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Omnichannel Marketing: A Retail and Consumer Perspective

Woman shopping in-store

photo credit: ericsson.com

The strategy behind omnichannel is delivering a consistent brand and shopping experience across channels: in-store, online and mobile. This blog will outline where retailers are at in terms of implementing their omnichannel strategies. We’ll outline key trends and research around mobile, and provide areas of opportunity for marketers to implement in their own omnichannel strategies.

Current State of Omnichannel Marketing at Retail

According to a survey by SPS Commerce and Retail Systems Research (RSR) from October 2014, only 5% of businesses have executed their omnichannel strategy, and 37% have not yet begun. Due to traditional corporate structuring with internal teams being in separate silos, many companies have teams and marketing campaigns competing with each other instead of complementing each other.

emarketer_omnichannel_chart1

Most consumers say that a physical store is still the most important factor when shopping. Seventy-two percent of consumers rated a traditional store experience as important, compared with 67% who rated an internet site as important. According to an eMarketer report, U.S. ecommerce sales will only account for 7.1% of the total retail sales in 2015. However, per Forrester Research, the majority of U.S. in-store sales in 2015 will be digital influenced; by 2017, more than 60%. For the majority of considered purchases, people are researching online before and during their in-store trip.

Most consumers say that a physical store is still the most important factor when shopping. Seventy-two percent of consumers rated a traditional store experience as important, compared with 67% who rated an internet site as important. According to an eMarketer report, U.S. ecommerce sales will only account for 7.1% of the total retail sales in 2015. However, per Forrester Research, the majority of U.S. in-store sales in 2015 will be digital influenced; by 2017, more than 60%. For the majority of considered purchases, people are researching online before and during their in-store trip.

emarketer_omnichannel_chart

The impact of digital is evolving consumer behaviors in store. Some stores are becoming brand showcases and fulfillment centers for the growing shopper who orders online and wants in-store pickup such as Lowe’s and Target.

Mobile Influences Sales Online and In-Store

Based on shopper’s behavior and desires, the consumer wants a unified experience online and in-store. Mobile is proving to be a driving force in connecting the two. Mobile shopping does not replace the in-store experience; it merely enhances it. eMarketer is estimating that mobile will account for only 1.6% of total retail sales in 2015. Even though there were 146 million mobile shoppers in the U.S. in 2014, approximately, only half were mobile buyers.

Smartphones are influencing the decision process for items that require consideration. Items such as groceries and packaged goods are not typically reconsidered each time. For considered purchases, consumers are researching online before and during their time in store. A Harris Poll survey conducted in October 2014, found that 39% of consumers used their smartphone to find a local retailer, 38% wanted social feedback on a potential gift and 33% were searching for an in-store coupon. In another report by comScore, 44% of smartphone owners used their phone for showrooming…the act of visiting a brick-and-mortar store to see a product but instead purchased the product online.

The Smartphone is the Catalyst for Hyper-local

  • Proximity Marketing and Beacons: In the same Harris survey, shoppers indicated that 15% had interacted with some sort of proximity technology such as beacons. Many retailers have been testing beacons including Macy’s, Safeway, Lord & Taylor, Walmart, and Urban Outfitters. According to Swirl, a beacon platform, the majority of the top 100 retailers are testing this technology.

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  • Google & Real Time Store Inventory: As more companies adopt real-time inventory platforms such as digital tagging and radio frequency identification (RFID), Google has started showing nearby store locations carrying the product you are searching for versus showing a mobile commerce page.
  • In-store Assistance: According to a 2013 Deloitte survey, 59% of internet users preferred to rely on their own device for price and product information versus asking a sales associate. Consumers are becoming more self-aware.

Omnichannel Fulfillment

As part of the changing shopping behaviors, 82% of consumers want to know the availability of a product prior to visiting the store. In-store pickup after purchasing online, ranked second at 57%. During the holiday season, buy online, pick up in store (BOPUS) was the fastest way to receive products.

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photo credit: retailsolutionsonline.com

Omnichannel is driven by consumer preferences and must be managed and adapted by retailers. In-store pickup currently accounts for 10% of Target’s online sales. When customers come into the store to pick up their order, they end up spending more in store.

Fulfillment Trends

  • More retailers have rolled out ship-from store, which makes more inventory available to the customer
  • More store locator options, which allows shoppers to reserve out-of-stock inventory at another store or have it shipped for free
  • Increased ship-to-store options, as a free service for large items not in stock
  • Buy online, pick up in store (BOPUS)

Summary

Despite many retailers feeling behind in the implementation of omnichannel strategies, consumer behavior and mobile will continue to drive improved access, availability and convenience.

Sources: 2015 Omnichannel Fulfillment. A Kurt Salmon Special Report, MediaPost. Chuck Martin, April 2, 2014—MobileShopTalk, eMarketer, December 2014

 

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