Here’s a shocker: the face of retail is changing. Our colleagues in our parent company Nielsen’s research division use terms like “omni-channel” and “cross-platform” in describing the myriad methods that consumers are now using to research products, make purchase decisions and, ultimately, to buy. Today’s smartphone has taken things a step further by bringing the web into the store along with the customer. I’m sure all retailers, at this point, have experienced the customer browsing and scanning products in their store – if they haven’t done so themselves when they shop.
In the early days of the internet we experienced a brief panic from the explosion of new online retailers like Pets.com, Amazon.com and Bike.com (remember them?), all threatening to revolutionize the way we shop and make traditional brick-and-mortar stores obsolete. Heck, did the term brick-and-mortar even exist before the new ecommerce threatened to eliminate it?
The initial threat to traditional retailers subsided a bit as a result of the dot-com bust, but online retail has continued to grow as a percentage of total retail sales. In 2011, online sales grew 16.1% to about 4.6% of total retail spending, according to the commerce department.
More importantly, we’re seeing that consumers who shop in more than one channel – say online and in-store – spend more over their lifetime. And not by an insignificant amount.
National chain Golfsmith stated last year that customers that bought from them in more than one channel outspent one-channel customers by a factor of four. Golfsmith’s CEO additionally commented that customers who shopped across all their channels had probably 10 times the lifetime value and they were working to cultivate that in every way possible.
Numbers like that are hard to ignore. And the point of it, I believe, is not about price and discounting. It’s about convenience and being where your customer wants to be, and being available to them on their terms. Consider that the younger age groups where we struggle as an industry, consumers in their 20s and 30s do about a quarter of their shopping online. It’s where they expect to find you.
The independent bicycle retailer has remained vibrant and, well, independent, to a large degree, because of the unique service-oriented nature of bicycles. Along with the mechanical requirements of selling and servicing bikes, stores can also add value as sources of knowledge, inspiration and camaraderie. But can stores truly expect customers to continue buying most of their gear in physical stores going forward? Are you adjusting to a future with more ecommerce?
Retailers will need to continue to adapt to remain relevant. Even national mass-merchants like Target are suffering from being showrooms for purchases that are ultimately made online at ecommerce powerhouses like Amazon. Target is working to evolve their online strategy while working with suppliers to devise a solution. Are you?
Companies like SmartEtailing, Trek and, most recently, QBP have announced new programs and platforms for retailers to integrate ecommerce into their operations. Many retailers have already added online shopping components to their sites. Physical retailers can no longer think of ecommerce as the enemy or even as a side venture. It’s time to put down the hammer and reach into our tool boxes for some creative new solutions and be aware of how your customers are behaving to reap the rewards of serving customers where they are shopping – and stay relevant.