ROPO Effect

Is Your Business Missing Out On The ROPO Effect?

A quick glance at the modern highstreet reveals just how much the retail landscape has changed in the past decade. Music shops, travel agents and book stores are just three types of retail markets that have become almost extinct in towns and cities across the UK. Traditionally the media has laid the blame for the decline at the doorstep of the recession.  However the impact of disruptive technologies, and with it the huge rise in online retailing, has arguably had a greater effect on changing the buying habits of consumers than the contraction of credit and spending. The ease at which you can browse and buy DVDs and books through an online retailer such as Amazon and have them delivered the next day was always going to reduce in-store retail sales in relevant markets.

Conversely, there are some markets that have traditionally been less vulnerable to direct online sales. Grocery, furniture and clothing are a few of the markets that have witnessed less of an impact from online sales. In the main, if you want to purchase a new suite of furniture you probably want to test out a few in actual physical store, and most people still do the vast amount of their weekly food shop in-store. However, while it is safe to say that consumer behaviour and purchasing affects certain markets more than others, it would be a very costly mistake for retailers who don’t seek to sell online to ignore the impact of the internet on their businesses.

The Growth of ROPO

While many SMEs have been slow to make the connection between offline sales and online research, their customers haven’t. Consumer research online to purchase offline, known in the retail industry as ‘ROPO’, is now an important part of the purchasing process for many consumers. According to a European study by GfK and Google across various sectors, including clothing and banking, 50% of internet users have researched and compared products online, while 40% of offline buyers have conducted online research prior to purchase. Google also highlight their own independent findings demonstrating that in-store sales influenced by the internet across the US have doubled in the past six years. Earlier this year, global market research firm TNS confirmed the ROPO trend and also revealed 40% of consumers now navigate social networking sites in search of user commentary and product reviews. Steve Hamilton-Clark, CEO of TNS said, “There is a rising demand by consumers across most markets to keep up-to-date with their brands of choice. For some the motivation is promotions and offers, for others it is about access to general information and a deeper feeling of brand proximity.” 

Impact on Business

So how does the ROPO effect impact on modern business and retail? Well just consider how the consumer browsing process has changed in the past decade. Consumers now have much more choice to shop around and buy the most suitable product at the best price. The time-poor, information rich consumer has cut down on window shopping by conducting research online before they venture out to make physical purchases.

Search engines such as Google have a huge impact on the consumer research process as they will often be the main source for consumers seeking information about products and services.  A modern consumer journey for buying a suit or a car will often start on a search engine with the customer searching relevant search terms for example ‘men’s suits Belfast’ or ‘VW Polo Northern Ireland’. If you are a B2C business and are not visible in search engines for relevant keyphrases, then you have a problem. If consumers are actively searching for products or services relevant to your business and your competitors have much more online visibility it’s certainly an issue you have to address. Good use of search engine marketing including Google AdWords and search engine optimisation will ensure you are targeting people researching online.

But there is no point being dominant in search engines if you have a poor web experience that leaves potential customers with more questions than answers.  I think this is an area where retailers, particularly small local retailers fall down pretty badly as they will often have a limited website with very little visual information on their product range. Their poor web presence and lack of content becomes a greater problem when you consider the huge investment their bigger brand competitors are likely to have made in recent years.  The rising impact of ROPO means it’s essential for all retailers to highlight their stock range online through proper descriptions, price and availability and visual content such as photos and videos to encourage consumers to visit the store.

The ROPO effect is set to increase as consumers use a mix of search engines and price / product comparison websites to carry out research.  The challenge for business is to map out how digital technologies and new consumer behaviours affect their businesses and how they can exploit them. There is certainly huge scope for targeting relevant consumers researching online and encouraging them to spend in your store.

Author: Paul McGarrity is Director of Octave Online Communications, an internet marketing consultancy helping businesses benefit from online marketing strategy and campaigns.

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