Location matters to online shoppers
Wharton School professor David Bell, whose specialist subject is digital marketing and e-commerce, has made headlines with a new book, Location is (Still) Everything, proclaiming consumers’ physical locations play a significant role in determining online shopping habits.
"What’s important is the location of the customers themselves relative to their offline options," Prof. Bell told The Washington Post. "Physical circumstances define your offline options and, therefore, the attractiveness of the online option."
Online purchases are significantly affected by which stores are near the consumer and whether they have "trendy and friendly neighbors," according to Prof. Bell.
Proximity also increases trust, as when eBay customers find their neighbors’ feedback more reliable than those of purchasers living further away, not least because selecting the same area to live in indicates similar tastes. "If you move to a new American city," inc.com concluded, "you will gradually adopt the brand preference of that city."
Prof. Bell’s advice to online retailers is to ensure that packaging is eye-catching so that neighbors (or better still, colleagues when packages are delivered to the customer’s workplace) notice what others are buying.
As to whether, and how, online retailers are using this information to improve targeting, he told The Washington Post that it can be done easily but "it’s just sort of on the cusp now." All orders contain zip codes so it’s easy to locate customers and see who else might be nearby.
"What’s really interesting is a lot of things spread purely through observation. And that’s why packaging and doing things to make the product public are really important. … You can’t succeed in the virtual world unless you understand where and how your potential customers are situated in the real one," Prof. Bell advises.
- "Location, location, location." How where you live influences how you shop online – The Washington Post
- Why location is (still) everything – Inc.
- Wharton at Work reading list – Wharton
Does it make sense that where people live influences where they buy online? What can retailers do to make online purchases more public so that they influence neighbors and colleagues?