Absolutely. Digital redistributes but not very evenly. The paradox is that it both democratises AND creates "winner takes all'. What I ca...
A huge amount of hype has arisen around the negative impact smartphones are having on the bricks-and-mortar retail model. Known as ‘showrooming’, retailers are increasingly anxious that consumers are using the physical store to simply view products, before pulling out their mobile devices to find a better price or offer with an online retailer and completing their purchase elsewhere.
Several pieces of research and industry commentary are fuelling this fire. One example is Google and MARC report’s last year on mobile in-store research, which found 84 per cent of shoppers engaging in ‘showrooming’ practices while in-store. Top behaviours included using search engines on their smartphone to compare prices, and sourcing offers and promotions.
However, new research from global consultancy giant, Accenture, is actually indicating the opposite: That customers are in fact increasingly researching retail purchases online first, before heading into the store to buy them.
The company has coined the trend ‘webrooming’, and is actually warning retailers not to get too carried away with focusing on the digital retail experience at the expense of the in-store one. Instead, retailers need to maintain a healthy balance and integration between the two, and aim to give consumers as much ability as possible to choose the way they want to shop.
“The first thing I’d note is that retailers have been showrooms for centuries,” head of global retail practice at Accenture, Chris Donnelly, said. “If you can’t close the deal when someone is in your store looking to buy, then shame on you. But that aside, what we’re actually finding is that the trend is increasingly the inverse. We call this ‘webrooming’, where a product is researched at home, then consumers go into the store to buy.”
In Accenture’s latest survey of 15,000 consumers worldwide across 20 countries, the group found people located in more advanced countries such as Australia are increasingly exhibiting ‘webrooming’ characteristics.
“This is very encouraging for retailers and it’s also not entirely surprising if you think about it,” Donnelly toldCMO. “Yes, online is the side of retail growing the most in the next five years, and we expect 10 to 20 per cent of sales to be online. But that means 80 to 90 per cent are still occurring in-store.
“Retailers should ask themselves: ‘Am I going too far in driving everything online, and forgetting about the store experience in the process?’.”
Donnelly advised retailers to view the webrooming trend as a reason to rethink their in-store retail experience. “Consumers want the store to be exciting, engaging, and the inventory to be there,” he said. “Stores have to challenge themselves on if they are an ‘engaging’ store. Are they utilising digital, providing great customer service for example? It’s about training employees, and being in a virtuous cycle.”
For Donnelly, the rise of webrooming is unsurprising and shows how integrated digital is in people’s lives. “People have increasing access to information digitally and as a result, customer behaviour has changed and we go to our phone for information online,” he said.
“More people are starting their journey and purchasing cycle online. This could be by searching on Facebook, using search engines or going directly to a retailer’s website. It’s a natural evolution of shopper behaviour.”
The other thing to note is that retailers used to control the entire retail experience – from the advertising, to store experience, and product information. Today, retailers don’t control much at all; the consumer does, Donnelly said.
“Each consumer is piecing together the experience in their own way using their own set of options,” he continued. “On Monday, they might shop on the high street as it’s a social event; on Tuesday, they order a book for work online; Thursday they might start researching a large item they want to buy.
"Webrooming is an important part of how people create their own retail experience.”
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A supporting trend noted by Accenture is what customers are looking for from retailers online. The number one reason is to see if the product they want to buy is going to be in-stock when they go to the store. The challenge, Donnelly said, is that most retailers can’t provide this information online today.
“If you’re starting from scratch, I recommend setting out with that objective,” he said, even while agreeing such capabilities presented technical and logistical challenges for large retailers without sophisticated systems currently in place.
“If you don’t have 100 per cent inventory visibility, you’re curtailing future success. Retailers that provide that information online are the ones that win.”
When it comes to improving the online connection between consumer and retailer, Donnelly said the ultimate goal should be getting the consumer to come to your site. He claimed apparel retailers are in a particularly strong position, to do this, because they tend to have a retail brand people identify with.
“It’s an online equivalent of shopping on the high street and a digital version of old behaviour,” he added. “Once they’re on your site, you can drive additional item sales and promotions.”
Retailers also have to make it easier for people to bring their products into conversation both online and offline, Donnelly said. One example could be having a presence on Pinterest. “In the UK, we’re seeing retailers linking Pinterest with the physical stores through digital hangers,” he said. “It’s about bringing those social components into the physical world.”
Another thing online does well is end-user ratings systems, Donnelly said. “Most physical stores don’t ratings or customer reviews in-store, and that practice needs to change,” he claimed. “You have to link that social component and bring that into the in-store experience.”
Whether consumers ultimately choose to buy online, through social channels such as Twitter, or in-store, what is clear is that each customer will create their own user experience today and retailers must cater for it.
“You can’t lose sight of the store. When online, have that connection into the store and ensure employees know they aren’t competing with online,” Donnelly said. “It’s about it all working together to provide a better experience for the consumer.”