Why It Makes Sense For Retailers To Concentrate On Their Online Channels This Holiday Season

by Trefis Team
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If Black Friday is any indication of how the holiday season will pan out, retailers’ focus on the digital space will prove to be imperative for them to stay relevant. American shoppers spent a record $5 billion online in 24 hours on Black Friday, reflecting a 16.9% rise in the amount spent online in 2017 versus Black Friday 2016, according to data from Adobe Digital Insights. Moreover, 89% of consumers research their products online before making a purchase. Hence, having information, such as reviews or features, about their products easily available will go a long way in making the shopping process easier, and staying relevant in the eyes of the shopper. Therefore, focusing on the digital marketing strategy is just as important as the focus on inventory, store design, and staffing this holiday season.

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Omnichannel: A Need Of The Hour

Omnichannel retail is the ability to seamlessly integrate different channels, whether it is in-store or online, in order to offer consumers a coherent and consistent experience no matter what platform they’re using to shop. In today’s environment, relying on just the traditional brick-and-mortar storefront would be a gigantic misstep. Businesses would be unable to survive for long if they don’t move along with the shift in technology. The increasing rates of internet penetration and a proliferation of smartphones have propagated the rise of online shopping. Furthermore, the added convenience which enables consumers to shop where they want and when they want are other factors that will ensure the growth of this segment.

The importance of the online space was reflected in the National Retail Federation’s (NRF) survey which found that online is the preferred shopping destination for consumers this year. This mode was cited by 59% of consumers, followed by 57% of shoppers who preferred to shop at department stores, 54% at a discount store, 46% at a grocery store/supermarket, and 35% at a clothing or accessories store. Features such as free shipping, expedited shipping and same-day delivery, and buy online pickup in store have attracted consumers to shopping in this space. Hence, it is imperative apparel companies achieve a seamless digital shopping experience, and incorporate the aforementioned conveniences to keep the customers coming back.

Mobile Devices Ruling The Roost

The 2016 holiday season represented the first time when mobile devices were the peak driver of traffic to retail sites, with 52% of the traffic occurring on mobile devices. More importantly, customers are purchasing through these devices also, with the mobile order share up to 31% in 2016, versus 25%in 2015. According to Salesforce’s Shopping Index, which analyzes online shopping activity of 500 million global shoppers, the corresponding figures for the third quarter were 57% and 34%, respectively, which shows the growing importance of mobiles to shopping.

This holiday season, it will be crucial for retailers to optimize their mobile presence and provide a coherent shopping experience. One feature that can be implemented is integrated mobile wallets such as Apple Pay/Android Pay and PayPal Express. The ease of payment may help to improve the conversion, as mobile checkout rates trail those from other devices by as much as 11%. Furthermore, by having geo-location ability, customers can be guided to the closest store and the promotions occurring there. While retail store visits have fallen considerably in recent years, it is necessary for such companies to leverage their store presence as a driver for customer acquisition in the digital space. It has been estimated that digital interactions influence 56 cents of every dollar spent in the retail store. Of the 56, 37 points are contributed by the shopper’s use of mobile devices. While shopping online provides customers with product insight and options for customization, in-store experiences need to leverage the technology to help buyers make more informed decisions. Hence, features such as picking up online orders in-store, creating mobile apps to scan barcodes to gain access to product information and reviews, and accepting mobile payments through the point of sale system are vital to driving customer engagement.

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