Summary of survey by COMARCH KANTAR TNS
With the advent of digitization and the internet, retail was changed forever. Stores like ebay and Amazon made it easy and affordable to find exactly the item you needed, and all without leaving your house. For some, it seemed like the entire paradigm of in-store retail was doomed.
Today, it is more common to see online and brick-and-mortar retail as two distinct but complementary parts of a retail strategy—online and offline retail are not totally separate, but rather distinctly related to one another, and actions in one sphere can have knock-on effects in others. COMARCH, a provider of IT solutions for retail, has recently published a survey of retail trends, the most interesting and important findings of which have been summarized below.
Age is more than a number
Despite the occasional panicked article proclaiming otherwise, millennials are actually quite eager consumers. It’s just that the way they shop is distinctly different from the way their parents do it. As expected, the younger the shopper, the more open he or she is to online shopping and digital offers. Very generally, younger shoppers tend to prefer online shopping, but still around half expect to continue to do some portion of their shopping offline. Consumers of different ages also use devices differently, with younger consumers preferring smartphones. While millennial consumers tend to prefer online shopping more than their parents do, they still conduct a large portion of it offline and expect to continue to do so.
Some offline channels are more resilient
The survey found that all sectors are not created equal, and there exist persistent barriers to moving some sectors online. These tend to be primarily logistical in nature—DIY building supplies, furniture, beauty, home supplies, and other goods seem to be more resistant to online sales growth than others.
Loyalty is low—but it doesn’t have to stay that way
Consumers today exhibit particularly low loyalty to retailers. But the survey indicated clear ways to enhance and cultivate consumer loyalty, including loyalty programs (see next section), positive shopping experiences, personalized in-store assistance, and others.
In-store assistance is greatly positive—and translates to offline
Personalized assistance by experts, such as the type that occurs in DIY stores, is of great value to consumers, and one of the ways that brick-and-mortar sites can fight customer attrition. A great experience in-store can have knock-on effects, with a consumer telling friends about the experience, and being generally more likely to re-patronize the store.
Retailer loyalty transcends the internet
When a customer is loyal to a retail brand, the advantage extends to online retail: a pleased consumer is more likely to shop at the online outlet of a company where he or she had a good in-store experience. This demonstrates that online and offline retail are best conceived as two parts of a single comprehensive strategy.
Loyalty programs are effective—but protect the data
By creating positive shopping experiences, retailers can make use of loyalty programs to provide their customers with personalized and interesting offers, both online and offline. These benefits are, in effect, transferable, with offline loyalty encouraging online shopping and vice versa. The study also found that consumers value data security very highly, a finding with key importance to the rollout of any loyalty program.
The bottom line? Offline retail is far from dead
Rather than exposing the eventual demise of offline retail, the survey identified substantial resilience and opportunity in the sector. Smart offline retailers will treat offline as a subset of their entire sales strategy, with online and offline outlets working together in a complementary fashion to enhance consumers’ experience across the more general shopping journey.
For their part, consumers are remarkably flexible, but show great, age-spanning predilections to support retailers who provide them with good shopping experiences, chiefly through personalized assistance and offers, as well as through loyalty programs that offer financial advantages.
With smart management of their opportunities and customers, retailers can retain their offline locations while continuing to grow their online opportunities. Online and offline retail strategy need not be mutually exclusive, but rather work best in concert.