International Journal of Retail & Distribution Management

Developments in information and communication technologies for retail marketing channels

Alexis K.J. BarlowNoreen Q. SiddiquiMike Mannion

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Alexis K.J. BarlowNoreen Q. SiddiquiMike Mannion, (2004),"Developments in information and communication technologies for
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Introduction

Developments in
information and
communication
technologies for retail
marketing channels

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Alexis K.J. Barlow

Noreen Q. Siddiqui and
Mike Mannion
The authors
Alexis K.J. Barlow is Lecturer in Business Information
Management and Noreen Q. Siddiqui is Lecturer in
Marketing, both at the Caledonian Business School, and
Mike Mannion is Dean, School of Computing &
Mathematical Sciences, all at Glasgow Caledonian
University, Glasgow, UK.
Keywords
Retailing, Information systems, Marketing strategy
Abstract
Online shopping is unattractive to many people, because they
prefer a fuller social interaction engaging senses other than
sight and sound prevalent in most online shopping channels.
Advances in information and communications technologies
(ICTs) will permit online multi-sensory engagement between
people, and between people and products, providing
opportunities for new marketing channels and enhancing
existing marketing channels. The aim of this paper is to
provide an overview for retail marketing managers of some
developments in ICTs that will enhance the online shopping
experience, so that they can make informed choices when
designing their marketing strategies.
Electronic access
The Emerald Research Register for this journal is available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0959-0552.htm
International Journal of Retail & Distribution Management
Volume 32 . Number 3 . 2004 . pp. 157-163
# Emerald Group Publishing Limited . ISSN 0959-0552
DOI 10.1108/09590550410524948

A retail marketing channel is a structure linking

a group of individuals or organisations through
which a product or service is made available to a
consumer at the right place, quantity, quality
and price (Brassington and Pettitt, 2000).
Channel selection is a major decision for
retailers (Omar, 1999). Retailers distinguish
between marketing strategies that provide
consumers with multiple channels where each
channel is organised and run as an independent
structure, and marketing strategies that provide
consumers with a cross-channel service that
integrates and exploits complementary facilities
offered by different channels. Offline retail
marketing channels include in-store,
telephone, mail order, and direct selling. Online
retail marketing channels, made available
through modern information and
communication technologies (ICTs), include
ATM/kiosk, interactive television, mobile
phones and the Internet, which is normally
accessed by desktop and laptop computers and
personal digital assistants (PDAs).
Research indicates that consumers are
currently using three or more channels, to
research and purchase goods (Zygon, 2002). In
Shop.org (2001) it was reported that:
.
in-store consumers who buy online from a
retailer spend about US$600 more annually
than those who are just in-store consumers;
.
multi-channel consumers purchase four
times more frequently than the average
online consumer; and
.
multi-channel consumers purchase from a
retailer's store 70 per cent more frequently
than the average in-store consumer and 110
per cent more frequently from a retailer's
catalogue.
The challenge for retailers is shifting from
answering why to develop multi-channel
strategies to how and when to develop
multi-channel strategies. The goal is to
seamlessly integrate their offline and online
operations, allowing consumers to purchase
products in the way that suits them best.
Online shopping is currently valued at
3.3 billion, representing 2 per cent of all retail
sales, and is anticipated to grow to 10 per cent
of retail sales by 2009 (Verdict, 2001). The

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Alexis K.J. Barlow, Noreen Q. Siddiqui and Mike Mannion

current growth in Internet shopping is 15 times

faster than that of general retail sales (IMRG,
2002). However, whilst the predicted increase
in online shopping is significant, many people
do not engage in online shopping. Part of the
reason for this is that their social interaction
needs in the shopping experience are not met by
current online shopping technologies. These
technologies primarily use sight and sound. Full
social interaction requires other senses to be
engaged. New advances in ICTs will permit an
online shopping experience in which there is
multi-sensory, person-to-person engagement,
and between people and products, providing
opportunities for new marketing channels and
enhancing existing marketing channels. The
aim of this paper is to identify desirable
characteristics of social interaction that are
missing from online shopping and to describe
some developments in ICTs that will address
these characteristics, so that retail marketing
managers can make more informed choices
when designing their marketing strategies.

Marketing channels
For a consumer, channel selection decision
varies according to their desire to browse online
and/or offline, purchase online and/or off-line,
or a combination of both (KaufmanScarborough and Lindquist, 2002). These
choices in turn depend on many factors
including product, type, price, place and
previous customer experience, using those
channel combinations. In efforts to offer
consumers an online/off-line choice many
retailers have utilised the Internet to develop
one or more marketing channels in response to
peer pressure rather than any strategic
marketing planning (Doherty et al., 1999) and
have failed to maximise the potential of ICTs
(Brady et al., 2002). Evidence emerging from
different studies (e.g. Dholakia and Uusitalo,
2002) about online shopping reveals that some
desirable characteristics of the in-store
shopping experience are not being provided by
online shopping technologies, thus
discouraging many consumers from shopping
online. One important deterrent to consumers'
use of the Internet for product purchase is the
lack of a range of sensory experiences available

within this medium (Philips et al., 1997). The

most notable omissions are support for
person-to-person communication and product
engagement. In both cases a common theme,
that Parsons (2002) argued, is that consumers'
multi-sensory stimulation needs were perceived
as unlikely ever to be met by online shopping.
Person-to-person communication
Swaminathan et al. (1999) observed that many
people have a strong desire for social interaction
in their shopping experience, e.g. with a retailer,
or being with or surrounded by other
consumers. Retailer-consumer and
consumer-consumer communication involves
exchanging enquiries, concerns and feedback,
using a range of verbal and non-verbal sensory
cues, e.g. speech, hearing, touch, gesture. The
combination of cues provides information
about the mood of a person's communication
and allows a personalised response. However,
current online shopping technologies permit the
use only of sight and sound, constraining the
understanding of a person's mood. From a
retailer's perspective sensing a person's mood is
important for developing trust, for offering a
personalised service, and through such service
building consumer loyalty.
Product engagement
Childers et al. (2001) identified that many
people are more likely to engage in online
shopping if it is an enjoyable experience. Part of
that enjoyment is the opportunity to undertake
personal examination of the products being
browsed and purchased. This is primarily
because many products have attributes such as
weight, texture, and firmness that are important
contributory factors to the purchasing decision.
Other products require a combination of senses
to be engaged before reaching a decision on
purchase, e.g. restaurant choice is determined
using eyes, ears, and nose.
Table I illustrates which senses can be used
by a consumer in existing off-line and online
channels to engage with other people and a
product during their shopping experience.
In-store channels allow a consumer to use a
combination of senses simultaneously. A
consumer can be in a supermarket, tasting and
smelling a new range of product, e.g. cheese,
whilst simultaneously asking a retailer about the

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Alexis K.J. Barlow, Noreen Q. Siddiqui and Mike Mannion

virtual; augmented. Figure 1 shows the range

and nature of the person-to-person
communication and product engagement in
today's current reality, in virtual reality, and in
augmented reality. The top axis shows the
technologies that are and will be used.

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Table I Senses, person-to-person, product engagement communication

Body sensor

Person-to-person

Product

Eyes
Ears
Mouth
Nose
Hands

In-store, online
In-store, online, telephone
In-store, telephone
In-store
In-store

In-store, mail order, online

In-store, online, telephone
In-store
In-store
In-store

ingredients. By using multiple senses the

consumer can build a fuller picture and evaluate
products more easily. Consumers can build up
multi-sensor interaction with retailers and other
consumers, leading to rapport, trust and the
ability to direct conversations more closely
towards their current information needs. By
allowing all the senses to be engaged with other
people and products, consumers are able to
participate in a fuller, more rewarding shopping
experience.
Mail order enables consumers to view 2D
pictures of products, e.g. clothes, music, airfresheners, but prevents them from touching,
listening or smelling them. It also prevents
consumers from having person-to-person
interaction. A telephone also has limitations.
Consumers are unable to view a retailer or a
product, or view, taste or smell, but they can
verbally interact with people or listen to
appropriate products. Similarly the senses are
restricted in online marketing channels.
Products and people can be viewed online.
Product demonstrations can be listened to, e.g.
CD sound-tracks, using pictures and video clip
recordings. However, you are unable to verbally
interact with people or taste, smell or touch
products. This can be very frustrating for a
consumer and can lead to an unsatisfying
shopping experience.

Information and communication

technologies for online shopping
There have been significant advances in ICTs,
especially the increase in desktop and laptop
computer processing power, which is doubling
every 18 months. The readily available access to
fast network communications and the realism of
computer graphics have significant implications
for online shopping. These technologies allow
us to distinguish three states of reality: current;

Current reality
Today the most common form of online
shopping approach is a consumer using a
personal computer (desktop or laptop), PDA or
a mobile phone to access a retailer's Web site
through the Internet, e.g. Amazon.com
Typically communication is by e-mail, text
message or in a chatroom. Products are
described using pictures and text.
Mobile phones and PDAs are leading
advances in current reality because they are
simple to use, cheap and reliable. The main
difference between second generation (2G)
(currently in widespread use), third generation
(3G) and fourth generation (4G) mobile
phones is the rate at which digital data can be
transmitted to and from the phones. A
simplified characterisation is that only text and
sound are supported on 2G phones; text, sound
and pictures are supported on 3G phones; and
text, sound, pictures and moving pictures are
supported on 4G phones. Photo messaging on
3G phones and video messaging on 4G phones
are being used to enhance the in-store shopping
experience by permitting pictures of goods, e.g.
clothes to be sent to out-of-store friends, who
can offer advice before the purchase is made.
Mobile phones intermittently and repeatedly
send a signal out, trying to contact their nearest
base station, making both the mobile phone
operator and the mobile phone aware of the
phone's location. Such location awareness can
be exploited by a retailer in the same vicinity as
a consumer by sending the consumer real-time
information. For example, a nearby coffee store
may have a special lunch-time coffee-andsandwich offer, send out this information to all
consumers in the area, receive a consumer order
in advance, receive payment in advance on the
mobile phone and have the coffee waiting on
the consumer's arrival. Banks are now
permitting customers' mobile phones to be
topped up with cash from automated teller
machines.

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Figure 1 ICTs and online shopping

In the current reality most retailer Web sites

suffer from an inability to satisfy the many
heterogeneous needs of their consumers. To
address this some retailers offer a
personalisation service. This service falls into
two categories (Wells and Wolfers, 2000):
offering a consumer a capability to customise
the Web site themselves or, more commonly,
the retailer doing it for them. Both approaches
are typically achieved by adapting the content of
a Web site (Billsus et al., 2002), adapting the
presentation style (Andre and Rist, 2002) or
adapting the navigation support based on the
consumer's navigational behaviour on a prior
visit to the Web site. When a retailer
personalises a Web site, whilst many of these
adaptations are carried out based on
information provided by a consumer, the
consumer is often unaware of what information
they are providing or how it might be used.
Kobsa (2002) draws attention to the need for
automatic personalisation to be undertaken
within the constraints of privacy legislation. As
far as we are aware there is little research on
personalisation using virtual or augmented
realities.
Virtual reality (VR)
State-of-the-art computer graphics can now
render static objects, e.g. a coat, and animated
objects, e.g. a model walking wearing a coat,
with such realism that it can be difficult to
detect the difference between computer-

generated objects and photographs or moving

pictures, thus justifying the term virtual reality.
VR is the simulation of a real or imagined 3D
environment that can be experienced visually
and interactively in full real-time motion with
sound and with tactile and other forms of
feedback. To be immersed in VR means to be
able to physically engage with virtual objects in
a virtual world. Person-to-person
communication in virtual reality can mean two
people (retailer-consumer or consumerconsumer) in different parts of the world being
in the same virtual store, e.g. two friends, one in
London, one in Sydney, browsing in a virtual
ladies' fashion shop, talking to each other as
well as gesturing and touching hands. An
extension of this idea is to introduce an avatar
(Luciano et al., 2001), which is a virtual human
being, e.g. a virtual retailer in the ladies' fashion
shop. In a virtual collaborative shopping
environment consumers will engage with retail
and other consumer avatars such as friends or
advisers. For example, Marks & Spencer have
undertaken a trial using an in-store 3D avatar,
known as Lisa, to encourage the use of selfservice check-out and respond to consumers'
questions through an interactive touch screen
(Retail Week, 2003). Product engagement can
mean that online people can feel the same
virtual products, e.g. clothes.
VR is achieved through wearable
technologies, which are additional computer
hardware devices that can be plugged into

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existing computers to provide immersion into

3D virtual worlds. The most common devices
are a head-mounted display and data gloves. A
head-mounted display is a portable viewing
screen that adds depth to otherwise flat images,
giving a 3D image. Most head-mounted
displays are the size of a motor-cycle helmet and
weigh several pounds, so an alternative is a fixed
viewing box, against which you place your
forehead against two eyeglasses. Data gloves
offer a means of issuing commands using
gestures (which can be difficult if you are
wearing a head-mounted display), such as
asking to see a virtual mannequin draped in
another fabric. In addition a range of haptic
(force or tactile feedback) technologies allows a
user to touch, feel, manipulate, create, and/or
alter simulated 3D virtual objects. Many
feedback devices emulate the natural feeling of
touch by using small sensors to lightly pull and
stretch the skin with a strength that matches the
tactile feel that one would get from a real object.
The ladies in London and Sydney stroking a
virtual coat would experience the same
sensation as stroking a real coat.
Person-to-person communication can be
through a virtual handshake. Also emerging are
digital smell output devices that can plug into a
computer and offer, for example, a whiff of
fresh chocolate cake or coffee.
Augmented reality (AR)
This refers to interfaces in which virtual objects
are superimposed on real objects. Augmented
reality can be achieved using a mobile wearable
computer (Ditlea, 2000), worn in a belt around
the waist and plugged into a mobile phone.
Advances in miniaturisation mean that
wearable, mobile phone and PDA technologies
will converge, becoming smaller, lighter and
less obtrusive. For example, in future some
small computers will be worn as jewellery. A
display is held over one eye, held in place by a
headset (or built into spectacles) and a small
keyboard is attached to the forearm (though in
future it may be knitted into the sleeve).
Commands are typed or spoken into a
microphone. Wearable computers offer
information to people who want their hands
kept free, either for personal preference or
because they are engaged in some form of
manual task, but they still want to shop. For

example, a stranger to London looking for

Oxford Street can be given directions using a
map on a 3D display in their headset, using
information from their mobile phone which can
detect where they currently are. Person-toperson communication in AR can mean a
consumer being physically in a store on their
own but needing the comfort of a friend and
being able to interact with a video image of a
real friend, or with an avatar, to ask for support
or advice. Product engagement can mean being
able to touch a coat and immediately see
product information, e.g. price, fabric type,
wash-details superimposed on the coat in a
virtual display. Alternatively, by inserting your
smart card, containing details of your virtual
mannequin, into a smart card reader attached
to a rack of coats, you will be able to see how
each of these coats looks on you, without
queuing to use a fitting room. (Koontz and
Gibson, 2002) offer other examples for
augmented reality merchandising.

Implications for retailers

In 1996 most store-based retailers were not
fully committed to exploiting online shopping
as part of a multi-channel strategy (Jones and
Biasiotto, 1999). By 2005 it is anticipated that
64 per cent of UK top 100 retailers will be
offering multi-channel options, which will
include online channels (Davies, 2002). From a
historical perspective this shift is not too
surprising, because many new technologies
often take between ten to 20 years to move from
invention, through innovation to general
adoption. It has taken almost ten years for the
Internet to be regarded as a mainstream retail
channel, because retailers have struggled with
the many technical and management challenges
and opportunities it presents, whilst consumers
have been simultaneously learning and adapting
how to exploit the additional choices it
provides. However, now that the underpinning
technology base has stabilised and become
more robust, and the population of
technology-confident consumers is rapidly
increasing, we are coming towards the end of
the first generation of online shopping. A new
generation of online consumers is emerging that
not only expect retailers to have an Internet

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Alexis K.J. Barlow, Noreen Q. Siddiqui and Mike Mannion

presence as part of a multi-channel retail

strategy but are demanding an online shopping
experience which is engaging, interactive and
memorable (Breitenbach and Van Doren,
1998), providing opportunities for dialogue,
conversation and relationships (Rolf, 2003).
The current development in ICTs described in
section three can address these needs and,
although models of introduction and
integration will vary across retailers and evolve
over time, there is some evidence from firstgeneration online shopping that it pays to
embrace new approaches earlier than later to
gain competitive advantage.
Tesco initially created a Web presence in
1996 but did not realise a major shift of grocery
shopping over the Internet (Reynolds, 1997).
However, by 2000 it became the world's largest
online grocer in 2000 (Mintel, 2000) and in
2002 its online shopping service generated
447m in sales with profits in excess of 12
million (IMRG, 2003a). It is the only
supermarket in the world to make money on its
online business (Pfeifer, 2003). Tesco
continues to embrace new technologies and has
developed mobile shopping, allowing
consumers to shop online, in any location, by
downloading Tesco.com on to any pocket PC
(Retail Technology, 2002). Tesco have utilised a
model of in-store picking to overcome one of
the major battles for retailers, which is the
development of a delivery infrastructure.
Tesco's multi-channel model integrates the
fixed store, Internet and mobile technologies.
Argos, a store/catalogue retailer, developed a
Web presence in 1995 but after nine months
had only sold 22 items online (Reynolds, 1997).
By 2002 online sales reached 140 million. In
2002 Argos launched a ``text and take home''
service, which allows shoppers to check prices,
stock availability and reserve goods using the
text service on their mobile phones (Retail
Week, 2002). Within one month of the launch,
Argos had received 46,000 text reservations,
complementing existing reservation systems
over the phone and the Internet (IMRG,
2003b). Argos has developed a multi-channel
model, which integrates the fixed store, print
catalogue, telephone, Internet and mobile
technologies. In today's highly competitive
retail environment, retaining customers may be

regarded as more important that winning new

ones.
Amazon.com established its presence on the
Internet, selling books, music and videos in
1995. It took almost seven years for Amazon to
post a profit in January 2002 (Regan, 2002),
demonstrating a need for all retailers, physical
or virtual, to learn the difficult characteristics of
this medium and optimise the potential that it
presents. Amazon have now extended their
merchandise range to offer electrical products,
kitchens and clothes, they have online auctions
and have developed a large number of affiliates
and sponsors online.

Conclusion
To increase the number of multi-channel
consumers, retailers must enhance their online
shopping experience to attract and engage
people who prefer a fuller social interaction
when shopping. The advances in ICTs
described in this paper, most of which will be
commercially available within ten years, can
galvanise online shopping by permitting online
multi-sensory engagement between people, and
between people and products, providing
opportunities for new marketing channels and
enhancing existing marketing channels. The
challenge for retailers is the timing of
introduction and successful integration of these
technologies into their everyday multi-channel
retail offering to ensure that what can be seen,
heard, touched, and smelt is what is actually
delivered. Without that correlation trust will
break down and virtual augmented reality
channels will lose their credibility. There is
some evidence that the early adopters gain and
maintain competitive edge.

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