Today’s retail is omnichannel. But which channels will dominate going forward?
That hasn’t stopped them from looking ahead, however, to the next holy grail: start-anywhere, finish-anywhere commerce, in which customers can begin and end the buying journey in any channel, seamlessly picking up and leaving off at any touch point.
But as retailers grapple with the proliferation of channels — stores, e-commerce websites, call centers, standalone kiosks, in-person events, email promotions, mobile platforms, social media — which channels are emerging as mission-critical for the next three years?
The Store With More
E-commerce surpassed 10 percent of total sales for the first time this past holiday season.1 Yet the store remains the dominant channel throughout the shopping journey, with 34 percent of consumers researching and 52 percent buying in person.2 (See Figure 1.)
Retailers are finding success by partnering with e-commerce brands to sell previously online-only merchandise in stores. Nordstrom®, for example, sells items from hot online brands such as Bonobos® and Shoes of Prey®.3 This strategy allows retailers to capitalize on successful e-commerce brands while adding cachet to their physical locations.
It also offers advantages over retailers that have turned their e-commerce sites into distribution centers for other brands. Legacy retailers have faced complaints from angry consumers who experience poor service when making online purchases fulfilled by a partner organization. By selling online brands in stores, retailers can more closely manage selection, fulfillment and the customer experience.
And the customer experience is what stores do best. Increasingly, retailers will treat the store less as a point of sale and more as a place to stage memorable shopping events. Even e-commerce retailers are embracing this approach. Brands like Warby Parker® and Sézane® have opened e-commerce showrooms where consumers can try products in person but then place orders online.4
Mobile Gets Moving
Smartphones have overtaken computers as the top source of e-commerce traffic, accounting for 45 percent of online shopping in the first quarter of 2016. That number was expected to reach 60 percent by the end of last year.5 And the number of mobile users who “frequently” or “always” purchase on mobile leapt from 16 percent in 2015, to 50 percent last year.6 (See Infographic.)
There’s also the question of how much companies should invest in mobile apps. While more and more retailers offer brand-specific apps, less than 30 percent of mobile sales come through this channel.8 Still, apps give retailers greater opportunity for consumer interaction, such as pushing real-time offers as shoppers browse the store.
Mobile will also become increasingly integral to the in-store experience as more consumers embrace mobile payments. Mobile payment volume is expected to explode from $75 billion in 2016, to $503 billion by 2020, for a compound annual clip of 80 percent.9
With more Americans active on social media, the channel is increasingly part of the buying journey. (See Figure 2.) E-commerce shoppers say their buying behavior is influenced by social media reviews and comments (45 percent), promotional offers (44 percent) and ads (30 percent).10
The key to social media success, say retail experts, is to develop strategies appropriate for each social channel. For example, you might treat Facebook® as a direct-response channel and Instagram® as a branding platform.12
It’s also important to realize that the social-media universe is constantly changing. For example, while digital natives were the first social-media denizens, Gen Xers now spend 40 more minutes per week on social media than do millennials.13
Like social media, retail channels will remain in constant flux. The retailers that achieve the greatest success will be those that can respond to changing channels — while moving closer to true start-anywhere, finish-anywhere commerce.
1 “E-Commerce Sites Are Set to Hit a Major Milestone This Holiday Season,” Fortune, September 2016
2 “Total Retail Survey 2016,” PwC, February 2016
3 “Why Online Retailers Are Flocking to Nordstrom,” Fortune, March 2016
4 “The Store of the Future,” The Business of Fashion, July 2016
5 “Smartphones Overtake Computers as Top E-Commerce Traffic Source,” Bloomberg Technology, July 2016
6 “Mobile in Retail: The New Normal,” RSR Research, April 2016
7 “Smartphones Overtake Computers as Top E-Commerce Traffic Source,” Bloomberg Technology, July 2016
8 “Mobile Commerce Wars: Apps vs. Web,” Venture Beat, September 2016
9 “The Mobile Payments Report,” Business Insider, June 2016
10 “How Social Media Influences Shopping Behavior,” eMarketer, March 2016
11, 12 “Even in a Mobile World, Retailers Aren’t Convinced Social Media Can Sell,” Adweek, April 2016
13 “Middle-Aged Americans Beat Millennials in Time Spent on Social Media,” Bloomberg, January 2017
Abercrombie & Fitch® is a registered trademark of Abercrombie & Fitch Trading Co. AdWeek® is a registered trademark of Adweek LLC. Bloomberg® is a registered trademark of Bloomberg Finance LP. Bonobos® is a registered trademark of Bonobos, Inc. eMarketer® is a registered trademark of eMarketer, Inc. Facebook® is a registered trademark of Facebook, Inc. Fortune® is a registered trademark of Time, Inc. Instagram® is a registered trademark of Instagram LLC. LinkedIn® is a registered trademark of LinkedIn Corporation. Macy’s® is a registered trademark of Macy’s, Inc. Nordstrom® is a registered trademark of NIHC, Inc. Pew Research Center® is a registered trademark of The Pew Research Center. Pinterest® is a registered trademark of Cold Brew Labs, Inc. PwC® is a registered trademark of the Trustees of the PwC Business Trust. Sézane® is a registered trademark of Benda Bili. Shoes of Prey® is a registered trademark of Shoes of Prey Pty Ltd.
Twitter® is a registered trademark of Twitter, Inc. Warby Parker® is a registered trademark of Jand, Inc.
All data cited in this article is used by permission.