.

(3) See other research on path data modelling and analysis in marketing and retailing by Hui with Peter Fader and Eric Bradlow (2009).

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The digital transformation of retail banking is clearly apparent by now. The way consumers manage their banking accounts (e.g., deposits, savings, investments) and run their finances keeps changing by relying on digital channels and tools to perform more and more account operations.  Most dramatically in recent years, the organisation, design and function of retail bank branches is going through re-conception and change.

Two fundamental dimensions of this transformation may be detected:

(A) Away from a branch: Account operations are shifted to digital channels of direct banking detached from bank branches. That is, banking operations are performed more frequently without requiring customers to visit a branch (e.g., using an online web-based account-management platform or a mobile app), and furthermore without interacting with human bank representatives (e.g.,  talking by phone with a representative at a bank’s call centre).

(B) At a branch: The physical environment of a bank’s retail branch is transforming by re-allocating space, facilities and human versus digital resources at the branch between banking activities. This means distinguishing between banking activities that are performed in self-service by the customers using digital working-stations or ‘kiosks’, and activities that involve human bank professionals. The transformation is affecting the site of a branch all around, within the branch and areas next to it. A salient implication of this process is the elimination of human tellers within a branch; many of the ordinary account operations will be performed with minimal or no interaction with a bank representative within a branch or in adjacent areas. Interaction with human bank professionals will be mostly reserved to consultation and for purchasing more complicated bank services (e.g., loans) or financial products (e.g., investments).

Obviously those changes are not wholly new — customers are familiar with and use various self-service, direct digital channels, as they add-up, for different lengths of time (e.g., ATMs, enhanced digital information kiosks , websites, mobile apps). The current change is in acceleration and extent of utilisation of digital technologies: the frequency in which customers are using them; the degree of customers’ freedom in choosing between digital and human modes of service for any particular activity; the types of services or products that will be diverted to digital platforms (e.g., certain loans will be arranged without meeting a bank advisor in person, perhaps by video conference); and re-shaping the environment and activity in banks’ branches.

The article explores the digital transformation by reference to the five main banks in Israel. It will especially discuss how banks balance between the human and digital factors in serving their customers. Some additional aspects of the transformation will be explained in the course of this review.

To remove any doubt, it must be emphasised that all five banks are engaged in implementing digital self-service platforms and facilities in serving their customers and offering them financial products (in addition to the now ‘classic’ direct banking by call centres). They differ, however, in how they propose and plan to balance between their digital and human channels and modes of service.

The two leading banks in Israel (Bank HaPoalim [‘workers’] and Bank Leumi [‘national’]) seem to take the transition to digital banking the most seriously and most extensively. These banks compete neck and neck for many years, swapping between them the first and second market positions occasionally, yet both are distinctively greater in scale and market dominance than the three other main banks. Both banks appear to follow more closely on the vision of digital banking transformation conveyed last year by Dr. Hedva Ber, Banking Supervisor at the central Bank of Israel, and her projection of how this ‘digital revolution’ should proceed. Nonetheless, these two banks differ on some issues in their approach to implementing the transformation.

Bank HaPoalim is advancing an initiative to establish digital-reliant branches — five branches already exist, two of them in the Tel-Aviv area. Customers utilise tablets (iPads) or larger screens on table-tops to perform their needed operations in self-service in principle; they may ask, however, for assistance from a bank representative in the branch. There are no visible desks for personal meetings with banking advisors for consultation. The branch in northern Tel-Aviv, for example, is one large open space with long white desks in the centre, a large screen on the wall, and a sitting area with personal ‘working stations’ on the left side of the branch. It has a look resembling an Apple store, elegant and flashy. One cannot find in this space the traditional partitions where customers can sit for more private and intimate consultations with banking professional advisors. This digital branch is built on site of the old-model branch.

This is a rather radical move that may precede too early the formation of mixed branches recommended and applied in other countries as the core model. Indeed most of the bank’s branches (more than 260 in total) are still more traditional; the bank plans to reduce the number of its branches and replace some of those traditional branches with new digital ones. Yet by doing so the bank could miss an important stage of preparing the public for the change.

Bank Leumi is going in a somewhat different direction, encouraging its customers to utilise mostly its direct channels that do not involve coming to one of its branches. At the branches, the bank is in major progress to eliminate all its counters of human tellers; customers are referred to enhanced information kiosks (‘Leumi Digital’) that also allow for some account operations, and to ATM machines. These stations are located in a separate interim lobby area before entering the main hall of the branch, which is dedicated only to personal sittings with banking advisors. The bank is working overall to reduce the number of its branches (currently about 250).

The bank is taking a positive move in the right direction, and yet it is not complete because the bank does not truly mix digital with human service resources in the branch. What Bank Leumi is doing is more of a re-arrangement than genuine re-modelling. Indeed it eliminates the function of human tellers, but it does not integrate the digital and human modes of service in a hybrid model and design.

Many bank branches in the country have three ‘service areas’: (a) A couple of ATMs and digital kiosks outside the branch (i.e., on street front); (b) A few ATMs and digital kiosks in a protected lobby area that customers may enter and use also outside working hours of the branch; (c) A main hall of the branch where customers can receive service or consult more privately with bank representatives and professional advisors. Some branches may have a ground floor for assistance usually with the more basic functions and a second floor for consulting on more complex issues. Bank HaPoalim created a new branch version primarily reliant on advanced digital facilities; Bank Leumi eliminated human service for basic teller functions but keeps the digital facilities outside the branch per se — it does not welcome customers using those stations to enter inside the branch.

However, the intention of a new model being developed for bank branches is to entail a combination of digital and human modes of service working next to each other. In a common hall customers can use one of the digital working stations or sit with an advisor on any specific issue more complex and financially significant. A customer may use the digital station while standing or sitting on a couch, read materials on products and perform operations. He or she may also watch instructive videos on a large screen. It should be a much more convenient and pleasant setting than using the information kiosk machine. A bank representative should be available for guidance and assistance with the digital self-service stations. But when more serious consultation becomes necessary the customer can approach one of the expert advisors sitting in partitioned meeting corners. Digital and human channels are thus in immediate access close to each other.

  • Best examples of layout, design and organisation of the new form of bank branches around the world can be found in the website of The Financial Brand: Branch Design (also see their latest Design Showcase from Fall 2016). Give special notice to the mixture of self-service stations and private zones for consultation with bank experts-advisors within the branch.

Banks may build in addition to mixed primary branches also secondary smaller digital branches (e.g., in shopping malls) to provide a convenient, quiet and pleasant place for customers to work on their bank accounts vis-à-vis using a bank’s app on their smartphones. Being similar to the model of the new “Poalim Digital” branches, they are not supposed to come in place of a cross-mode primary branch. Likewise, offering working stations in a lobby, to be used almost any hour, adjacent to the branch is not supposed to be in place of a self-service digital zone within the branch with a human assistant  (formerly a teller) ready to guide if needed. Bank Leumi should not confuse the two types of self-service by digital means. Moreover, the bank must have a digital zone integrated in the overall design of the branch that will be welcoming, visually pleasant, convenient and friendly.

Two of the smaller main banks (Bank Discount and Bank Benleumi [‘international’]) maintain at large the traditional branch format and offer in parallel a variety of digital channels with their facilities (e.g., information  kiosks) and applications (e.g., website, mobile app). They do not make yet any clear or particular stand on the balance they see fit between the digital and human modes of service. Hence, while they make sure to be up-to-date on the technological front of digital direct banking services, there is no apparent major move beyond that which would reflect a more strategic approach to a desirable human-digital balance.

But then there is Bank Mizrahi-Tefahot that has chosen to take a more distinct approach to the digital-human balance by assigning greater weight to the human factor — more precisely, committing not to sacrifice human interaction in favour of digital channels. The bank may have thus found an important dimension to differentiate its brand from the competing banks.

The bank is aiming to solidify its position as the third largest bank in Israel, climbing one position up by pushing back Bank Discount. Bank Mizrahi-Tefahot currently operates about 150 branches, and contrary to the leading banks it plans to increase this number towards 200 branches. In September 2016 the bank launched an advertising campaign, emphasising human touch, with a tagline (translated from Hebrew):

  • “On the things really important, there is no substitute to humanity.”

It purports to persuade prospect banking customers (as well as its own current customers), who still seek and prefer human interaction, that at this bank customers will continue to be able to find a human representative to talk to. Billboard ad posters, displayed until recently, proposed that the bank will cater to consumers’ concerns as they complain to their banks as follows (exemplar statements translated from Hebrew):

  • “Is it no longer possible to talk with a human in this bank?”
  • “Enough with apps, give me a human” [to talk to] — the ad “answers” that if you want to talk to a human, call a specific number.
  • “You closed the branch on [X] street. Is only the ATM left now? What is happening with you?” (the original Hebrew phrase plays on dual meaning in using the word ‘closed’)

The bank implicitly commits to maintain human reference for customers on banking issues that matter more or less. Indeed the bank does not fall behind in offering a variety of digital facilities, applications and tools for customers to manage their accounts. Yet the bank steps forward to assure customers that addressing a human representative at the bank will not be sacrificed in favour of the digital direct channels. For instance, the bank offers customers the possibility to talk by phone not only with a human representative at the call centre but also with one’s personal banker (account manager) or advisor at the branch where the account is held, reached through a direct (seamless) phone extension.

Without undermining their commitment for human reference, Bank Mizrahi-Tefahot may still modify the way it delivers certain services (e.g., teller-type) with human assistance at a branch. A new model may involve a zone equipped with digital self-service stations but supported with stronger human presence or qualifications of bank assistants for customers than what may be offered in other banks. The human resources dedicated to fulfill these positions and the tasks assigned to them should be planned anew.

Of course promises have to be tested in the reality of customer service at the bank. The bank has to prove it can deliver on its commitment to make human representatives available to customers when necessary. A critical reason banking customers turn to direct digital channels is being dissatisfied with either the long time customers feel they have to wait to reach a human representative or the level of assistance they get (e.g., professional, efficient, courteous). Nevertheless, there always remain the more complex and significant issues in which customers may need more serious consultation and human guidance in making a decision and completing a procedure (and sometimes being able to negotiate terms), help they cannot receive adequately through a self-service digital channel. Trust in customer-bank relationships is also dependent on that.

With regard to the advertising campaign of Bank Mizrahi-Tefahot, an imminent question arises: Is the message delivered in this campaign backed by a more profound vision and strategic plan? In other words, one would want to know that the campaign stands on solid ground and is not only a marketing communication idea hanging-in-the-air. A second part of this article, soon to come, will address this question, and will also examine what strategic position and attitude take the other four banks on balancing between digital and human resources and modes of service.

Ron Ventura, Ph.D. (Marketing)

 

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