The In-Store vs Online Retailing Tug-of-WarIn the U.S. retail industry, by far the biggest names are Walmart and Amazon. Yet, these are big names for very different reasons. Walmart is at the top because of the brick-and-mortar presence they have with thousands of U.S. outlets. Amazon is huge for precisely the opposite reason. For Amazon, it is their virtual (i.e., online) and not physical presence that has brought them to a commanding retail position.

In many ways, these two retail giants are pulling on different sides in a tug-of-war that will shape the future of retailing. On Walmart’s side are traditional store-based retailers that feel the customer experience takes place best when they can interact directly and face-to-face with the customer. These retailers believe connecting with customers on a personal level is the key to forming long-term customer relationships.

As we discuss in our Promotion Decisions tutorial, promotions are used to achieved five key objectives: 1) building general awareness; 2) creating customer interest; 3) providing product information; 4) stimulating demand; and 5) reinforcing the purchase decision. For many new products, these objectives are accomplished in a hierarchical manner with previous objectives needing to be met before moving to the next. For example, it would be hard to get customers to be interested in a new product (Object #2) without them first being aware of the product (Objective #1). Consequently, the first step in launching something new is to make sure those in the target market are aware of it.

An essential element of a marketing communications campaign is the need to craft a message that can capture customers’ attention. This applies to all forms of communication, including messages contained in advertisements, what salespeople say when meeting with potential buyers, and even how public relations may post messages on social media. One method for crafting a message that has been used for many years is the Features-Advantages-Benefits approach (i.e., FAB). Features are the key components of a product. For example, for a razor blade manufacturer, it may include a special type of metal blades. Advantages represent what a specific feature does. For instance, staying with the razor blade example, the advantage may be that the metal blades cut hair very easily. Finally, the features are what the marketer believes the customer ultimately obtains when using the product.  In our razor blade example, the message may state that users of the product will look better when in the presence of others. Thus, combining all three components of the FAB, the razor blade manufacturer may say: “Our finely manufactured blades (feature) will give you a remarkably close shave (advantage) that will make you look great (benefit) when you meet that special someone.”