The Improvement and Combination of Offline Physical Stores and Online Sales Strategies is a New Trend
Name
Institution
Executive Summary
The advancement of technology has resulted in the development of e-commerce, which creates new opportunities for the fashion industry. Online marketing and retail channel offers new mechanisms to market and boost sales of brands. However, there is consensus among scholars that the online channels cannot eradicate the offline channels. Hence, there is a need for integration of the two channels. This research employs the qualitative research approach to examine the combination of online and offline platforms to enhance the competitiveness of brands in the fashion industry. The research utilizes a sample of 50 university students to explore their perceptions and thoughts about online and offline channels. The study revealed that a majority of the participant uses the online platform to access information about products and make the price as well as specification comparisons. Moreover, the survey demonstrates that a majority of the participants prefer offline platforms in the purchasing of products. The research concludes that the brands in the fashion industry must embrace the integration of offline and online channels through implementing the online-to-offline (O2O) approach to boost their competitiveness.
Table of Contents
Executive Summary2
Introduction4
Significance of the Problem5
Problem Statement5
Research objectives and Research Questions5
Literature Review6
Offline Marketing6
Online Marketing7
Role of Online Marketing in the Fashion Industry8
Relationships between Online and Offline Marketing10
Theoretical Framework12
Online-to-Offline Marketing12
Online-to-Offline Search Process Adoption Factors13
Online-to-Offline Purchasing Process Factors15
Impact of Online Marketing on Consumer Behavior16
Conclusion18
Methodology18
Research Methodology18
Data Collection19
Participants and Sampling19
Data Analysis19
Procedure20
Results20
Discussions25
Conclusion27
References29
Appendix33
The Improvement and Combination of Offline Physical Stores and Online Sales Strategies is a New Trend
Introduction
The increasing online purchase demand will fuel future development and growth across brands E-commerce sectors. As of 2019, there was almost no brand that did not operate online retail. Such an approach allows companies to have more opportunities that can improve their sales and increases their competitive edge (Smith & Zook, 2012). While online sales have become an essential aspect of fashion brands today, ignoring offline operations can be detrimental in the overall growth and profitability of a business. Both online and offline platforms offer customers unique experiences that may not substitute one another but complement each other. As such, the development of information technology promotes the development and integration of offline and online channels. Offline channels offer consumers opportunities to examine the quality of a product and make an instant purchase and assume ownership of the product. In contrast, online platforms cannot offer these features but the ability to search for a product, compare prices, and make a purchase at one’s convenience (Mittal, 2013). Integration of the online and offline business platforms promotes the sales and profitability of businesses since they complement each other to give customers exquisite shopping experience.
Significance of the Problem
The rising demand for online services seems to overtake the offline channels, but some of its features indicate the impossibility of eradicating the traditional platform. In this view, there is a need to examine the correlation between the online and offline channels and how they can be integrated to offer more opportunities to the fashion industry. Online channels provide lucrative opportunities for the fashion industry to market and sell its brands (Lin et al., 2013). However, there is a need to embrace the traditional platforms as well because they offer unique shopping experiences such as instant ownership of a product and the ability to examine the quality of a material. The integration of online and offline platforms is essential in the fashion industry because it plays a critical role in enhancing marketing and sales activities.
Problem Statement
The development of online businesses has significantly influenced the fashion industry. Several companies, such as Amazon has enhanced the ability of different brands to sell their products using online platforms. Moreover, individual businesses have developed their online platforms to sell their products. However, some companies have shifted from embracing both the online and offline platforms, and they only focus on the internet business. Therefore, this paper examines why the online platform cannot substitute the offline platform but can complement one another to enhance the growth and profitability of a brand in the fashion industry. As such, the paper evaluates the significance of the online to offline (O2O) retail method in the apparel industry.
Research Objectives and Research Questions
The primary aim of the research is to establish the most convenient marketing and sales approach for fashion brands. The research questions include:
What are the advantages and disadvantages of online and offline platforms?
How can brands establish the most suitable marketing methods which promote better integration, improvement, and enhance brand competitiveness?
Is online to offline (O2O) approach the most basic and beneficial method that increases product awareness through online activities and increase sales by driving consumers to physical stores?
Literature Review
The fashion industry has both traditional shops and online shops that are available to fulfill consumers’ purchaser interests. The plenty of choices that are available for the customers has caused a severe challenge for companies concerning the manner they ought to target consumers to sustain their competitiveness (Ashworth, 2012). After two decades of internet development as a vital promotional tool, intercompany business relationships have significantly shifted. Such technical changes did not only improve the mechanisms of promotion but also other aspects of marketing through electronic means. As a result, online marketing has emerged, and companies not only view it as a promotional tool but a new form of marketing (Magrath & McCormick, 2013). Companies have massively invested in online marketing and sales in developed countries. In countries such as the United States, it has become like a routine to make online purchases, particularly for apparel products.
Nonetheless, in countries such as India, people still depend largely on traditional stores like brick and motor shops. While in the recent past online shopping has become a craze, particularly among youngsters and teenagers, offline shopping is still considered way ahead in the fashion industry (Hua, 2016). In this case, fashion companies must integrate both online and offline marketing and sales in their strategies.
Offline Marketing
Throughout the continuous marketing growth and development by marketers and scholars have continued to develop new approaches and techniques, marketing definitions and ideas have also changed. In the 20th century, marketing was given a percipient description that is inherently more than advertising and selling (Smith & Zook, 2012). During this period, the tools used and the changes made were pushing marketing improvements into efficiency and perfection; thus, it created misunderstandings such as the view of marketing as a process of creating needs as opposed to value (Arikan, 2011). However, different scholars have outlined various aspects of marketing that are important to develop distinguished definitions of marketing. The Chartered Institute of Marketing illustrates that marketing the process of establishing, projecting, anticipating, and satisfying the requirements of customers more profitably. Such a process necessitates management decisions on pricing, promotion, product, distribution, and personal selling (Arikan, 2011). Offline marketing refers to the methods of advertising and selling using the mediums that are not connected to the internet. Its strategies primarily use offline mediums to develop the company’s awareness and its products as well as services (Smith & Zook, 2012). These campaigns include the use of print advertising, such as signs and billboards, radio, and television channels. However, while the offline marketing is the traditional form of sales and advertising, the changes in the technological world and the development of the internet have resulted in the integration of offline to online marketing. Srinivasan et al., (2016) argues that because it is almost a prerequisite for companies to have websites today, the offline marketing strategies are more tied to online efforts.
Online Marketing
Kotler et al., (2018) defines online marketing as the process of applying digital technologies with online channel forms such as email, web, and database to contribute to activities of marketing to achieve profitable retention and acquisition of clients through improving customer understanding and delivering integrated, targeted online communications that are aligned to their individual needs. Arikan (2011) illustrates that marketing is the process of keeping customers very close and forming strong relationships with them as well as ensuring that they are delighted and happy online. It involves a complex and dynamic dialogue where the customers are kept continuously informed with constant feedback.
Brogi et al. (2013) argue that online marketing continues to develop due to the changing online environment. Despite evolving definitions of online marketing, scholars agree that it is evolving and living alongside information technology’s development. Internet tools are considered essential and indispensable in the creation of online marketing understanding and concepts. Technically the improvement of the online tool directly enhances online marketing. Arikan (2011) illustrates that online marketing has created a massive opportunity for the fashion industry to showcase its apparel products to millions of people at a given time. Some of the online strategies include social media marketing, email marketing, search engine optimization, and conversion optimization. These platforms have created an avenue through which fashion companies can engage their customers (Kotler et al., 2013). For instance, Facebook has billions of users who make social media marketing very interesting. It exposes brands to a massive population at an affordable cost (Brogi et al., 2013). Therefore, online marketing is the marketing form of the future, and companies integrating it with offline marketing gain a tremendous competitive advantage.
Role of Online Marketing in the Fashion Industry
Online marketing, if it is used in the right way, can raise the sales of the company and improve brand presence resulting in more profitability. It makes the product or brand to be available to the target audience of the firm. Rathnayaka (2018) argues that online marketing, when done appropriately, can enhance brand awareness and boost sales. Internet marketing is significant in the fashion industry because it aligns the purchasing behavior and decisions of customers. Öztamur & Karakadılar (2014) increasing number of consumers, utilize social media and other internet platforms to determine the preliminary price and product research, which informs their decisions to make a purchase. Besides, online marketing enables businesses to create relationships with existing and prospective customers through low-cost, regular, and personalized communication, which is a significant departure from mass marketing (Rathnayaka, 2018). Online marketing is essential in the fashion industry since it introduces brands and their products to the customers as they create awareness. For instance, social media platforms improve access to a wide range of populations and offer opportunities to focus on a specific target market (Rathnayaka, 2018).
Primarily, an essential role of online marketing is the creation of personalized relationships with customers to retain and attract new customers. Online marketing allows personalization of offers to clients through the creation of a profile of their purchase preferences and history. Using such information, brands can inform customers about new arrivals based on their preferences to create customer loyalty and retention (Blázquez, 2014). Through online marketing platforms, companies engage consumers with after-sale services such as follow-up to thank and confirm the satisfaction of a customer. Besides, online marketing creates a platform where customers can engage a brand by submitting their comments and complaints. Through these activities, the relationship between a fashion brand and consumers is enhanced.
Online marketing plays a critical role in the fashion industry concerning making sales. It enhances businesses around the clock opening of companies without concentrating on the opening hours (Kawaf & Tagg, 2012). The products can be displayed, marketed, and sold to customers in a 24-hour operational framework. Online marketing helps apparel companies to overcome the distance barrier. A brand can sell their product across the country and in other countries without opening up local outlets. Companies only have to open online shops where customers can access their products and purchase them (Rathnayaka, 2018). However, companies require having a working relationship with delivery service companies to facilitate the delivery of purchased merchandise to the individual consumer.
Relationships between Online and Offline Marketing
The relationship between online and offline marketing can be understood best by analyzing the product, price, promotion, and place, which are the main components of marketing functions (Arikan, 2011). The product is defined in terms of both online and offline marketing. An online product is defined as the entity which is digitally encoded and digitally transmitted rapidly affordably and accurately. Offline product refers to anything that can be provided to a given market for acquisition or consumption that meets a need or want. The two products vary, and their market behavior is different. Besides, offline products tend to behave differently in the online market. Therefore, the overall marketing environment results in the creation of integrated products that necessitate an integrated marketing approach; thus, the need for integrated online and offline marketing.
In determining prices, a brand ought to consider different steps, including pricing objective, estimating the cost, establishing demand, assessment of competitors’ prices, and selecting price method and creating a price. On the other hand, online marketing prices are yet to be driven to marginal cost, and one price law does not hold. Mustafi, Jost, and Nguye (2011) argue that there are unique features that make innovations that are relative to offline marketing important. It is significant to access how the elements affect successful online pricing techniques. For instance, online markets are dynamic platforms where competitors and customers can access information to influence their decisions. Pricing in such markets are considered to be sensitive and flexible (Roberts & Zahay, 2012). To reach the target customers and overcome competition, a brand must develop innovative pricing strategies for online markets.
On the promotion function, online marketing is regarded as the leading and fastest-growing type of direct marketing. Online marketing is considered as an integral part of the promotional mix of any company. It offers additional marketing instruments that help boost offline marketing activities (Mustafi et al. 2011). Primarily, online promotion utilizes communication in the internet platforms to create awareness concerning a site and also catalyze traffic into it. Online marketing is also considered as a collection of promotional techniques that uses digital platforms, for instance, social marketing and search marketing. Roberts and Zahay (2012) argue that online and offline promotional tools boost one another.
The place in the online platforms comprises all virtual stores, while in offline marketing, it entails the physical stores. The online place has a significant impact on the overall online marketing definition. Walsh et al. (2010) claim that a computer in online marketing is the place, and the association between the supplier and customer is direct because customers are individually targeted. Mustafi et al. (2011) demonstrate that purchase, consumption, and distribution are critical elements in the definition of place. Some products exploit the three-element of place online while their others cannot. The product which cannot utilize the three components requires integration with the offline place to enhance their meaningfulness. Therefore, a combination of online and offline marketing is necessary for the fashion industry.
Theoretical Framework
Online-to-Offline Marketing
The online-to-offline (O2O) marketing model is key in locating customers online and influencing their visit to the real-world shops. The approach comprises of a combination of the traffic generator and payment model for merchants that promote offline purchasing. For instance, an online market cannot offer personalized designer apparel since one’s measures ought to be taken in an offline store.
On the other hand, offline markets enhance access to information concerning promotions and store locations. Hence, a complementary model that helps fashion businesses to attract additional customers to their physical stores is essential. Chiang, Lin, and Huang, (2018) argue that the increase of social network marketing has enhanced the ability of consumers to access preferential information concerning different products from the channels and make purchases from physical stores. Leung et al. (2016) argue that O2O marketing has become an integral topic regarding channel integration. Consumers tend to factor various issues that impact their choice of the most appropriate medium to use in their transactions. For example, customers seeking to access quick information often select online stores using their handsets. On the other hand, consumers who want to try or test a product will always visit a physical store (Chiang et al., 2018). In this view, the factors that influence consumers’ searching and purchasing behavior concerning marketing and purchasing are essential.
E-commerce is growing at a faster rate compared to other channels across the globe. Chain et al. (2018) argues that the chances of online mediums eliminating offline markets are significantly impossible because the retail industry has transformed into the new online-to-offline concept where the two channels share similar significance in attaining prosperity. In this case, brands that seek to enhance their retailing commerce are expected to learn about O2O and how it benefits the fashion industry. The fashion industry benefits from the O2O model to market and advertises its products online to target potential customers create awareness, and influence them to make purchases in the physical shops (Chiang et al., 2018). The O2O model advocates for the use of online platforms to expand brand popularity while becoming complements to the physical stores as opposed to competitors.
Online-to-Offline Search Process Adoption Factors
Yang et al. (2016) factor the availability of information concerning the product and establishes that the meaningfulness of the data impacts customers when selecting an appropriate channel for searching. The availability of information on online channels is the primary reason for customers to use them for hunting and selecting products. When consumers can access information that helps them make price comparisons in a channel, they often tend to do a search and purchase on the same platform (Sarkar & Das, 2017). As a result, consumers who factor the availability of information are likely to search for products using online platforms.
Media richness is another component of O2O that enhances marketing channels, which pass information to customers and assist them in making critical purchase decisions. Different scholars demonstrate that media richness significantly influences the way individuals search for product information. Gibson & Cantijoch (2013) illustrate that customers affected by media richness transform their intentions and always embrace online commerce to search for different information on a product. Both online and offline platforms offer a varying amount of media richness (Chiang et al., 2018). For instance, if customers want to access timely feedback as well as in-depth information on a product, it is easier to engage a salesperson in an offline store.
Consumers are also influenced by search convenience. A majority of consumers often search for a channel that can easily and quickly relay product information. In this case, online channels often provide faster outcomes concerning the search for information on a product. Moreover, the online platforms are very convenient since consumers can search for the information needed in the comfort of their homes or offices using their computers or mobiles. Studies illustrate that consumers’ choice of a channel is directly influenced by its convenience (Mahrous, 2016).
Consumers also factor the tangibility of the product. Chiang et al., (2018) argue that customers who do not buy products through online platforms do so since the online platforms do not give them access to assess the actual product quality. In this case, customers tend to evaluate the quality of the product at the physical store to minimize uncertainty. Besides, numerous researches demonstrate that tangibility is central in O2O marketing. Therefore, customers who consider product tangibility often tend to search for their products using offline platforms (Chiang et al., 2018).
Xiao & Dong (2015) argue that consumers are often concerned with how enjoyable a search process is when using a channel. Therefore, the platform that has hedonic aspects that enhances shopping experiences creates traffic. Different studied showed that consumers who are concerned with search enjoyment are likely to search for information in offline stores (Sarkar & Das, 2017). Consumers preferring to search for products in the stores often do so since they experience more pleasure in shopping and can get more face-to-face interactions with the staff compared to online platforms (Chiang et al., 2018).
Online-to-Offline Purchasing Process Factors
The product variety is one of the critical factors that consumers consider in the purchasing process. Shen et al., (2016) claim that when stores offer a high product variety, there are chances to attract more consumers who purchase products there. However, if a store provides assorted goods, customers may shift their purchase channels in reaction. Besides, promotion and price influence the purchase process of consumers. Anand et al. (2017) argue that costs are a significant factor that impacts on the choice of a platform to buy products. Studies have shown that consumers often use online platforms that promote products to make price comparisons and make purchases in physical stores (Chiang et al., 2018). Therefore, consumers who care about promotions and prices are likely to purchase using the online channel.
Purchase convenience is also essential to consumers when they are choosing an appropriate platform to buy a product. Sarkar and Das (2017) illustrate that consumer likes to purchase a product through a platform which offers quality and efficient services concerning purchasing process. Roberts and Zahay (2012) indicate that the acquisition of a product with minimal time and mental investment is essential to a customer. In this case, consumers prefer online platforms because it requires minimum time and stress. When a customer looks for a product in the offline store and does not find it, more time and energy will be spent in searching for the product in other stores. Therefore, consumers factor purchase convenience and influence their purchase through online platforms. The time of product possession may also affect the choice of a purchase platform. Research demonstrates that direct marketers often decrease the resistance of consumers to catalogs since it reduces the delivery time (Sarkar & Das, 2017). Customers may prefer offline purchases because they are guaranteed immediate ownership of the product, unlike the online channel, which requires customers to wait for it to be sent. In this case, customers concerned with immediate possession of a product are likely to buy using the offline channel.
The quality of sales service is also a crucial factor in choosing the appropriate channel to use in purchasing a product. Lin et al. (2013) claim that if a shop offers superior sales services, then customers may change their choice of a purchase channel. The service quality of sales comprises of assurance, responsiveness, reliability, empathy, and tangibility (Chaing et al., 2018). Consumers who factor the quality of services always purchase using offline stores since they offer superior sales services compared to online platforms.
Online purchase risk plays a critical role in impacting the decision of consumers to choose appropriate purchasing channels. The perception of uncertainty during the purchase process is considered high in online platform compared to the offline platforms. Chiang et al. (2018) claim that customers always change their buying channels due to different risks that influence their purchase decisions. Consumers may fear the loss of personal information control when using an online platform. Several surveys show that online purchase potential risks impact consumers’ channel choice (Sarkar & Das, 2017).
Impact of Online Marketing on Consumer Behavior
Consumer behavior refers to a particular code of conduct where customers are identified in searching for a product and purchasing it to satisfy their needs (Mazaheri et al. 2011). Consumer purchasing behavior is considered as an internal process that occurs in the inner mind of the consumer, and the decision on purchase is made based on the effect of the eternal and internal stimulus (Mittal, 2013). The online marketing platforms have made the availability of information extensive, and customers have become more powerful and knowledgeable since they can analyze information and make an informed purchase decision. As a result, enhancing the active presence and availability of information in the online platforms is essential in the business today (Mazaheri et al. 2011). The advancement of technology has resulted in the transformation of the traditional process of decision making among consumers into a more digitalized process where the use of the internet and digital platforms as a decision-making hub takes center stage (Rathnayaka, 2018). Indeed, the digital era has transformed the social trends that directly influence the changing behaviors of customers.
The dynamic and complex nature of consumer wants and needs drives marketers to change their strategies as well as to adapt to the new environments to satisfy the consumer. In the fashion industry, customers are finding new means of experiencing fashion purchases (Vinerean et al., 2013). Today, fashion customers have a variety of offline and online channels compared t to the past, which enhances their choice experiences, and marketers are capable of influencing their optimal use of digital channels. The fashion industry has developed over time to embrace the trends in work. The digital marketing culture has enhanced the ability of fashion brands to identify the preferences of consumers and how they are changing (Lee et al., 2011). Online marketing has created a platform where brands can engage consumers to identify and understand their preferences and needs. The online market has promoted customer intolerance since consumers can easily access other brands that may satisfy their needs. Besides, it has eroded consumer loyalty since customers can easily switch in the digital culture compared to the offline channels. Through the digital lifestyle, unsatisfied consumers can quickly destroy the brand reputation of a company within a short time. Therefore, companies need to be cautious and focus on offering superior sales service to overcome competition in the market (Rathnayaka, 2018).
Conclusion
While online marketing is on the rise, it is challenging for it to eradicate offline marketing and sales, particularly in the fashion industry. As such, it is useful when the two channels are integrated, as illustrated by the O2O model. The online and offline platforms are supposed to support one another based on the preference of the customers. The online platform promotes convenience and accessibility of information, but offline channels enhance immediate possession and superior sales service quality. Different consumers have different concerns and factors that influence their decision to use a given platform. For instance, the customers who care about tangibility, online purchase risks, and quality of service tend to use offline platform. On the other hand, customers who focus on the accessibility of information and convenience use online platforms. Therefore, fashion brands can implement the O2O model to ensure that customers can access data from the online platform about products and can also access the physical stores to make a purchase.
Methodology
Research Methodology
The research aims to create an understanding concerning meanings that participants constructed about online and offline channels. As such, a qualitative approach is the most appropriate approach since it reinforces the interpretation and understanding of meanings and the intentions affecting human interactions in businesses (Bengtsson, 2016). Qualitative research is selected because it is holistic and addresses the research question in entirety. Besides, it examines the relationships that exist in a system and concentrates on understanding in a given social setting. This research aims at understanding the experiences of customers when using the online and offline platform to inform better marketing and sales decision making among firms in the fashion industry.
Data Collection
The primary data collection approach used in the study was Interviews. The choice of interviews aimed to gain an in-depth understanding of the constructions of the participants regarding online and offline businesses. Flick (2017) illustrates that interviews are the most critical tools for collecting data. The interview utilized a questionnaire which had a total of structured questions. It was administered through an online platform to gain as much response as possible.
Participants and Sampling
The research targeted fashion customers. The target population was the university students due to their ease of access. The sampling method that was utilized was random sampling. Martínez-Mesa et al. (2016) define random sampling as a technique whereby each sample is considered t
