STUDY: Brick-and-Mortar stores aren’t dead, but…
According to recent Deloitte research, many retailers fail to leverage the potential of or meet the digital expectations of their customers. That gap, the ‘new digital divide,’ puts at risk much more than just online shopping revenue. Clearly, this gap is different in nature from the standard notion of ‘digital divide’ that describes socio-economic differences based on access to information technologies. Nevertheless, for retailers, it poses a serious threat to overall revenue and a bold challenge to the way they respond to, and anticipate, customers’ shopping habits in-store. The fact is, traditional retailers are leaving too much money on the table and are allowing strictly online retailers to capture a growing share of revenue that could be theirs.
Digital devices’ influence on in-store purchase behavior is growing much faster than anyone could have anticipated.
Deloitte’s research shows that today, digital technologies influence 36 percent or $1.1 trillion of in-store retail sales, and this number will likely increase to 50 percent of in-store sales by the end of 2014.
Given this acceleration, we are at a tipping point in retail – a point where digital channels should no longer be considered a separate or distinct business. Instead, digital is fundamental to the entire business and the entire shopping experience, in and out of the store. As this new reality begins to have a greater impact, retailers should change dramatically the way they think, measure, and invest in digital and address their customers’ digital needs and wants.
Yet, many retailers measure the success of their digital investments by narrowly focusing on ‘conversion in the channel’ – customers making purchases directly through their devices. In most cases, retailers prioritize their investment in features that drive on-device conversion, which are not necessarily the same features that the in-store customer wants. This limited perspective fails to appreciate or capture the full value of digital devices as a tool in influencing the shopper’s path to purchase. In fact, retailers are often failing to properly measure and apply even the most basic digital metrics such as conversion, visits, and page views. Viewed holistically, these metrics can be powerful leading indicators of customer preference and purchase intent.