JPMorgan Chase & Co. (NYSE:JPM)’s Senior Economist Jim Glassman joined todays Bloomberg TV’s “Bloomberg Surveillance” discussion with Martin Lindstrom, Author of “Buyology – Truth and Lies About What We Want” book. Firstly, Lindstrom discussed some of his findings in his new book, after which he and Glassman discussed strengths of the two approaches to commerce, farmer markets, retail and impulse and aspirational purchases.
Lindstrom said that bricks and mortar, i.e. companies that have a physical presence and offer face-to-face customer experiences, tried to compete on price and volume versus e-commerce, such as Amazon.com, Inc. (NASDAQ:AMZN) for the past 15 years. They were destined to fail, he said, adding that there are segments where bricks and mortars can compete and excel. Those strengths of bricks and mortars are experiences, storytelling and ambient, aspects of commerce, he said, that people want. He added that his findings are transportable to other cities in America.
He suggested that “something has got reason to go to Mortar-and-Bricks if it cannot be replicated online.” The show’s participants agreed that farmers’ markets are very inefficient. Glassman said of retail that it has many parts to it, depending on the consumer section one is looking at.
Impulse purchases are by far more likely in physical stores.
“[…] If I go to a retail store, I’m likely to buy 42% more than I planned to do. Online it’s around 9%,” Lindstrom said.
He also offered insightful opinion about aspirational purchases:
“[…] We are following each other as groups, Apple Inc. (NASDAQ:AAPL) was all about that, Samsung is becoming that. We all want to follow on the people because we are fundamentally afraid of falling out of the tribes.”
Lindstrom concluded by saying that the wealth of tools and possibilities make companies more aspirational than practical.
Ken Fisher of Fisher Asset Management own almost 2.5 million shares as at the end of the second quarter.