How to optimise your omnichannel approach? › wp-content › uploads › 2018 › ... · Lemon, K....
Transcript of How to optimise your omnichannel approach? › wp-content › uploads › 2018 › ... · Lemon, K....
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How to optimise your omnichannel
approach?
Dr. Els Breugelmans
SMA
8 oktober 2018
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Wie
• Els Breugelmans
• Hoofddocent KU Leuven (@Antwerpen)
• Faculteit Economie en Bedrijfswetenschappen
• Onderzoekseenheid Marketing Management
• Onderzoeksexpertise in Retail Management
o Online & multi-channel aankoopgedrag
o Getrouwheidskaarten
o Retailer-producent relaties
• Academisch onderzoek van bedrijfsrelevante
onderzoeksvragen
• [email protected]@ElsBreugelmans
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Jullie verwachtingen vandaag?
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Agenda
• Digitale (r)evolutie
• Wijzigingen in retailpraktijken
• Aankoopgedrag & customer journey – theorie
• Impact van digitale (r)evoluties op aankoopgedrag –
academische literatuur
• Uitdagingen en opportuniteiten voor ‘traditionele’ (vaak
fysieke) retailers
• Examples & Cases
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Digitale (r)evolutie
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Waar koopt u schoenen?
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In het verleden…
Traditionele retail
(brick-and-mortar)
Kopen
Offline
Orienta
tie
Offlin
e
Supply chain
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http://content.time.com/time/magazine/0,9263,7601980720,
00.html
Shaky start – dot-com bubble
(failures in the beginning)
But one thing for sure…
Internet & digital society is here to stay
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Digital changes in the market
“Always on”
“Personalized”
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Digital changes in the market – facts
http://www.nusport.nl/column/2491888/wes-twittert-ditisweldeechtetoch.html
Radio → 50 miljoen gebruikers (38 jaar)
TV → 50 miljoen gebruikers (13 jaar)
Internet → 50 miljoen gebruikers (4 jaar)
Facebook → 100 miljoen gebruikers (9 maanden)
96% van de Generatie Y (jongeren geboren na 1981) gebruikt social
media
><
=
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E-commerce = big
In-store = huge
FMCG (Belgium) = 1-2%
(growing 10x faster online
than offline)
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Meer dan 50% van de US offline retail sales zal beïnvloed worden door
het web op korte termijn
88% van consumenten zoekt online maar koopt in een fysieke winkel
(webrooming)
94% van de totale US retail verkopen gebeurt nog steeds in de fysieke
winkel
When is a purchase online vs. offline?
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What is impact of digital (r)evolution for
your sector/business?
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What is impact of digital (r)evolution for
your sector/business?
Changes in
retail practices
Changes in
shopping behavior
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Wijzigingen in
retailpraktijken
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Impact of digital era on retail practices
New Commerce / Business
models
New communication &
information possibilities
New technological possibilities
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New commerce / Business models
New business models (e-commerce)
Pure players
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New commerce / Business models
Traditional retail
(brick-and-mortar)
Online retail
(pure-play)
Buy
Offline Online
Orienta
tion
Onlin
e
O
fflin
e
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New commerce / Business models
New business models (e-commerce)
New companies (tech giants)
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New commerce / Business models
Supply chain
Platforms
(cybermediation)
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New commerce / Business models
Samenbrengen verenigingen &
sympathisanten: Geld
inzamelen voor je vereniging of
goede doel zonder dat het je
moeite of één eurocent extra
kost
Wij inspireren jou om nieuwe plekken te ontdekken. Kies bij ons uit een dagelijks wisselende selectie reizen, samengesteld door ons team van reisliefhebbers en lokale experts.
Cybermediation = new entrants that function as intermediaries
…
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New commerce / Business models
Supply chain
Cutting out the
middlemen
(disintermediation)
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New commerce / Business models
MANUFACTURER RETAILER
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New communication & information
possibilities
Personalized customer
experience
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New technological possibilities
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Make purchase decisions Communicate
Focus
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Aankoopgedrag & customer
journey – theorie
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Customer journey
• A series of touchpoints or interactions between the
customer and the service provider
Rawson, A., Duncan, E, & Jones, C. (2013), “The Truth About Customer Experience”, Harvard
Business Review, 91 (9), 90-98.
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Customer journey
• The many critical moments when customers interact with
the organization and its offerings on their way to purchase
and after
o Path-to-purchase
o Consumption
Rawson, A., Duncan, E, & Jones, C., “The Truth About Customer Experience”, Harvard Business
Review, 91 (9), 90-98.
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How does the customer journey for your
customer look like?
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Customer journey
• The many critical moments when customers interact with
the organization and its offerings on their way to purchase
and after
o Path-to-purchase
o Consumption
Rawson, A., Duncan, E, & Jones, C., “The Truth About Customer Experience”, Harvard Business
Review, 91 (9), 90-98.
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Path-to-purchase (1)
Problem recognition
Information search
Evaluation of options
Product choice
Post-purchase evaluation
Orientation
Asseal (1998), Consumer Behavior
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Path-to-purchase (2)
Asseal (1998), Consumer Behavior
Extended problem
solvingLimited problem solving
Habitual decision
making
Level of involvement
Perceived risk
Information processing
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Path-to-purchase (3)
Problem recognition
Information search
Evaluation of options
Product choice
Post-purchase evaluation
Orientation
Extended problem
solving
Limited problem
solving
Habitual decision
making
Asseal (1998), Consumer Behavior
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Path-to-purchase (4)
Problem recognition
Information search
Evaluation of options
Product choice
Post-purchase evaluation
Orientation
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Path-to-purchase (5)Problem
recognition in channel A
Information search in channel A
Evaluation of options in channel A
Product choice in channel A
Post-purchase
evaluation in channel A
Orientation of channel A
Search attributes of channel A
Purchase attributes
of channel A Post-purchase
attributes of channel A
Problem recognition in
channel B
Information search in channel B
Evaluation of options in channel B
Product choice in channel B
Post-purchase
evaluation in channel B
Orientation of channel B
Search attributes of channel B
Purchase attributes
of channel B Post-purchase
attributes of channel B
(A = offline)
(B = online)
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Verhoef, P., S. Neslin and B. Vroomen, “Multichannel Customer Management: Understanding the Research-Shopper
Phenomenon”, International Journal of Research in Marketing, 24 (2), 129-148.
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Types of touchpoints
Brand-owned Partner-owned
Customer-
owned
Social/external
/independent
…
…
…
…
Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,
Journal of Marketing, 80 (November), 69-96
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Customer journey
Explosion of touchpoints
→
Complex customer journeys
Heightened importance of
customer experience
Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,
Journal of Marketing, 80 (November), 69-96
Multi-dimensional construct that involves:• Cognitive• Emotional• Behavioral• Sensorial• Social responses to a firm’s offerings during the customer’s entire purchase journey
Iterative / Dynamic & individual-specific
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Lemon, K. and Verhoef, P, “Understanding Customer Experience Throughout the Customer Journey”,
Journal of Marketing, 80 (November), 69-96
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How does the customer journey for your
customer look like?
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Impact van digitale (r)evolutie
op aankoopgedrag
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How did purchase behavior change?
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Academic insights
Impact of digital?
Where we buy
if we go online?
How we buy? How physical
stores keep on
playing a role?
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Example 1: Change in how we buy
• Research-shopper phenomenon: the tendency of
customers to use one channel for search and another for
purchase
Verhoef, P., S. Neslin and B. Vroomen, “Multichannel Customer Management: Understanding the Research-Shopper
Phenomenon”, International Journal of Research in Marketing, 24 (2), 129-148.
Method:
Survey among 396
Dutch consumers (Loans, vacations,
books, computer,
clothing, and electronic
appliances)
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Traditional retail
(brick-and-mortar)
Online retail
(pure-play)
Offline OnlineO
rie
nta
tion
Onlin
e
O
fflin
e
Buy
Showrooming
(omni-channel)
Webrooming
(omni-channel)
Example 1: Change in how we buy
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Example 1: Change in how we buy
• Attribute-based decision making
o Attribute perceptions → attitudes → behavior
o One channel excels on search attributes, another on
purchase attributes
• Lack of channel lock-in
o High search attitudes do not translate in high purchase
attitudes
o Ease of “walking away” on the Internet
• Cross-channel synergy (complementarity of channels)
o Economic benefits
o Smart shopper feelings
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Example 1: Change in how we buy
What is the intention to use channel x for activity y
Search Purchase
Store 81% 84%
Internet 64% 13%
Catalog 47% 3%
How many channels were used in orientation stage?
27% used one channel
48% used two channels
25% used three channels
How many respondents engaged in research shopping: 76%
(research shopping: use of multiple channels for search and/or use of
multiple channels for search-purchase)
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Example 1: Change in how we buy
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Example 1: Change in how we buy
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Example 1: Change in how we buy
• 26.3% engaged in showrooming
o Most “popular” categories: clothing, shoes
• Finding a lower price online is not the only
reason for deciding to engage in
showrooming.
• Expecting to find a higher quality products
online and perceiving long waiting times for
getting help in offline stores are other reasons
for showrooming.
• Availability of in-store sales personnel!
Gensler, S., S. Neslin and P. Verhoef, “The Showrooming Phenomenon: It’s More than Just About Price”,
Journal of Interactive Marketing, 38, 29-43.
Method:
Survey among 556
US consumers (Clothing, shoes,
sporting equipment,
furniture, toys/games,
kitchen
supplies/appliances,
computers, TVs, audio
products and cameras)
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Example 2: Change in where to buy• When go online,
o Which online store do consumers choose?
• First online purchase: most preferred chain
• Once they gain experience: compare different chains
on assortment → switch to competitors
o Do they merely shift purchases from offline to
online channel (cannibalization) or do they
expand purchases (expansion)
• Indications of SoW expansion (attract purchases of
competitive chains)
• SoW expansion varies across consumers and chains
K. Melis, K. Campo, E. Breugelmans and L. Lamey “The Impact of the Multi-channel Retail Mix on Online Store Choice: Does
Online Experience Matter”, Journal of Retailing, 91 (2), 272-288.
K. Melis, K. Campo, L. Lamey and E. Breugelmans “A Bigger Slice of the Multichannel Grocery Pie: When does Consumers’
Online Channel Use Expand Retailers’ Share of Wallet?”, Journal of Retailing, 92 (3), 268-286.
Method:
Grocery shopping
data of 3,000+ UK
multichannel
shoppers
(Four supermarkets
offered an online
shopping venue)
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Example 2: Change in where to buy
• We find evidence of short-run business-
stealing effects of direct-to-consumer sales on
retail sales
• No long-run, lasting effect
• However, a sizeable share of retailers seems
to benefit from direct channel (larger
assortments, more brand expertise, online
presence)
M. Van Crombrugge, E. Breugelmans, K. Cleeren “Catching Friendly Fire: How Retailer Strength Influences the
Competitiveness of a Manufacturer Online Direct Channel on the Retailer Network”
Method:
Sales data of a
major player in the
toy industry (online
webshop, retailer
sales) for Belgium,
the Netherlands &
France
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Example 2: Change in where to buy
• Again, evidence of business-stealing (retailers
loose sales after the direct channel entry)
• Retailers increase prices & lower assortment after
the entry
o Protection & punishment
• Substantial variation across retailers & categories
o Financial & organizational power
o Distinction from online channel
o Competitive setting
M. Van Crombrugge, E. Breugelmans, K. Cleeren “Catching Friendly Fire: How Retailer Strength Influences the
Competitiveness of a Manufacturer Online Direct Channel on the Retailer Network”
Method:
Entry of first online
direct channel in
Belgian SDA market
Sales data, price
level and
assortment size of
all retailers where
brand was sold
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Example 3: Role of physical stores?
• Impact of a store opening for
fashion and home furnishing
retailer on existing sales
through catalogs and the
Internet.
Avery, J., T. Steenburgh, J.A. Deighton and M. Caravella “Adding Bricks to Clicks: On the Role of Physical Stores in
a World of Online Shopping”, GfK Marketing Intelligence Review.
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Example 3: Role of physical stores?
• Over time, catalog and Internet channel increasingly
benefited from the presence of the new brick-and-mortar
store
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Example 3: Role of physical stores?
• Few signs of cannibalization, many signs of synergy
o Physical stores act as billboard for the brand
o Increased brand awareness
o Support brand image
• Recommendation for an integrated channel approach
o Highlight cross-channel benefits (pick up, return
products)
o Communicate about all shopping channels
o Leverage cross-channel promotions
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Uitdagingen en opportuniteiten
voor ‘traditionele’ (vaak fysieke)
retailers
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E-commerce destroys physical stores?
Destructieve concurrentie
Challenges for retailers – scenario 1
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Challenges for retailers – scenario 1
3D printer
Products Services
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“Virtuele bril laat toe bestemming te ontdekken voor u boekt”
De Standaard, 18/11/2015
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Challenges for retailers – scenario 2
Physical retailers conquer the online market
Incrementele concurrentie
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Challenges for retailers – scenario 3
Physical retailers need to adapt ‘old’ value proposition
Disruptive concurrentie
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(Radicale) evoluties in de Retailing
“Retail zoals we die eeuwenlang gekend hebben, is dood.
Economische, demografische en technologische
ontwikkelingen hebben haar overbodig gemaakt.”
“We zitten vandaag in een overgangsperiode waarin retail
volledig wordt hertekend.”
Jorg Snoeck & Pauline Neerman, “The Future of Shopping”
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Omni-channel retail strategy
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http://manageyourmedia.eu/services/cross-channel-communication-strategy/
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Multi-channel vs. Omni-channelChannel focus
Interactive channels only
All customer touchpoints (interactive and mass-
communication channels)Channel scope
Retail channels only
&
Retail channels, mobile channels, mass communication
&
Customer Relationship Management focus
Customer-Retail channel Customer-Retail channel-Brand
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Multi-channel vs. Omni-channelChannel scope
Separate channels (no overlap) Integrated channels (seamless experience)
Channel Management
Per channel Cross-channel
Firm objective
Channel-level e.g., sales per
channel, experience per channel
Company-level, e.g., total sales, overall
customer experience
Customer experience
management
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Verhoef, P., P.K. Kannan and J.J. Inman, “From
Multi-Channel Retailing to Omni-Channel
Retailing: Introduction to the Special Issue on
Multi-Channel Retailing”, Journal of Retailing,
91 (2), 174-181
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Omni-channel definition
“The synergetic management of
the numerous available
channels and customer touchpoints,
in such a way that
the customer experience across channels and
the performance over channels
is optimized.”
(aka Phygital of onlife)
Verhoef, P., P.K. Kannan and J.J. Inman, “From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to
the Special Issue on Multi-Channel Retailing”, Journal of Retailing, 91 (2), 174-181
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http://www.economist.com/node/3810230, The Economist, March 31st 2005
“This new
consumer power is
changing the way
the world shops.”
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Or not?
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Cases & examples
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Omni-channel retail strategy – examples
• Move physical channel online
• Implement website that meets standard of pure players
• Get rid of online disadvantages
• Logistics
• Convenience > speed
• Product choice → Return policy
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Omni-channel retail strategy – examples
• Exploit offline presence
• Turn physical stores from a liability into an asset
• Make a visit exciting, entertaining, emotionally engaging
• and/or ultra-convenient and efficient
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Omni-channel retail strategy – examples
• Bring Internet to the physical world
o Digital experience should match store experience
o No technology because of technology, technology as
useful resource
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Omni-channel retail strategy – examples
• Become customer-centric in your thinking
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Case
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Case
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Case
VRT
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Case
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Wrap up
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Wrap up
• Digital (r)evolutions have changed retail practices &
consumer behavior
• Companies need to reflect on their current way of business
o Customer-centric thinking (customer journey)
o Focus on customer experience
o Omni-channel strategy
• Company >> Channel
• Physical stores can play an important role
• Ultra-convenient OR experience-driven
• Lots of uncertainty
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References
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References• Assael, H. (1998), Consumer Behavior and Marketing Action, 6th Edition.
Cincinatti, Ohio: South Western College Publishing.
• Avery, J., T. Steenburgh, J.A. Deighton and M. Caravella (2013), “Adding
Bricks to Clicks: On the Role of Physical Stores in a World of Online
Shopping”, GfK Marketing Intelligence Review.
• Gensler, S., S. Neslin and P. Verhoef (2017), “The Showrooming
Phenomenon: It’s More than Just About Price”, Journal of Interactive
Marketing, 38, 29-43.
• Lemon, K. and Verhoef, P (2016), “Understanding Customer Experience
Throughout the Customer Journey”, Journal of Marketing, 80 (November), 69-
96
• Melis, K., K. Campo, E. Breugelmans and L. Lamey (2015), “Multi-channel
Grocery Shopping: The Dynamic Impact of Online Shopping Experience on
Online Store Choice”, Journal of Retailing, 91 (2), 272-288.
• Melis, K., K. Campo, L. Lamey and E. Breugelmans (2015), “A Bigger Slice of
the Multichannel Grocery Pie: When does Consumers’ Online Channel Use
Expand Retailers’ Share of Wallet?”, Journal of Retailing, 92 (3), 268-286.
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References
• Rawson, A., Duncan, E, & Jones, C. (2013), “The Truth About Customer
Experience”, Harvard Business Review, 91 (9), 90-98.
• Snoeck, J., P. Neerman (2017), “The Future of Shopping”, Uitgevery Lannoo,
Tielt
• Van Crombrugge, M., E. Breugelmans, K. Cleeren “Catching Friendly Fire:
How Retailer Strength Influences the Competitiveness of a Manufacturer
Online Direct Channel on the Retailer Network”
• Van Crombrugge, M., E. Breugelmans, K. Cleeren and S. Neslin “The Impact
of Manufacturer Online Direct Channel Entry on the Level and Volatility of
Retailer Sales and Price“
• Van Ossel, G. (2014), “Omnichannel in Retail”, Uitgeverij Lannoo, Tielt
• Verhoef, Peter C., P.K. Kannan, and Jeffrey J. Inman (2015), “From Multi-
Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue
on Multi-Channel Retailing,” Journal of Retailing, 91 (2), 174-181.
• Verhoef, P., S. Neslin and B. Vroomen (2007), “Multichannel Customer
Management: Understanding the Research-Shopper Phenomenon”,
International Journal of Research in Marketing, 24 (2), 129-148.
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Contact Details
• Els Breugelmans
o Els Breugelmans
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Advantages for consumers
ONLINE
* Rich product information
* Customer reviews and
tips
* Editorial content and
advice
* Social engagement and
two-way dialogue
* Broadest selection
* Convenient and fast
checkout
* Price comparison and
special deals
* Convenience of anything,
anytime, anywhere access
…
OFFLINE
* Edited assortment
* Shopping as an event and
an experience
* Ability to test, try on, or
experience products
* Personal help from caring
associates
* Convenient returns
* Instant access to products
* Help with initial setup or
ongoing repairs
* Instant gratification of all
senses
…http://www.emarketer.com/Article/Heres-Why-Purchasers-Still-
Prefer-Brick-and-Mortar/1012128?ecid=SOC1001
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Advantages for consumers
ONLINE
* Rich product information
* Customer reviews and
tips
* Editorial content and
advice
* Social engagement and
two-way dialogue
* Broadest selection
* Convenient and fast
checkout
* Price comparison and
special deals
* Convenience of anything,
anytime, anywhere access
…
OFFLINE
* Edited assortment
* Shopping as an event and
an experience
* Ability to test, try on, or
experience products
* Personal help from caring
associates
* Convenient returns
* Instant access to products
* Help with initial setup or
ongoing repairs
* Instant gratification of all
senses
…http://www.emarketer.com/Article/Heres-Why-Purchasers-Still-
Prefer-Brick-and-Mortar/1012128?ecid=SOC1001