We have come to a point where online needs to be connected at a cellular level with offline. The problem is that many companies still treat them as separate entities, and that is hobbling any chance of success warns Intelligence Node’s Sanjeev Sularia.
Shopping has changed – consumers now want to be able to shop in-store or online, wherever and whenever they want, but the problem is many retailers still don’t see the two roads intersecting, which means they are losing out when it comes to sales.
Consumers buy some items online, or use online to do their research so they can validate the purchase before they enter the store to pick up the item they have marked out. Shoppers like the wide selection and information they can mine from the internet, but for some items nothing can replace the “touch and feel” of an in-store purchase. There are retailers that have managed to create a smooth omni-channel experience between online and store, such as Apple for example. iPhone users, for example, can complete the sales process in-store using their Apple store app and pay with EasyPay, or alternatively buy online.
Recently the big guns have been out battling to win market traction, and they are likely to be the first in a long line with offering design to attract customers. Walmart recently went up against Amazon’s Prime, with a free 30 day trial of its ‘Shipping Pass’ that offers unlimited free shipping on many online purchases. Shipping Pass is $49 a year, compared to Amazon’s $99 offering. But whilst Shipping Pass is free two-day shipping on best selling products, Prime has embraced other perks such as movie streaming and one-hour delivery, for example.
Online and Bricks and mortar merge
With Amazon’s recent move into brick and mortar bookstores, this is the first sign that we have a blurring of the lines between online and real-world stores.
Amazon already has a store in Seattle and it is believed that it has plans afoot for San Diego and New York. For a company that has made its name online, it may seem like an odd move. But Amazon has its finger on the trend button. It has realized that a growing number of its consumers, particularly millennials, like buying print books and like visiting bookstores. Secondly, a bricks and mortar store is a way of boosting kindle sales, giving consumers the chance to go and try out the devices and discuss them with sales staff.
Amazon isn’t the only online retailer to set up in the shopping mall – lingerie brand Adore Me and eco-friendly clothing company Faherty and men’s clothing company Bonobos are just a few.
Apple’s stores have had huge appeal, thanks to the cult of the brand, the great customer experience and the innovative design of the stores. Can Amazon pull off the same success, only time will tell? But, one thing is for sure, there will be many more online players opening bricks and mortar stores.
A company we work closely with, Indonesian retail giant MAP, was really a traditional chain store with a website attached – like many incumbent retailers. MAP was basically running two businesses, online and chain store, with no clear connection between them.
MAP saw that the physical store represented a great fulfilment center. The customer could begin their shopping trip online and then go to the bricks and mortar store to seek out what they had chosen. They could then simply purchase online and do a ‘click and collect’ to save on both time and cost.
Where does analytics fit in
We’ve discussed traditional bricks and mortar stores getting creative online and pure play online stores venturing into rea-world shopping malls. But there are two additional key pieces to the puzzle – the consumer and analytics.
Today’s e-shopper wants their whole online/offline experience to work as a seamless web. They expect excellent service, value and fulfilment across all channels. Multi-channel or omni-channel – they don’t care which route so long as they get what they want when they want it and for the right price.
The link in the chain to make this all work is analytics and the proof is in the data collected and the way it is being used. Ecommerce giants like Amazon have seen their total data volumes increase by around 1,000% year on year, as more and more detailed information on customers is collected, according to Gartner’s VP Research Gareth Herschel, who tracks the analytics space.
The volume of data being generated online is encouraging retailers to get faster and smarter at processing it in order to get a competitive edge. Although some of the technology appearing is very sophisticated and starting to employ AI and Machine Learning, what the best retail analytics really shows you is information on how to make the best decisions to get ahead in the game.
Retailers are still working to get to grips with the omnichannel demands of customers, as they increasingly want to shop across any device from anywhere. The problem is that many retailers still lack the insight to transform browsing behavior into a purchase, be it online or in store. The more retailers know about their customers the more effective they can be at serving them across channels and customizing promotions to build brand awareness and retain loyalty. Analytics is the way to fuse the bricks and mortar and online shopping cycle by enabling retailers to know their customers and communicate with them. Happy customers equal more sales!
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