The battle between online and offline retail is old news, and today’s smart retailers are embracing a cohesive cross-channel experience. While e-commerce is growing rapidly, brick and mortar locations are here to stay. In fact, the two channels can act synergistically, with brick and mortar experiences driving digital purchases and online advertising prompting in-store visits. As retail successfully adopts a cross-channel strategy, there will also be a growing need to measure and manage the offline experience with the same rigor as e-commerce. Here are some great examples of how retail is embracing online married to offline:
Digital Revenues from Brick and Mortar Stores
GameStop has one of retail’s largest footprints, with over 6,500 store locations worldwide. A huge chunk of revenues come from digital goods ($724.4 million in 2014), and the majority of digital revenues come from brick and mortar locations. At GameStop, it’s all about providing a great experience for customers looking to purchase digital goods. This retailer invests heavily in experience in stores and trains associates to aid customers in understanding and finding downloadable content. In sum, the company is aggressive in driving digital sales, but using brick and mortar as the primary channel. This VentureBeat article summarizes how GameStop successfully blends online and offline.
Online Retail Moving Offline
As cited by Forbes, the trend in 2013 was pure-playing online vendors moving into offline shopping. Companies like Warby Parker and Bonobos, which grew loyal customer bases online, felt the increasing need to create offline shopper experiences. Retailers like Burberry, Saks Fifth Avenue, J. Crew, MAC, and Sephora have created multiple touch points for customers, and will also need better tools to measure and manage these touch points. Part of pure play e-commerce’s success come from the ability to tightly manage the digital experience, whereas offline retail still needs to catch up in leaps and bounds.
Ramping Up the Offline Experience
Mall REITs are reacting to e-commerce as a challenge to ramp up offline experience. Mall operators see physical retail as necessary where “customers can come and experience and touch and feel and try on the goods”, but also understand the need to make shopping more experiential. “Whether it’s a movie theater, restaurant, or in some cases grocery stores, you’re trying to make something that can’t be replicated online,” Busch said. “You’re making the mall much more experiential, as opposed to just retail-driven.” This increased investment in customer experience harkens the importance of understanding how visitors are interacting with locations and where spend is making the most impact.
e-Marketer, in a piece on cross-channel shopping, recently noted: “According to a November 2013 survey of US digital shoppers by consulting firm Accenture, 78% of respondents reported ‘webrooming,’ or researching online before heading to a store to make a purchase. At the same time, some store trips eventually led to a digital purchase. The same Accenture study found that 72% of respondents ‘showroomed,’ or bought digitally after seeing a product in a store. Consumers, then, have merged online and offline into a single shopping experience.” In other words, it doesn’t matter where shoppers end up buying; both channels are part of the path of purchase.
What’s Happening Offline?
As sales between online and offline are blurring, one key missing piece is the feedback loop of what’s happening in store locations. The online world has a wealth of data and reporting such as Google Analytics that provides regular feedback on digital performance. Yet, for many retailers, the feedback loop on visit behavior offline is missing. Many online campaigns (i.e. social media) are run with the intent of bringing more shoppers in stores. Without a location analytics platform and better investment in offline CRM, retailers lack the necessary insight to determine ROI and make data-driven decisions. In marrying the online and offline experience, connecting the dots and measuring customer experience across both channels will be vital.