Retailers need to ensure they don’t lose customers in the digital divide between physical stores and e-commerce.
The retail digital divide is where brands stop being able to track customer purchasing cycles between the two siloed sales channels.
Alison Kenney Paul, vice-chairman and US retail distribution leader at Deloitte, said retailers are focused on website measurement and basket abandonment, but they can’t see when a customer who fails to transact online is likely to visit a physical store to buy goods they researched online.
“We know customers browse online without the intention of buying, but we still view these as failed conversions, even though they may come into a store and purchase,” she told delegates at the National Retail Federation (NRF) conference in New York City.
“If we’re not following the whole shopping journey, it’s difficult to say whether or not that sale was made,” she added.
“We’re at a pivotal point – digital should no longer be a separate part. We have to rethink how we measure, organise and invest in digital and physical, and how to bridge the divide.”
Linking online and in-store sales channels
Joining her on stage at NRF, Mike Rodgers, chief customer officer of the American department store JCPenney, reflected on the power of omni-channel, claiming that 69% of its customers browse online before coming to a store and 36% use mobile devices while in-store.
JCPenney has also calculated that if it can convert 10% of its store customers to become omni-channel customers, that would represent a revenue opportunity of £1.2bn.
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But the main takeaway from the conference is retailers need to have a balance of physical store and digital capabilities, with research from Deloitte stating that 90% of sales still happen in a physical store.
“The physical store is not dead, and many of the pureplay dotcoms are opening showrooms and physical stores themselves,” said Paul.
“But shoppers are relying more and more on devices than in-store sales associates,” she added, claiming some 80% of shoppers prefer to use a device or kiosk for help than talk to a human being in-store.
Additionally, smartphones are influencing 19% of in-store sales, but many retailers are holding mobile teams responsible for sales only made through the mobile channel.
“Are we measuring things right?” she asked, stating that 84% of shoppers use digital channels to research before and during a shopping trip.
Gamestop balances stores, mobile and online retail
During the NRF keynote on 13 January, US game and electronics retailer Gamestop described how it was investing in its stores as well as its online and mobile capabilities.
We have to rethink how we measure, organise and invest in digital and physical retail, and how to bridge the divide
Alison Kenney Paul, Deloitte
Gamestop, which sells 50% of all games sold in the US, has more than 6,000 stores around the world, including in Europe. It no longer has stores in the UK, selling instead through its UK website, but Tony Bartel, president of Gamestop, still believes strongly in the bricks and mortar proposition, alongside digital technologies.
“It all revolves around the epicentre of the store,” he said. “Customers know they can come in and have a great experience. The store is where the magic happens, and we believe service still matters.”
Gamestop offers a number of digital initiatives and marketing initiatives, from its Power Up rewards scheme, which has one in five penetration in the US, to its specialised Gamestop Technology Institute stores, which act as a testbed for the latest technologies.
Bartel said two-thirds of customers coming into a store will have been on the website in the 48 hours prior to their visit, while people who come through the website use the Gamestop trade programme twice as frequently, which increases incremental sales for the retailer.