Originally printed in the October 2020 issue of Produce Business.
By Frauke Kühn, PhD Student Marketing, and Marcel Lichters, Assistant Professor Consumer Behavior — Otto von Guericke University Magdeburg; Nina Krey, Assistant Professor Marketing – Rowan University
Read Jim Prevor’s Commentary below
Within the past three years, e-commerce sales increased by 77% and is supposed to reach $4.21 billion in 2020. Nevertheless, online retailing seems to be highly product-category specific. For example, while more than 77% of American consumers buy products like clothing, music, or books via the Internet, only 4% purchase groceries online. Industry reports also predict a relatively slow increase of online produce sales by 2030, namely 5%.
The recent trend is problematic due to the fact that online grocery shopping could solve problems like limited access to healthy and fresh products. Thus, buying produce online represents one solution to providing healthy products in so-called food deserts. The aim of our studies was to identify why consumers still hesitate to buy produce online and to explain diverging online shopping behavior across produce categories.
Sensory marketing offers potential explanations. The missing haptic (i.e., touch) input during online shopping significantly impacts the decision process, especially for perishable produce. Consumers want to experience produce personally before committing to the purchase. Accordingly, consumers’ need for touch (NFT) can lower the appeal of online grocery shopping.
NFT is a personality trait that reflects consumers’ preference for haptic information. “High NFT Consumers” rely on haptic information during the decision-making process to select the best item, reduce uncertainty, and experience enjoyment when touching objects. Consequently, we used NFT to explain consumers’ hesitance to purchase produce online. We furthermore proposed a psychological process highlighting the negative consequences of NFT in online produce retailing.
In our research assessing produce with high touch diagnosticity (i.e., the extent to which touching an item is important in the product evaluation process), our analysis identified three frequently purchased produce items with above average touch diagnosticity: apples, bell peppers, and bananas. A simulated online grocery shop provided the retail setting to assess NFT’s impact on consumer behavior in relation to the previously identified produce. Our research showed that especially High NFT Consumers express quality concerns, which led to negative feelings toward online offered produce.
Specifically, grocery retailers not only face negative quality perceptions concerning their products, but also encounter lower consumer intentions to buy and to consume online offered produce. These relationships are directly influenced by NFT; as NFT increases, these effects become more pronounced. Using a direct touch interface (e.g., the touchscreen of a smartphone) compared to an indirect one (e.g., mouse-keyboard combo) mitigated these negative effects of NFT on consumer feelings. In other words, when High NFT Consumers used a direct touch interface, they were less averse to buy and to consume online offered produce.
Fortunately, recent consumer trends show a shift from indirect to direct touch interface usage. Thus, e-retailers should actively push direct touch interface usage by creating websites and platforms that encourage direct touch engagement to facilitate online produce retailing.
Moreover, we looked into consumers’ willingness to pay (WTP) for both offline produce (e.g., purchased from a supermarket) and online produce. Our findings reflect that consumers reported lower WTP for online than for offline produce. Possessing a high NFT personality enhanced this difference. Further, quality concerns and negative feelings toward produce offered online strengthened NFT’s impact on WTP. To illustrate, High NFT Consumers were willing to pay $1.72 for 2.2lb of bananas in a grocery store, but only $1.46 for the same amount of bananas online, which is a difference of 17%. Even Low NFT Consumers expressed a 9% lowered willingness to pay for online compared to offline produce. Therefore, with respect to consumer personality, e-retailers should consider different pricing across retail channels, i.e., lower pricing in online environments.
Importantly, we offer a solution for NFT’s negative effects on consumers’ WTP: video clips featuring an individual’s hands touching the product, which successfully offset the negative influence of NFT on consumers’ WTP for online produce. This tool (see picture at left) is beneficial for high NFT consumers without negatively impacting other consumer segments.
Consequently, even if e-retailers do not know consumers’ level of NFT, using videos as a touch surrogate is an effective strategy without potential negative consequences. Finally, the current research also introduced an interesting boundary condition: NFT exclusively impacts consumers when shopping for produce with high (instead of low) touch diagnosticity. Therefore, our research showed that any investments made in optimizing product presentation in online retailing should prioritize produce with high touch diagnosticity, such as bell peppers and apples, over low diagnosticity (e.g., melons).
The Consumer Research Cluster (CoRe) at the Otto von Guericke University Magdeburg (Germany) generates insights relevant to business practice about consumers, their preferences, and the mechanisms that trigger certain behaviors.
Rowan University in Glassboro, NJ, is one of the fastest growing research institutions in North America.
First, We Have to Solve The Produce Variability Problem
By Jim Prevor
This study is fascinating, but it doesn’t address the key point: Even though it may be true that purchase of Need for Touch items is increased via use of videos or photos, produce is inherently a variable product. The same variety, with the same outward appearance, can taste differently on different purchase occasions. Almost all consumers have had the experience of biting into a perfectly good-looking but mealy apple, or peeling citrus and finding it dry inside, or biting into a produce item and finding it wasn’t sweet.
The scholars, though earnest in trying to find solutions to the problem of boosting produce sales online, don’t factor in the real life applications to test their thesis. Sure, in a lab, consumers shown videos of product, with human interaction of that product, may well show a greater propensity to purchase. But when they actually order and find the fruit delivered has nothing to do with the picture on the screen or the video shown and, in fact, doesn’t meet the consumer desires for taste, texture or appearance… how many times and how long will it take before consumers become inured to such a presentation?
Consumer desire to look, taste, touch, smell, etc., is all a proxy for trying to get the appearance, the texture, flavor and scent that the consumer enjoys. It is not hard to imagine why produce is slow to pick up on Internet shopping. When my family needs bottled water and we have it delivered, this meets our demand for convenience, and we can order in complete certainty that the bottles of Dasani are of consistent quality and just as good as the bottles we would pick out had we hand inspected each one at the store.
None of these visual efforts will improve the intrinsic quality of the produce and may well lead consumers to buy produce they will be unhappy with
The produce problem is that we can’t do that with certainty. First, it is often hard to buy a particular brand online. The information given is often outdated or incorrect. But even if known, many produce packers ship produce with variable taste. It is easy, and common, for a consumer to buy a melon, for example, take it home and find it lacks sugar or is tasteless. This problem is compounded when the consumer has no ability to inspect the item, no chance to ask for a sample, etc.
In this sense, even very successful online efforts to encourage consumers to buy may actually hurt long-term consumption and the produce industry itself. After all, none of these visual efforts will improve the intrinsic quality of the produce and may well lead consumers to buy produce they will be unhappy with.
So what might help:
1) Retailers in-store and online need more aggressive efforts to buy and market good tasting produce. Very often the best tasting items are different varieties – say in grapes, stone fruit and apples – and carry premium prices. Many retailers sell these, but they also sell cheaper items, and, especially on sale, they promote the cheaper items without offering options for consumers to upgrade to more flavorful or tasty varieties. It is very common for retailers to be willing to accept lower markups on less flavorful varieties because those are the varieties being sold on sale.
2) There is also a problem because retailers rarely have taste requirements for purchased produce. So if they receive a tasteless shipment of honeydews, they just want to sell it. Not only is there a need for standards on ordering and receipt, but there’s a great need for communication to consumers about flavor as opposed to merely condition or appearance, as grade standards tend to require.
3) Lower “Willingness to Pay” for online produce is a reflection of consumer doubt and uncertainty. More liberal and publicized credit policies – if you don’t like the fruit we ship, just let us know and we will take it off your bill – are probably required if we are going to ask consumers to buy “sight unseen” through online ordering. Perhaps this will require monitoring customer accounts to make sure they are not abusive.
It is possible that consumer “Need for Touch” reflects intrinsic habits of certain consumers. We would be interested in knowing if this applies to packaged products, too, as produce is increasingly packaged. Perhaps if some sub-section of consumer likes to touch boxes of detergent or bottles of soda, that would lead the produce industry in one direction. If, as we suspect, consumers like to touch produce in pursuit of real information, the industry would be wise in identifying ways to satisfy this information need, even if a consumer is remote.