Online trade in Russia is developing rapidly, in fact, it is fast becoming a driver of the wider economy. At the same time that high-street trade is contracting (in 2014 this stood at -2%), e-commerce is showing confident growth (up 15% year on year in 2014). Forecasts for 2015 are similar. Every month, over 20 million Russians carry out online purchases.
Attracting and keeping clients is the key factor influencing the turnover and profit margins of internet retailers. Experts and market analysts say the most important point is having a marketing strategy that aims to boost customer satisfaction and loyalty. Most often, this means pricing and assortment, delivery terms, and website usability, as all these parts of the experience can hook or put off customers. Experts usually place less emphasis on the mood element – working with customers’ emotions. During the eighth conference on management, titled Contemporary Management: Problems, Hypotheses, Research, Associate Professor in the Marketing Department Elena Panteleeva and HSE postgraduate student Natalia Mikhailova delivered their report Consumer Experience in e-commerce: An Analysis of Regional and Emotional Consumer Insights. Based on results of empirical research, they were able to demonstrate the points of contact with online retailers that prompt an emotional response, positive or negative. ‘Both positive and negative emotions impact consumer behavior. Negative emotions have a stronger impact on satisfaction and return visits. Positive emotions have a stronger impact on spontaneous purchases, and increases the average bill,’ Mikhailova explained. The basis for this research was an analysis of consumer responses to e-retailers Yulmart, Ozon, Citylink ad Wildberries, posted on Yandex Market. From April 7 to May 7 2015 a total of 537 reviews were posted, of which 179 were included in the random selection.
The research showed that even the most rational consumers are largely emotion-driven when reviewing online retailers. Key positive emotions are: liking, happiness, and trust. Key negative emotions: disappointment and indignation. On the whole, Russian consumers shopping online displayed positive emotions, Panteleeva and Mikhailova found – based on 80% of reviews. This mostly expressed itself as liking the stores. Having a wide range, offering bonuses and special offers, easy user experience, welcoming staff all spark positive emotions from consumers and make them more likely to share this with others. Then came happiness – usually associated with bargains and low prices. Third comes trust and its three components – honesty, experience and benevolence.
Consumer trust is won by following through on what has been agreed regarding product nature and quality, delivery and after-sales service. It is trust that enables an online store to retain client loyalty, even when competition over price is fierce.
Of the Russian online retailers examined, Citylink leads on the happiness front. Wildberries on liking or satisfaction. Trust comes second for Wildberries, third for Yulmart and Citylink, and was not present in reviews for Ozon.
Russian stores fare best regarding range. In 80% of reviews studied people noted the wide range of goods and expressed positive emotions about this. Price is also doing ok - bonus programmes, promotions, and discounts please consumers.
Negative emotions – disappointment and indignation – are often linked to poor quality, poor service, difficulties receiving the goods, prepayment and the lack of any reward system for loyal customers. ‘When internet stores forget about customer loyalty, it often displeases customers,’ Panteleeva said. Quality sparked least positive emotions, with customers often complaining about broken packaging, re-sale of used goods as new goods, and the sale of faulty and damaged goods. Customers’ negative responses hurt retailers. Existing customers are put off, as are new customers who read reviews before trying a new store.
The research results show Ozon and Yulmart lead in the negative emotions, quite heavily. Smaller online retailers find it easier to retain clients.
In order for online trade in Russia to expand retailers must improve their purchase conditions: offer an advantage to shopping online to consumers, put the consumers’ interests above those of the retailer, analyze their needs, meet their demands, improve product quality and service quality, the researchers found. The retailers need to be honest and straightforward throughout the transaction. Having a practical website is also important in building consumers’ positive emotions, the researchers found.