Mobile's Retail Power Comes From ... The Couch?
So much for hordes of on-the-go shoppers powering mobile sales: Research from Kantar Retail reports that smartphone owners are more likely to use their devices at home or at work, not while traveling or in stores. But that’s just one way that retailers continue to misunderstand digital and mobile’s growing influence on sales, says Anne Zybowski, VP/retail insights, who leads Kantar digital research and insights.
“Digital’s impact on retail sales is fully 100%,” she says. “But it’s a mistake to look at online sales as a measure. We think it is more like 10:50:100, with digital accounting for 10% of sales, 50% of influence, and 100% impact.” She fills Marketing Daily in on the distance that brick-and-mortar stores need to go to catch up with their digital footprints.
Q: What’s the benefit of using a formula like 10:50:100%?
A: We arrived at that using multiple data sources. In part, it was as a result of the frustration people were having internally at retailers, not getting support for digital, which can mean either marketing or commerce platforms. People are not always sure what piece they are looking at.
Right now, we’re getting close to 10% of all sales happening online; we’re at about 8.3% now. But that misses the broader picture, especially when you look at consumables. Today, those purchases online are low, but they are set to explode. Yet even if consumers are not buying your product online, their digital experience is influencing all their behaviors.
Q: But not in ways that stores expect?
A: Right. Like they worry about showrooming -- people researching purchases in-store, than buying them online. The reverse is much more common.
Q: What about mobile? This was supposed to be the holiday when m-commerce came into its own. Did that happen?
A: In some ways, especially for some types of retailers, including flash-sale sites like Rue LaLa. But shoppers aren’t necessarily using their phones in the ways stores predict. Our ShopperScape research, for example, found that 40% of smartphone owners are using them for shopping-related activities from the comfort of their own homes, and 21% made a purchase there. We’re lazy -- we’re reaching for the device that’s closest to us. By comparison, just 27% used them in stores, while only 7% made a purchase by phone.
Q: Where are retailers missing the boat on channel integration?
A: In some ways, it’s like retailers are going through the five stages of grief with digital. This time last year, there was lots of anger. Now, they are getting around to acceptance. They are making sure there is available Wi-Fi in stores, for instance. And Best Buy and Target have everyday, year-round price matching. But there are still gaps. They often think in terms of multichannel. Consumers are omnichannel. And there’s a big difference.
Q: Who do you think is doing it best?
A: Nordstrom is really exceptional in understanding how to use digital to solve business problems. If you’re buying a pair of $400 shoes, and there is an associate with a tablet who can assure you they aren’t available for less on Zappos, that solves a problem. That’s connecting channels.