PWC recently released their Total Retail 2016 report, which asked 23,000 online shoppers for their thoughts on everything from mobile shopping and the influence of social media, to the importance of great in-store service.
The results? Eight key findings that are bound to shake up retail as we know it this year. If you don’t feel like digesting 30 pages, we’ve done the hard yards for you by summarising each point and providing a little commentary.
We don’t agree with it all, naturally, but we do agree with the underlying importance of the physical store in the retail experience: the more data a store can provide, the more discoverable they will become, and the greater the retail experience will be for shoppers.
Finding 1: To understand future global shopping behaviour, look to China.
Shoppers in China are natural early adopters of cutting edge retail technology; a fact reflected in historical data shows that what China was doing several years ago, consumers elsewhere are doing now. In 2014, 55% of Chinese respondents agreed that their phone will be their main tool to purchase products, whether that’s by pre-loading credit, buying online or using tools like Apple Pay. In contrast, only 34% of global respondent this year agree with that statement – that places global respondents 21% behind where China was two years ago.
The verdict? Observe China as a window into the future and build strategies accordingly.
Finding 2: We may live in an age of value, but price is still king.
Affordability proved to be important in every income bracket, in virtually every country, across every age group. No surprise there.
However, price and affordability are just one part of the larger value story: just as important as the actual price is the “perceived value” of a purchase, and that is most certainly something that can be greatly influenced by your retail store experience and brand perception.
Turns out convenience is a huge part of perceived value (as much as the actual price). 58% of US respondents said that convenience was their main influencer for buying online, and 47% of global respondents agreed.
What if we could make offline as convenient as online? With Store Discovery Optimisation we can! The more data a physical retail store provides, the more discoverable they become based on the products they sell, and the easier it will be for them to take back online sales from the likes of Amazon.
Finding 3: Store traffic doesn’t matter as much as overall customer conversion across channels.
We disagree. No surprise there.
While acknowledging that the physical store is a critical step in the purchase journey, the report found that a steady decline in US retail store foot traffic at the hands of growing online sales.
However, with 90% of transactions still taking place in physical stores, offline retail is far from obsolete.
It all comes back to treating your store as yet another media channel (a concept from The Retail Prophet that we previously spoke about here). ‘Quality not quantity’ is the motto here: store traffic will decrease, we know that, but the traffic stores receive will be more relevant. Shoppers will visit stores knowing they sell what they want, which will result in better conversions (whether in-store or through another channel). This links in with the fourth finding by PWC: there is no point in having awesome retail employees if as many people as possible are not visiting the store. As per the “Store as Media” concept above, if people are not finding that media, they cannot experience what is has to offer and be influenced to buy through any channel.
Finding 4: Retail talent (finally) matters
Retail store employees have often been viewed as ‘short-term’ and therefore aren’t usually invested in in terms of training.
That doesn’t cut it anymore.
The changing role of the store, soaring customer expectations, and the desire to support local businesses are increasing the need for retail talent. In-depth product knowledge is just the beginning. Shoppers expect a highly personalized in-store experience, easy checkout, real-time personalised offers and incredibly helpful staff (where the help extends to post-sale).
However, what’s the point of great employees that create an awesome experience if people don’t visit the store? Likewise, shoppers should be able to find store based on how knowledgeable the employees are. That is a key part of SDO: discover stores based on the experience of the store, which includes the knowledge of staff!
In short: invest in your staff, increase your Store Discovery Optimisation, enjoy more shopper visits, and convert more.
Finding 5: Mobile devices have turned the corner as purchasing tools
Not surprisingly, mobile shopping will increase its share of the online shopping revenue pie this year.
According to the report, purchasing in-store via mobile is up 8% this year, with 20% confirming that they have made purchases this way, compared to 12% last year.
One of the main reasons shoppers are trying and actually sticking with mobile payment is the ease of use. Research has shown that simplifying the online checkout process makes consumers much more likely to complete the purchase.
Finding 6: Today’s consumers look to community
Shoppers want connection, exclusivity, customisation, and membership. 91% of global respondents said they were part of a loyalty or rewards program, but they’re outdated. They don’t build a community and they don’t offer a sense of connection with likeminded people.
A higher degree of customisation is needed, along with unique and exclusive benefits. Points don’t cut it anymore. Respondents chose personalised marketing offers (23%), access to special member events (18%), and access to exclusive member-only areas (14%) as key benefits of being part of a retail community.
Finding 7: Social media is the great influencer
Social has always been key in terms of influencing purchase patterns: shoppers are undeniably influenced by customer reviews, comments and feedback. What was particularly interesting in the report was the growth of social media driven purchases. While in the early stage of growth, there is no denying their significance. Pure social-driven retail has outpaced all other online channels. For example, when looking at the top 500 retailers in the US, the $3.3 billion in sales from social shopping in 2014 marked a 26% increase from 2013, according to the Internet Retailer’s Social Media 500. This growth is well ahead of the roughly 16% growth rate for the overall e-commerce market in the US.
Finding 8: There is room for retailers to grab the “leading innovator” mantle
Consumers are demanding innovation from retailers. Nowhere is this more apparent that in physical retail. But innovation only has its place once the basics are in place – there’s no point having fancy beacons and smart mirrors if your store isn’t optimised for discovery!
By all means adopt new tactics and strategies to provide shoppers with a seamless and integrated omnichannel experience. But before you chase the “innovative retailer” title, make sure your SDO (Store Discovery Optimisation) is top notch so that you’ll be found my nearby shoppers who want what you sell. You can do that through Booodl.
Which of these findings do you find most surprising? I’d love to hear your thoughts.