Multichannel Middle-Tier Shoppers Moderately

Marketers have launched multiple channels shoppers can use to buy items. Added to brick-and-mortar stores, paper catalogs, and telephone sales have been websites, mobile apps, social media, and online video platforms. Around a decade ago, studies of people’s purchasing habits began questioning a commonsense notion that retailers should always encourage shoppers to make use of as many of those channels as possible.
     Early advice included encouraging shoppers to prioritize coming into the store. It is there shoppers can touch items, and touching an item usually increases the urge to buy the item. In-store shoppers often enter a flow state in which they make impulse purchases. And when in-store, shoppers are less likely than when using other channels to do price comparisons with other retailers.
     Still, each of the other channels does have its advantages and fans. Now researchers at Maastricht University, NHL Stenden University of Applied Science, University of Groningen, and Boston College refine the advice about multichannel marketing. An overall finding is that middle-tier brands generally do benefit from encouraging shoppers to use a range of channels. Low- and high-tier brands experience flat or even negative effects on revenue.
     The researchers distinguished among the three tiers based on the customer’s primary motivation for purchase. With the high-tier, it is to signal status, wealth, and exclusivity. With middle-tier, it’s to attain maximum value for money spent. With low-tier, it’s to have adequate quality for minimum expenditure.
     The researchers’ explanation for the effects of tier is: 

• High-tier brand shoppers are concerned that multichannel availability could dilute the exclusivity of the item. In addition, these shoppers consider how traditional sales channels allow for higher-quality transactions. 
• For low-tier brand shoppers, price is most important, and there seems little advantage to exploring different channels for the same items in order to ascertain price. 
• Middle-tier brand shoppers are seeking the optimal combination of quality, price, and service. Different channels often offer a range of blends of these, so there’s an incentive for making use of multiple channels.

     Long-term brand reputation and how a marketer presents a brand will influence which tier the brand falls into. In addition, reputation of the retailer might exert an influence.
     Another finding from the studies is that moderate levels of multichannel usage generate higher revenues, while low and high levels reduce profitability. Based on this, the researchers caution firms that encouraging high levels of multichannel use will tend to have negative repercussions on revenue.

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