ropo-effect-opportunity-or-threat

The ROPO effect – opportunity or threat for e-Commerce?

21.04.2017 / / E-Commerce

Sales is a business in which the most important issue is the purchase itself and a satisfied customer. New technologies have penetrated the shopping reality for good and most of us can not imagine a different way to make a purchase than online. Such a tendency began a few years ago, and as everyone knows, everything begins to change and evolve over time. The broad possibilities and availability offered by the Internet now allow us to search not only products themselves, but also information about them. This phenomenon initiated the so-called ROPO effect (Research Online, Purchase Offline).

ROPO – what exactly is it?

It is nothing more than a process that involves searching for a product, information about it and opinions on the Internet (online), and ultimately making a purchase at a stationary store (offline). We can also encounter the term webrooming, which is also often used in describing the phenomenon of ROPO. Specifically, this means that consumers will consult their decisions via the Internet before making a purchase, or make decisions based on the ads they’ve seen before. In the case of online searches, this is usually done using Google search engine but it is not the only source of information for consumers. Considering constantly developing media in Poland, sources of such information are more often websites, product comparison websites, blogs, or the second largest search engine in Poland – Youtube.

It should also be remembered that in terms of the information sought, consumers are becoming more and more sensitive not only to its quality but also to credibility. Their attention is focused on, for example, whether a blogger does not cooperate with a specific brand, which could significantly affect consumer’s opinion.

An obvious question arises – why does it not happen in an online store itself as a source of information? First of all, it’s tied with what I mentioned earlier, namely with a multitude of sources of information, which is not always limited to an online store. The second issue is often a stronger temptation to watch a product live, which should not be ignored because this behavior applies to almost 70% of all consumers. It would seem that this is a blow towards e-sellers and unfortunately this is often the case. It is due to the fact that not all entrepreneurs have learned to function in a new reality but this approach is already changing. Entrepreneurs themselves are slowly beginning to learn to use the ROPO effect in their favor.

How to do it? Just become the alpha and omega for your clients. Simple?

The best and the simplest solution is to make all information they are looking for to be found on a single page – specifically yours. Just because consumers look for information does not change the fact that to them, in a sense, it is a sacrifice of time and ultimately they will choose a store where they can find all this information. Providing customers with all information, comparisons and opinions in one place, positions us not only as an expert but also reduces the risk of buying goods from our competitors. Undoubtedly, this is closely connected with the issue of good content that is being raised more frequently. By combining all facts together, we come to the conclusion that this may be a chance to increase conversion in our store.

Inverted ROPO effect

As it often happens in the case of marketing phenomena, in this case the reverse phenomenon, called Reverse-ROPO or Research Offline, Purchase Online is observed. As you can guess, it is subject to similar patterns as the ROPO effect itself, but it works the other way round. In this case, the consumer watches the product in question at the stationary store, consults it with the seller, collects information about it, but ultimately purchases it after returning home in the online store. As in the previous case, we can meet with another term, showrooming. It also involves other factors affecting a client’s decision. In this particular case, as an e-entrepreneur, we have a somewhat limited field of action, and unfortunately the decisive factors are usually the lower price or free delivery, although a consumer does not necessarily order in our e-store. The basis for the functioning of this effect are undoubtedly greater opportunities to lower prices in e-commerce, due to the lack of fees for the lease of premises. Therefore, the price attractiveness mentioned has become the key to the success of e-Commerce. You should also be aware that such a consumer already had contact with the product he was looking for and there was a reason why he didn’t make a purchase at a physical store.

How does the ROPO effect translate into industries?

Many entrepreneurs who are aware of the ROPO effect or are just getting to know it, may wonder if this also applies to them and whether it is a phenomenon affecting equally all e-commerce owners. From the report “ROPO effect in the segments of Polish e-Commerce in the third quarter of 2014”, we can find out which industries are most susceptible to this effect and which are exposed to a lesser extent. The results of the report also concern the Reverse-ROPO phenomenon. Its results indicate that particularly vulnerable industries (in relation to e-commerce) include:

  • pharmaceutical products,
  • footwear,
  • sports materials,
  • clothing, accessories,
  • RTV equipment / household goods,
  • auto parts,
  • phones, smartphones, tablets.

In these segments, buyers more often made purchases in stationary stores than in online stores. It is connected in part with the size of some products and large delivery costs (RTV / household appliances).

For comparison, from the report, we can find out which sectors are vulnerable to the effect of Reverse-ROPO, i.e. in which customers search for information in a stationary store, but purchase it on websites. They include:

  • cosmetics and perfumes,
  • children’s clothing,
  • children’s articles and toys,
  • sportswear,
  • jewellery.

An interesting situation is associated with products such as cosmetics and perfumes, which, due to their susceptibility to both the ROPO effect and the Reverse-ROPO, are classified in both groups. This is probably due to the huge potential of the industry, in which entrepreneurs must pay particular attention to both distribution channels. The situation is similar in the fashion industry, the best example of which is the H&M brand, which has its traditional stores all over the country, additionally launching an online store, it generates online sales of over 2% of total sales.