retail

Digital, Mobile Impact On Retail Hits $2.2 Trillion

How much does America love its smartphones? So much that Deloitte Digital reports that digital interactions now influence 64 cents of every retail dollar spent, or $2.2 trillion by the end of this year. But behaviors are changing fast, with 30% fewer shoppers using their phones to check prices this year, for example, and more of them using them as sources of shopping inspiration. Overall, it finds that smartphones’ impact on sales jumped to 28% in 2014, up from 19% the prior year. 

While total e-commerce sales are $300 billion, it says, or 7% of total retail sales, digitally influenced store sales were more than five times higher, reaching $1.7 trillion last year.

The new report also confirms that mainstream retailers, despite intensive investments in e-commerce, continue to fall behind, with the top 25 retailers giving up 2% of combined market share. “We are seeing a real change in the competitive dynamics, with digital as the great equalizer,” says Kasey Lobaugh, principal, Deloitte Consulting LLP and Deloitte Digital’s chief retail innovation officer, in the release. “The findings indicate that the large retailers are collectively losing ground to the much smaller competitors.”

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The study, based on just over 3,000 respondents, also confirms that digitally-driven consumers buy 20% more often, and that those using social media while shopping are four times more likely to spend more. Hispanic and Latino consumers are the most likely to be influenced by digital, at 49%, compared to 32% across all ethnic segments. And 41% of Hispanic and Latino shoppers say they spend more as a result of digital activities, compared to 28% of the total sample.

Conventional retailers have been intensifying their efforts to build their omnichannel business, but still finding that competing with the digital juggernaut is complex. Macy’s, for example, which just logged earnings and sales below analysts’ expectations, is reporting promising response to its participation in Plenti, a digitally driven loyalty program in partnership with American Express. Still in the early weeks, it has already generated 2 million signups. 

Sales for the first quarter slipped 0.7% to $6.23 billion, and also declined 0.7% on a same-store basis. Net income fell to $193 million from $224 million in the same period a year ago.

“We had expected our first quarter sales to grow at a rate lower than our guidance for the full year,” CEO Terry J. Lundgren says in its announcement. “We fell short because of a confluence of factors. Delayed merchandise shipments from the West Coast port slowdown and severe winter weather early in the quarter restrained business levels. Moreover, sales were negatively affected by lower levels of spending by international tourists visiting major U.S. cities with flagship Macy’s and Bloomingdale’s stores, including New York City, Chicago, Las Vegas and San Francisco.”

5 comments about "Digital, Mobile Impact On Retail Hits $2.2 Trillion".
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  1. Neha Mallik from Mobstac, May 25, 2015 at 6:43 a.m.

    Those are some intriguing facts! We always knew that mobile plays a very important role in a customer's journey, and these facts just prove it right. It's for the same reason that retailers are investing in beacons. From Macy's to Lord and Taylor, to House of Fraser, every brand now realizes the importance of marketing to a customer, using his/her most personal device - the mobile phone. What are the best says to do so? Here are some tips that will be very helpful: http://bit.ly/1xXAKhu

  2. Chuck Lantz from 2007ac.com, 2017ac.com network, May 25, 2015 at 5:25 p.m.

    "But behaviors are changing fast, with 30% fewer shoppers using their phones to check prices this year"   This is an intriguing stat.  Anyone know the reason for this dramatic drop?

  3. Doug Garnett from Protonik, LLC, May 26, 2015 at 5:29 p.m.

    Yikes. That's a leap.

    First, the research is really bad - it's asking for self-reporting about influence. We've known for more than half a century that people are extraordinarily ill-equipped to accurately discuss their behaviors around media.

    Secondly, "influence" is a very fuzzy - and probably tiny impact. Let's suppose the research actually WERE important (which it isn't). Then "influence" could mean that the media affected .001% of the decision on that 60% of purchases. In that case the headline should really be:

    "Digital, Mobile Impact On Retail Hits $22M"

    And that would elicit one massive, huger than you can imagine...yawn. Which is, it seems, exactly what this research should elicit.

  4. Ed Papazian from Media Dynamics Inc, May 26, 2015 at 5:51 p.m.

    So 30% fewer people are using their mobile phones to check on prices this year----hmmm? But smartphones' "influence" on sales jumped by 28%. Not that I believe either statistic----especially the latter-----but aren't these "findings" somewhat contradictory?

    Using the same kind of research plus interpretations there-off, it might be interesting to see what the impact of TV, radio, newspaper and magazine ads were on retail sales. When they figure that out, then we can move on to word-of- mouth, promotional price-offs, how stores utilize their shelfspace, how courteous their people are, etc. Add up all of the possibile "influences" on sales and you will probably get a number like $5000 trillion sales influenced one way or another. Then you can plot share of influence by medium and other factors. Won't that be grand.

  5. Kevin Horne from Lairig Marketing, May 27, 2015 at 11:17 a.m.

    "30% fewer shoppers using their phones to check prices this year"...

    Chuck Martin's head just exploded...

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