Showrooming is so last year. The latest research from NRF Foundation and KPMG reveals the consumer behavior to watch for next.
Today, if you’re in retail – regardless of what you’re selling – you have to start thinking “omnichannel.” According to analysis provided by the National Research Federation (NRF) Foundation and KPMG (the U.S. audit, tax, and advisory firm), the most important concept in modern retailing involves building a brand that engages and serves customers seamlessly online and in the physical store.
With technology at everyone’s fingertips, consumers are living an omnichannel lifestyle every day, and retailers must keep up or get left behind. This transformational shift has been documented through research and facts gathered from various government resources and retail industry reports.
The U.S. Department of Commerce estimates e-commerce to be a $260+ billion industry. As more brick-and-mortar retailers give their customers the convenience of online shopping, e-commerce will understandably take a larger share of total retail sales. In 2013, the U.S. Department of Commerce noted a 13% rise over the previous year.
Online shopping is currently estimated to account for a total of 8% of all retail sales — which means having a physical store still has the edge…for now. That percentage is increasing, but so is another activity: The NRF Foundation-KPMG report (titled Spotlight on Modern Retail) points to a rise in online-only stores opening up bricks-and-mortar counterparts (a phenomenon observed in the lighting industry when LightingUniverse.com – initially an e-tailer – opened several physical stores in the Pacific Northwest).
How It Works
Today’s customers live in a multi-channel world — they search for a product online and check customer reviews in an app before looking for that item in the store. Retailers that can integrate their online, mobile, and in-store experiences have a major advantage over those businesses offering only one channel of contact.
After surviving the Recession and still facing rising healthcare expenses and a higher cost of living across the board, consumers now want to know everything they can about a product before they decide to purchase it. According to the NRF-KPMG report, six out of seven consumers research products online before buying. Stores with Web sites that provide product information will have the edge over a showroom with a static Web site that only states the hours of operations, location, and listing of brands carried.
Be More in Touch
Social media is the easiest and fastest method for consumers to share experiences, give product reviews, and interact with a brand — and it’s projected to grow in size and influence. As a result, more companies (manufacturers and retailers) are investing in the manpower to maintain a lively social media presence on Facebook, Twitter, and Pinterest.
The NRF-KPMG report states that social media is no longer considered “new technology” and it continues to adapt and grow in new directions. For example, Pinterest’s 70 million users reportedly follow an average of 9.3 retail companies — a statistic that is greater than those who follow on Twitter or Facebook.
According to a study conducted by e-commerce consultant RichRelevance, which tracked 700 million shopping sessions, shoppers coming from Pinterest spend nearly $170 per session on average while those from Facebook spend $95, and those on Twitter spend $70.
For the past year, the top priorities for online retailers have been site conversion (getting consumers to purchase) plus the development of mobile and tablet initiatives. These findings came to light during the State Of Retailing Online 2013 Shop.org study conducted by Forrester Research. Other concerns are site redesign, international growth, and multi-channel efforts.
With so much emphasis on online and mobile device communications, it’s not surprising to learn retailers will be investing in employees with skills in social media, app development, and other emerging technologies. The retail environment will continue to rapidly evolve; those companies who stay on top of the changes – or better yet, ahead of the curve – will be successful in this new age of selling.