As noted in Fierceretail: “Today’s shopper uses multiple channels during their customer journey. In fact, 78% admit to using multiple channels to make a single purchase”. According to Glossy, customers at Nordstrom who use both channels spend five times more than those who don’t. Most research their purchase digitally before stepping into a store. I know I do. Or visit a store for research purposes – perhaps purchasing the product later online.
So running each sales channel as a silo is no longer accurate or effective in analyzing the business. It is in fact irrelevant.
As noted in this excellent Forbes article: “Retail brands as diverse as Target, Nordstrom and Neiman Marcus indicate that more than 60% of physical store sales are influenced by a digital channel. Data from Deloitte not only bears this out more broadly but also affirms the rapid pace of change”.
Most consumers are active in multiple channels, even to buy just one item. “The key now is to execute a channel-agnostic, one brand, many channels strategy”.
BOPIS (buy online pick-up in store) and online returns at brick & mortar locations now make the store more critical in overall volume and operating efficiency, without the store ringing the sale.
Sometimes, however, a consumer will make an unplanned purchase at the store.
This dynamic is so important that Kohl’s even accepts Amazon returns!
As store traffic declines, the interaction between e-commerce and in-store becomes increasingly important. Those retailers who study and improve the experience of this dynamic will prosper.
Therefore, new metrics are needed to better reflect this new reality
Some suggestions from The Reinvention of Retail Demands New Metrics include:
- Same (comparable) trade area sales-growth.
- Same (comparable) customer segment growth.
- Customer journey performance levers.
Vendors need to study the impact and interaction of this phenomenon and have asked us to help them track that.
This is new territory and the transition won’t be easy. But it must be done. I suspect more and more software providers with offers solutions suited to this need.