The Future of Retail is Both Online and Off

 
 

To remain relevant in the digital age, e-retailers may just have to drop the “e.”

This may sound counterintuitive, but the reality is that when it comes to shopping, the majority of sales still happen offline. Technology has been good to retailers: It has opened the doors for businesses of all sizes, allowing mom-and-pop stores to compete with the big players; it has also given consumers more choices than they have ever had (or needed). E-commerce sales have grown from $27.6 Billion in 2000 to $93.9B in 2015.

Yet, this is just a tiny 8% piece of the large retail pie.

And people will still switch to an offline shopping cart because they can’t feel the pixels or simply want to avoid the shipping costs.

So how do retailers convert customers to e-shopping?

They don’t. The major takeaway from the digital disruption of the retail sector is not about technology. The lesson is simple: consumers want choices.

The most successful retailers combine brick-and-mortar with technology to optimize the shopping experience and transform their stores into extensions of online operations. Here are some examples of blending online and offline channels in retail:

  1. Click-and-collect.

    “Click-and-collect” and “click-and-mortar” are terms that describe an approach many retailers are now using to sync their physical stores and the online storefront. 70% of U.S. consumers say they use “buy online, pickup in-store services” to avoid shipping costs. You know the trend is here to stay when Amazon, the Internet retail giant and so-called “killer of bookstores,” is opening its own physical stores (the first two popped up in Seattle and San Diego). The giant retailer also has “Amazon Lockers” located everywhere around the country for easy pickup.

    For smaller online players, collaboration with a non-competing retailer that shares a similar demographic is one way to marry online and offline.

  2. Location targeting

    Customers at Starbucks and Apple who have the brands’ apps installed on their phones receive push notifications right as they come into the doors or are within a walking distance from the nearest store location. 18% of all Starbucks transactions are coming from mobile. Customers can download receipts and add tips, check real-time balances and reload cards.

    For companies that are looking to grab consumers when they’re shopping, location targeting is not only convenient, but also very effective - as long as it’s relevant and works as part of the overall marketing strategy.

     Starbucks Rewards

  3. Cross-channel data tracking

    Beauty merchants such as Sephora and ULTA, whose customers often come in for the in-store experience, digitized their loyalty programs to collect rich customer data and personalize offers and discounts, in-store, on the website, and in their native mobile apps.

    Millennial consumers are willing to share personal data to improve their shopping experience. 65% are willing to share their gender, 53% – age, and 52%  – their contact information. Getting to know consumers beyond these basics and really looking into customers’ shopping trends and habits is imperative to pinpoint how best to target consumers, especially since most of them complete shopping journeys offline and online - and across multiple devices.

    New at Sephora

  4. Incentivized check-ins

    85% of consumers have reported using their smartphones inside a store, and 77% said it influenced their purchase decisions. Location-based social media apps give businesses small and large an opportunity to interact with their customers in stores and in real time. As regular check-ins are becoming passé, incentives can still work. Mayoral perks and “unlock” discount offers on location-based social media apps, or even WiFi access via a check-in, are some of the ways to bring in new shoppers and engage loyal customers.

    Deals

  5. Brand advocacy programs

    Twitter, Facebook, Pinterest, and the like are the new word-of-mouth. Faced with a myriad of options, people are looking for better customer service. When they have a particularly positive or a negative experience, they take their emotions and frustrations online. Facebook for Business Messenger allows business to connect with customers via chat, and almost every major retail brand does some kind of customer support on Twitter.

    And there’s no better way to build the digital brand advocacy than offline. From starting small - like asking a customer to leave a review - to building communities with exclusive first dibs on new collections (think Urban Outfitters “Urban On” program), there are many creative ways to encourage your loyal consumers to be authentic voices of the brand.

    Philz Coffee

The future of retail is not where the technology is headed, but, rather, where the customers are. Putting consumers first by creating meaningful and personalized shopping experiences enhanced by technology is what sets the top performers apart from the competition.

To learn more about the digital transformation of retail, download the Selligent Retail Trend Report.