Recently a client told us she never shops in physical stores for any item she can buy online. It is hard to imagine that mobile and web shopping did not exist just a few years ago. Apple and Amazon completely upended that space.
And now we are so used to jumping on the web or using our phones that is natural to shop that way. And so convenient: Tom Carnevale, one of ERS’ Retail Sales Analysts, ordered soda the other day with Amazon Prime Now. Deliveries in NYC are guaranteed to be less than 2 hours for free and 1 hour for $7.99! And sure enough they delivered inside of one hour. Word has it they even use the NYC subway system to meet these deadlines.
While the numbers are still overwhelmingly skewed towards brick and mortar, there is no doubt that web and mobile are eating into the consumer’s desire to venture out to a physical store. Smart retailers such as Nordstrom, Gap, Wal-Mart, Best Buy, and JCPenney are actively pursuing an omnichannel approach that is working. In fact, their online business is growing faster than the e-commerce industry at-large.
At the same time, the bar must be set higher for physical stores to remain relevant. Retailers must play to their stores’ strengths or offer more excitement to justify a venture out – Just like a sporting event has a certain excitement that justifies the cost and hassle of leaving one’s couch. After all, the consumer is more time pressed and exhausted than ever before.
Some malls have started to offer delivery. Sears offers drive through pick-ups.
Say what you will (and rightly so) about Ron Johnson, I believe he was right in offering events to draw shoppers into JCPenney stores. Other good examples include trunk shows, free samples, entertaining displays, vendor educational sessions, designer visits or in store exclusives. Also thought should be given to playing to strength of the physical world. That same client I mentioned earlier said an exception is clothing – She wants to try it on before purchasing. My wife used Peapod only when she needed to – She wants to pick the fruit and vegetables herself. I’d much rather buy an Apple product in store where I can interact with a knowledgeable associate.
T.J.Maxx is seeing strong growth by staying focused on scouring the world for new designs that can be sold at discounted prices, ensuring that shoppers find new treasures on each trip, retail expert Robin Lewis writes. The “treasure hunt” strategy spurs impulse spending and fuels repeat visits, he writes.
“The shopping experience is likened to Costco’s popular “treasure hunt,” except that instead of finding a designer brand or other unexpected item that Costco offers only once every few weeks, the thrill of the hunt — and surprise findings that delight — occurs every day in the T.J. Maxx stores,” Lewis writes. Scarcity is built into the process, compelling consumers to visit more often to hunt for what’s new, and when finding it, to buy it, since it will probably be gone in a day or two.”
According to a recent Forbes article: “To accomplish their goal of growing sales in a way that limits investment in new real estate and goes beyond online, Tesco chose an ingenious solution: offering 2-dimensional stores in high traffic locations, like subways in Korea, or airports in the U.K., so people can shop with their phones, snap item QR codes, and have delivery timed for just after they arrive home after work (Korea) or from a trip (The U.K.). In the U.K. Tesco created digital video screens at airports so travelers can have groceries at their homes when they return from trips so they won’t have to face empty fridges. In both cases Tesco took advantage of down time, when customers have no choice but to wait. It’s brilliant from a marketing standpoint because the 2D “stores” are effectively huge ads, viewed in environments with little competitive clutter. Customers may also be more likely to view the “whole shelf” when shopping this way, and may purchase more than in physical or online stores where they tend to go directly to their usual items”.
“Webifying” the in store experience also holds much promise. Tracking the shopper in a way that is positive, such as an opt in experience of special offers as he or she walks down the aisles could work wonders. New technologies such as iBeacon are enabling this trend. In fact, according to Mobile Commerce Daily, Carrefour recently saw a 400 percent increase in mobile application engagement thanks to beacons. By tracing what order shoppers visit specific areas, Carrefour is then able to improve its store displays and offerings to increase profitability and attain more customer loyalty. Consumers are constantly searching for product offers and weekly coupons on their smartphones and appreciate viewing in-app product locations and maps to easily locate desired items.
After all, about 85% of global consumers have used their smartphones in retail stores and 55% said the gadgets have changed the way they shop, according to a survey from DigitasLBi Connected Commerce. In the U.S., 71% of consumers surveyed said they’re open to receiving vouchers and personalized deals on their smartphones.
Most consumers (85%) globally say that they have used their smartphone in-store, according to the DigitasLBi Connected Commerce study.
This is an increase from 72% just a year ago.
Perhaps more significantly, 77% of Internet users have been influenced by mobile during the purchase process.
Retail merchants need to re-evaluate their brick and mortar business every year. The retail space is moving and shifting like never before.
What do you see from your perspective? Please add to the discussion.