Email: avrehop@aueb.gr and gsiomkos@aueb.gr
Web: http://www.aueb.gr

Dr. Adam P. Vrechopoulos is Visiting Lecturer at the Department of Management Science and Technology of the Athens University of Economics and Business. His research and publishing interests include: Electronic Commerce, Electronic Retailing, Digital Marketing and Customer Relationship Management. He holds a B.Sc. in Information Systems from the Athens University of Economics and Business, an MBA in Marketing from ALBA, Greece and a Ph.D. on Electronic Commerce from Brunel University, UK.

Dr. George J. Siomkos is Professor of Marketing at the Department of Business Administration of the Athens University of Economics and Business. His research and publishing interests include: Consumer Behavior, Strategic Marketing and Planning and Electronic Commerce. He holds a B.Sc. in Marketing, an MBA in Finance, an M.Sc. in Statistics and Operation research, an M.Phil. and a Ph.D. in Marketing and Corporate Strategy from New York University.

This paper first presents the factors which constitute conventional retail stores atmosphere. Store atmosphere is the conscious design of the store space and its physical surroundings in a way to generate specific influences (psychological effects, feelings and perceptions) on a store’s clients or shoppers. Then, indicative conventional store atmosphere studies are presented. Human Computer Interaction theory is also considered and its role in the development of virtual stores is briefly examined. By analogy, the term “virtual store atmosphere” is introduced and the corresponding factors which contribute toward the development of the atmosphere of a virtual store are identified. Finally, the paper concludes with the presentation of a general future research agenda in the area of virtual retailing.

The birth of WWW in 1993, particularly its graphical user interface, offered enormous opportunities which were previously unimaginable (Poon and Jevons, 1997). Web’s unique forms of interactivity have contributed to its rapid diffusion as a commercial medium in the recent years. Especially, great potential is offered by the WWW in areas such as direct marketing and virtual or non-store retailing. According to Levy and Weitz (2001), there are two types of non-store retailing: (a) personal sales, e.g., in-home retailing, telemarketing-telephone retailing and (b) non-personal sales, e.g., mail order retailing-catalogues, automatic vending machines, Internet. Of special interest due to the superhighways of potential adoption and uses that it opens, is virtual retailing.

Virtual Retailing

Schneider (1994) forecasted that in virtual retailing, “being a merchandiser will be far more important and far different than it is in the real world” (p.37). Essentially, in virtual retailing the store will be bypassed. The idea is how the virtual retailer and merchandiser will manage to draw customers into the virtual store and provide them with satisfying shopping experience. It is obvious that simply putting pictures of products from a catalog to a TV screen will not be enough. Many consumers visit stores to satisfy, besides product needs, social or entertainment needs. For that reason, retailers develop community atmospheres in their stores in order to satisfy social or entertainment consumer needs. Therefore, virtual retailing would have to provide to consumers “significantly better, faster, less expensive, or more entertaining shopping experiences” (Schneider, 1994; p.38). Early research results indicate that the use of the Internet for retailing purposes is very promising (Choudrie et al., 1998). Internet has a significant advantage over all other interfaces between retailers and customers since it puts greater power and control on the hands of the customers (Field, 1996).

Store Atmosphere

Kotler (1973-4) considered store atmosphere as one of the most important influencing factors of consumer perceptions and attitudes of a store. Kotler defines store atmosphere as the conscious design (planning) of the store space in a way to generate specific influences on its clients or shoppers. Ghosh (1994) defines retail atmosphere as “the psychological effect of feeling created by a store’s design and its physical surroundings” (p.521).

A store’s atmosphere/environment is designed in such a way to positively affect customer perceptions, attraction and shopping, store operations, and employee morale. It is determined by three major factors (Lewison, 1994):

1. store image (external impressions – internal impressions)

2. store atmospherics (sight – sound – scent – touch – taste), and

3. store theatrics (décor themes – store events).

Retailer image is defined as the perception a retailer evokes in the mind of the consumer through the use of alternative presentation tools (e.g., store layout, product display techniques, signs, etc.). Alternatively, retailer image is the “personality” of the retailer as perceived by consumers, or the way in which the retail store is defined in the consumer’s mind (Martineau, 1958). Retail store image is one of the most powerful components of a retail positioning strategy (Bovee et al., 1995), and one of the most powerful tools in attracting and satisfying consumers (Lewison, 1994).

Atmospherics stimulate customers’ perceptual and emotional responses and ultimately affect their purchase behavior (Yalch and Spangenberg, 1990). Atmospherics are the characteristics or physical elements of a store’s interior, which determine its atmosphere. Such characteristics include, among others: the lighting, colors, music, etc.

Store theatrics are based on the idea that a visit to a store is something more than just a shopping trip to purchase various products. Instead, is more than that; it is entertainment, it is special events, star appearances and so on. Store theatrics help the store to increase its sales, build loyalty, and enhance its image (Lewison, 1994).

Several studies on the influence of store atmosphere on consumer’s behavior have been conducted over the past twenty years. Donovan and Rossiter (1982) suggested that emotional responses which are induced by in-store environments constitute primary determinants of the extent to which individuals spend money beyond their original expectations. Bellizi and Hite (1992) showed that the creative use of color can enhance a store’s image. Machleit et al. (1994) and Eroglu and Machleit (1999) found that crowding may potentially influence consumer responses either positively or negatively. Areni and Kim (1994) showed that a more luminous lighting inside the store resulted in shoppers’ increased browsing of the merchandise. However, total sales were not affected by lighting. A study by Schlosser (1998) concluded that store atmosphere influences consumer perceptions of social identity products, while it has little effect on perceptions of utilitarian products.

Human Computer Interaction (HCI) has a role in the design and development of all kinds of systems (Preece, 1994). WWW is the best-known multimedia hypertext system, which offers a rich environment for information presentation (Dix et al., 1998). Virtual retail store atmosphere design and development should follow the basics of HCI guidelines along with conventional retailing and consumer behavior theory and surveys, in order to build an effective virtual shopping environment. Virtual retail stores on the Internet face and offer a challenging opportunity for testing and developing new theories and practices regarding the theoretical background and principles that should support and govern their design and development.

Experts and special consultants in the development of retail atmosphere in conventional stores, primarily rely on consumer (shopper) behavior theory and methods. The appropriate virtual retail store atmosphere can be more effectively designed if it considers the same theory and methods – adopted, of course, for the virtual environment – through the help of HCI. HCI can therefore, play a mediating role in the design of virtual store atmosphere (Figure 1).

In a virtual store environment the correspondence of the conventional store atmosphere determinants is presented in Table 1.

Table 1: Correspondence of Store Atmosphere Characteristics: Conventional vs. Virtual Retailing

As far as the site dimension of virtual atmospherics (or “imaging”) is concerned, color and brightness are similar to the conventional characteristics. On the contrary, size and shape in a virtual environment refer to the images on the screen. The virtual store shopper has many more alternatives than the conventional store customer in terms of customization of his/her personal information needs. The sound dimension in the virtual environment can be optionally introduced by the store designer through background music which the customer has the option to shut off. Since the customer has this option, the appropriate selection of rhythm and intensity of the music background for the virtual shop is significant.

Theatrical effects are implemented through the use of animation. Animation can offer to the shopper feelings of excitement, pleasant mood, and enthusiasm. The use of video animation in retail sites is increasingly becoming wider, capitalizing on the technological advances, which can customize animation to fit the specific user’s requirements.

Signs are used quite commonly, especially for sales promotion activities. Through the use of hypertext links, the virtual retailer can lead the shopper to a specific web page of the store in which he/she can take benefit of a special offer, or a price discount on special items, or any other type of sales promotion. For example, Amazon.com offers customers the ability to reach its site from many other affiliate sites.

Conventional store layout could be easily transferred to a virtual one. In its virtual version, the grid type of store layout can be applied utilizing links among related product categories (e.g. from detergents to personal care products), thus offering to the customer the ability to locate products by type. Products of the same category appear on separate web sites of the store. Additionally, customers can switch to a completely different product category (e.g. from detergents to frozen food products) by utilizing the back-forward motion within the site. More specifically, the shopper in a conventional retail store cannot approach different product categories located in aisles far apart from one another at once. Correspondingly, in the virtual store the shoppers’ freedom could also be limited via navigation constraints. Similarly, the racetrack and freeform types of store layout can be simulated through compulsory back-forward navigation (without links), and alternative product access (with multiple links), respectively.

In sum, a virtual store can be laid out in any way each individual shopper whishes to have it. Virtual stores can be very easily customized to fit individual consumer needs. The virtual retailer on the other hand can respond to different consumer demands about store layout very fast by simply adjusting the software and leaving the physical surroundings of the store intact.

As far as the product display techniques are concerned, virtual store customers have many alternatives and are able to customize the interface view. For example, they have the options of viewing a single brand of a product category, or groupings of available items belonging to the same product category, or rotating products, or even “opening” the packaging of the product in order to examine its contents. The presentation of products can potentially occur at the beginning or at the end of the store’s web page, depending on whether store management wishes to promote it. Special sales promotion frames or floating banners with promotional messages can also be used along with the use of signs, as discussed above. Impulse products can also be presented at the beginning or at the end of store web pages (at the “entrance” or the “exit” of the store so that shoppers attention is caught). High demand products usually appear on the first page of a store web site in order to be easily located by shoppers.

The present paper sets a conceptual background for the consideration of store atmosphere as a major determinant of virtual retailing operations and success. The conventional retail store atmosphere and consumer behavior theories could and should be adopted for application in the virtual environment. The typical store atmosphere studies presented in the paper could serve as a starting point. They can be replicated in a virtual retailing environment. The results of these studies should primarily have managerial implications for electronic retailers and virtual retailing software developers.

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