PwC: Even With Social, Stores Aren't Keeping Up
While it’s easy to assume that, by now, brick-and-mortar retailers are 100% on board shoppers’ multi-channel preferences, a new study shows they aren’t keeping up with consumers’ online expectations.
In fact, the PwC survey finds, people aren’t waiting for stores, but inventing the multichannel experience for themselves as they go along. “Because most retailers haven't yet created efficient multichannel models, consumers are working it out for themselves, using different channels in ways that best suit them,” the report finds.
“Consumers may choose to research a product in the store - a shoe perhaps - then use their mobile phone to find a better price online, and then call into the retailer's customer service line to order and have the shoe shipped to their home. In essence, consumers are creating their own multichannel experiences by leveraging multiple retailers across a single category or product.”
In fact, in the U.S., 72% of online shoppers consider themselves “very accomplished.”
Social media clearly has a large potential for retailers, with 32% of U.S. respondents saying they use some form of social media daily. (Both China and Hong Kong had higher social-media participation.) Yet overall, only 3% of the survey’s respondents have used it to actually make a purchase.
The study, based on responses from more than 7,000 consumers around the world, found that while most people like online shopping because of its 24/7 convenience, it is the pricing, free and fast delivery, and a wide range of products that appeals to them most. Yet even though retailers would gain an additional margin opportunity of 8 to 12%, 59% of retailers still charge for shipping. In the U.S., two out of three shoppers say they’ll bail out of a transaction if it turns out they have to pay shipping charges.
Online shopping’s appeal is also greater than many acknowledge. While 2010’s online sales penetration of total retail sales was 8%, once grocery sales are excluded, that rises to 11% of all sales. And in such categories as PCs and software, it’s 50%. Online shoppers buy in many more channels than some realize, the survey finds, with more than 90% of global online shoppers buying books, music and films, clothing and footwear online. And more than 60% of online shoppers have made purchases in categories with relatively little online shopping, such as jewelry, watches, sports equipment and outdoor goods.
To make the most of these trends, PwC says, retailers need to focus more on what people expect from their physical stores, as well as the online experience. The store of the future, it says, will most likely be “a showroom where customers come for inspiration, to browse and to physically interact with, and to road test the products, as well as a convenient transaction point and customer service center, where customers come to complete a journey started on the web or to seek service for products bought regardless of the purchase channel.” Shoppers will likely enter these stores “knowing what they want and what price they expect to pay. They are using the store simply as a vehicle for completing the transaction and getting personal assistance that they can't find, or isn't available, on the web.”
By 2015, PwC says, it expects U.S. e-commerce sales to reach $279 billion.