How eCommerce Is Changing The Retail Landscape
As people gain access to new forms of technology and shift what they choose to spend their money on, retailers and eCommerce sites need to make a change to their marketing strategies in order to adapt to current times. While we are often filled with headlines of store closures, the merge of eCommerce and offline shopping has delivered a better shopping experience resulting in good news for consumers.
Accounting for more than 90% of total retail sales, brick and mortar shopping is still king. However, the eCommerce industry expanded by 12% in 2017 compared to the 2.8% of retail stores. The driving force behind that online growth is mobile. It’s no wonder why, with people spending around 5 hours a day on their smartphones and 90% of those users using devices in stores while shopping to compare prices through other eComm sites.
More and more online retailers are using this to their advantage, eCommerce retailers are opening physical stores to expand and become more accessible to shoppers. These businesses are able to take what they’ve learned from business in an eCommerce landscape and apply it to their brick and mortar stores giving their customers the physical interaction they desire.
This movement hasn’t boded well for many of today’s traditional retailers. Popular department stores have suffered resulting in the closure of their stores. Primarily because their business model relies on physical expansion rather than investing in the online eCommerce shopping experiences that so many of their modern day customers tend to favour.
The Consumer eCommerce Context
It’s a no-brainer that the way people shop has changed, and significantly so over the last century. If you look at the trends, success comes down to three factors: convenience, spontaneity and experience. While the classic department store brought everything under one roof for suburban shoppers, eCommerce gives people the opportunity to purchase from brands wherever they may be.
Each of these formats then needed to be not only functional but inviting and immersive. Department stores and malls once invested in elaborate displays, food courts and events. While online stores measure the effect of every pixel and button. Today, in order to succeed, brick and mortar retailers need to adapt to the current context of eCommerce.
It is not a matter of digital vs traditional retail; today’s retailers need to think about how they can build out eCommerce operations that service their customers efficiently.
Embracing The Customer Mind Set
The traditional purpose of a physical store was to drive transactions. People went inside, primarily to purchase. That’s why so much of a stores floorplan, labour and customer interaction tended to be centred around the cash register.
However, recent times have seen customers go into a store to browse, make a decision and purchase through the brands eCommerce store. This trend is coined as “showrooming” and is often a major contributing factor to the closure of brick and mortar stores. Retailers that are spending time and money investing in a physical location are resulting in disappointed staff that are failing to meet sales targets each time someone walks into their store, then searches for better prices online. Here is where businesses should be embracing the forever growing realm of eCommerce.
Retailers need to shift their focus and start giving customers what they’re after. Don’t fight “showrooming”, embrace it. America has seen numerous brands develop studio showrooms where customers can go in, get fitted, consult a stylist and process returns just like any other retail store. However, they can’t actually take the purchases home, they are then directed to making purchases through the brands eCommerce site.
These “showrooms” don’t have a stock inventory, but they are giving customers the experience they’re craving. Resulting in smaller stores with significant savings on rent, staff and expenses.
Creating The Experience
When so many customers prefer to shop through eCommerce platforms, the old numbers focused system is no longer working. In today’s market retailers need to analyse and improve their in-store experience with the use of a wide range of technologies.
Fashion stores, for example, working with RFID tags is a fantastic way to track the on floor stock. This can assist retailers in discovering what products customers are simply not interested in or whether the item is taken to a dressing room and then left behind. These data trends can be looked into further by speaking with floor staff and then a strategy can be devised to help improve sales moving forward.
This RFID technology can also be used to help perfect the store floor plan and product placement to see what is getting the most attention and why, and what is being missed.
Lastly, a number of strategies, such as the ever-increasing eCommerce ‘click and collect’ can be used in physical stores to boost online sales. Overall, it is all about enhancing the customer’s experience, regardless of whether the transaction is completed in-store or through an eCommerce site.
In reality, the rumours of a retail demise have been greatly exaggerated. “Retail is dead”, it’s nowhere near. It just needs to be reinvented to suit customers wants and the digital eCommerce landscape.
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