Online or Store? Do I have to choose?
The last couple of years have seen an ongoing tug of war between the online and brick-and-mortar shopping channels. Pure play online retailers have tried to increase traffic and conversions on their websites. Similarly, Brick-and-mortar retailers have tried to persuade consumers to purchase products from their stores.
The net result has been gains and losses on both sides. Showrooming started out as a prevalent trend and was a cause of concern for small and medium sized shopkeepers. Brick-and-mortar retailers fought the Showrooming trend and seem to have succeeded for now in countering it with Webrooming, and persuading the majority of consumers to return to the stores to make purchases. A 2014 A.T. Kearney Omni-channel Consumer Preferences Study has concluded that around 67% of shoppers prefer to purchase products in stores.
So what is the ideal prescription for a typical Retailer looking to draw customers and increase sales? Store purchases appear to be winning for now, so is it a winning retail strategy to drive traffic into stores? The curious thing about the apparent victory of in-store shopping is that it has been achieved not by marginalizing the online shopping channels but instead by embracing them as a core component of a shopper's journey, and providing shoppers in the store with ways and means to access online information such as product reviews and price comparisons, leading to the rise of the connected store.
So does the consumer prefer stores or online as their shopping channel? The answer from the majority of respondents to the A.T. Kearney survey seems to be, "Do I have to choose?" - an average of around 47% of shoppers prefer to use the store in the Discovery phase of their shopping journey, 80% for Trial, 67% for Purchase, 55% for Pickup and 73% for Returns. When A.T. Kearney asked shoppers to choose from 30 possible shopping journeys utilizing various combinations of channels, they discovered that 55% of consumers prefer a shopping journey that utilizes both the online and store shopping channels at different stages of the journey.
In the omni-channel age, a customer no longer visits a specific shopping channel of a Retailer such as the web or a store, because this is no longer how he or she views the brand. The customer sees the brand as a whole, and consequently his or her shopping experience with the retailer spans the entire brand experience which includes multiple shopping channels for the most part.
If the goal is to increase overall sales as opposed to the sales in just a single channel, Retailers must adopt the Omni-channel view of a customer's shopping journey instead of the traditional and myopic channel-specific view, whether they are looking at Marketing, Merchandising, Sales, Logistics or Customer Service. Trying to sell on just a single channel won't cut it anymore - retailers must market and sell across channels. Retailers offering only a single shopping channel must consider going omni-channel, and those with multiple channels must provide a unified and seamless shopping journey spanning across channels.
For the time being, consumers are headed in an Omni-channel direction. While some consumers may continue to favor specific channels in certain categories like apparel and furniture (for store shopping) or books and music (for online shopping), retailers in general must embrace and attempt to enhance the Omni-channel shopping experience for customers, in order to grow and sustain sales in the long run.