Online outlet shops

According to the past studies of consumer behaviour, consumers’ choice of retail outlets is influenced by their own shopping preference for a particular product. Consumers usually choose to shop online to get better-valued products, but they would also purchase at stores to minimize the purchase risk (Bhatnagar et al., 2000; Korgaonkar, 1982). The field of fashion and luxury items is often categorized in the high purchasing rate area, however, online outlet shops like “BrandAlley”, which is famous for its fashion and designer sales, are still very popular among the consumers. The compliance tactics used by BrandAlley will be analyzed, which also applies to most of the other luxury online outlets.

Price is often related to the quality of the product (Monroe and Petroshius, 1981), and higher priced items are usually also indicators of higher social status (Veblen, 1965). Social status symbols can be explained by the rules of “liking’ and “social proof’. BrandAlley’s target group of consumers can be largely divided into two groups: people who want to process a designer item but wouldn't like to spend as much money, or the smart buyers, who tend to purchase the item for the sake of it being discounted. These two groups are highly interactive.

One simple tactic that is used a lot on the website is “scarcity”. It is heavily advertised with those massive pressuring signs everywhere (ENDS ON 2ND FEB!), and I have to admit that it works, at least for me. Also, once you have chosen an item, a red warning would appear saying “this item will be in your basket for 20 minutes”. This indicates the uniqueness of the product perfectly without saying too much. Moreover, as a costumer you’ll have to sign in or sign up to view the items, which naturally means that you will have to be a member of it, the tactic of commitment?

Another very obvious tactic being “contrast”, contrast of the original prices and discounted prices. According to the study of Schindler (1989), consumers’ satisfaction increases with the increase of the discount. The online shop has also used the “referral” tactic: “10 pounds off your next shopping when you recommend us to a friend!”

The effect of “mere exposure” might as well contribute to the profit of the shop. Once you become a member, you are very likely to receive their weekly (or even daily) emails and just by checking the emails (or deleting them), one may find it easier to accept deals from the shop simply because it is exposed to you more than the others.

References:

Bhatnagar, A., Misra, S. and Rao, R.H. (2000), “On risk, convenience, and internet shopping behavior”, Communications of the ACM, Vol. 43, pp. 98-105.

Korgaonkar, P.K. (1982), “Consumer preferences for catalog showrooms and discount stores: the moderating role of product risk”, Journal of Retailing, Vol. 58, pp. 76-88.

Monroe, K.B. & S.M. Petroshius. (1981). ‘Buyers’ subjective perception of price: An update of the evidence’. In: T. Robertson and H. Kassarjian (eds.), Perspectives in consumer behavior. Glenview, IL: Scott, Foresman. pp. 43-55.

Schindler, R.M. (1988). The role of ego-expressive factors in the consumer's satisfaction with price. Journal of Consumer Satisfaction, Dissatisfaction, and Complaining behavior, 1, 34-39.

Veblen. T., 1965. The theory of the leisure class. New York: A.M. Kelly. (Original work published 1899.)

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