August 16, 2007

Avatars Give Retail Websites that Important “Personal” Touch

Research by Dr. Julie Baker

A groundbreaking look at the emerging technology of website avatars provides intriguing implications for online retailers by clearly showing avatars to be potentially powerful marketing tools. Associate Marketing Professor Julie Baker says this is good news for retailers, who spend billions on online marketing.

The investigation revealed that avatars - virtual online characters designed to simulate human interactions with users - can enhance shoppers' enjoyment and ultimately lead to increased sales.

This is good news for retailers, who collectively pour billions of dollars into online marketing, and suggests an effective new way to grab customers' attention.

"Can a Retail Website Be Social?" is the first study to examine consumer reactions to simulated social interactivity with retail website avatars that serve as shopping guides to help users navigate the sites. The study was conducted by Julie Baker, Associate Professor of Marketing at the Neeley School of Business at TCU, along with colleagues Liz C. Wang, University of Dallas, Judy Wagner, East Carolina University, and Kirk Wakefield, Baylor University.

"The answer to the question is definitely yes," says Baker. "Avatars are just beginning to be used on retail websites, and we wanted to examine their effectiveness. We found that online retailers can get very good results with avatars, with thoughtful use."

"Online customers often miss the type of human connection they have with sales personnel in brick-and-mortar stores," she continues. "On a website, just the existence of a virtual character serving as a shopping guide can increase shoppers' intentions to purchase by increasing their positive emotions."

When an avatar behaves in a seemingly social manner through employing specific social cues, customers are likely to behave as if the guide were a live person. This holds true even for the most computer savvy of users, and is due to a natural, ingrained response from people when an invitation to social interaction is extended to them, even if by an automated character on a computer screen.

The four social cues studied were: written language, spoken language, interactivity with users, and serving in a role (in this case, that of shopping guide).

"Can a Retail Website Be Social?" reports on a pair of investigations. The first examined reactions to a laboratory-created website centered on Caribbean travel, both with a graphically designed avatar and without. Participants were 333 undergraduates at a large Southwestern university, most of whom were experienced online shoppers.

The first investigation looked at whether an avatar could increase users' perceptions that the site was social, and, if so, whether these perceptions led to heightened pleasure and interest, in turn resulting in enhanced flow, enjoyment value and utilitarian value, and intent to purchase.

Flow is a state reached when users become absorbed in an activity. It was found that both flow and pleasure have positive influences on the enjoyment value (called "hedonic value") of the website and its utilitarian value as a tool toward achieving a goal. Both hedonic and utilitarian values were found to strongly influence patrons' intentions.

The second investigation, designed to verify and broaden the results of the first, used a real website for custom window blinds, a utilitarian item. The 250 participants were homeowners from across the nation, divided into three age groups (21-35, 36-50, and 50+). The majority were experienced online shoppers.

The second investigation largely supported the results of the first, and revealed that pleasure was increased only for those with an actual interest in the product.  Women enjoyed themselves more than did men, and, while utilitarian value led to patronage for all age groups, older participants found less utilitarian value in the site and were less likely to buy. This latter result was unexpected, and the authors recommend further research.

"We found strong and consistent evidence throughout the two studies that social cues provided by website avatars produce user perceptions that the Websites are more social, and that those perceptions have a significant positive influence. Those are key findings, and it didn't matter if the avatar was a graphic character or a video of a real person," says Baker.
Avatars, however, should be used carefully, she advises.  For example, they must not be annoyingly intrusive. "Our avatars appeared on the home page and several other major pages, but not on every page. You can't have them popping up everywhere."

Avatars should be designed to appeal to target customer groups and be appropriate for the product or service. For instance, the study points out, a "teenager" avatar hawking financial services most likely would not be well received.

Some types of websites may even be inappropriate venues for avatars. "Buyers of low-cost, familiar, utilitarian products may feel intruded upon and that the avatar is impeding their purchasing goals," Baker explains.

More study is needed, to further test avatars with different products, services, consumer demographics and social cues, says Baker. A more thorough understanding of the effective use of avatars will help retailers maximize website resources and see greater value for their marketing dollars.