Retailers: It’s time to capitalize on digital influence

May 13th, 2015 by Kasey Lobaugh | Mobile and WebStrategy

Digital influence is accelerating and changing the face of retail. Retailers need to expand their view of the digital channel beyond the “buy” button to harness opportunities to drive sales and more accurately measure success. Our latest retail study, “Navigating the New Digital Divide,” is now available to report the latest on these trends.

Digital is fundamental to the entire shopping experience, both in and out of the store. It is essential to success across the entire retail business—and we’ve just released new research that shows it.

Deloitte Digital has been monitoring retail and consumer shopping trends for three years through our annual digital influence study, and recently released “Navigating the New Digital Divide.” The numbers are clear: digital influence continues to accelerate and shift the ground under the feet of retailers large and small alike. Here are a few to think about:

  • Digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015, or $2.2 trillion.
  • 76 percent of consumers surveyed interact with brands or products long before stepping into the brick-and-mortar store, and are therefore making digitally influenced decisions much earlier in the shopping process.
  • 70 percent of shoppers say they no longer turn to retailer or brand advertisements for inspiration. Instead, they look to independent bloggers, friends and family, or even strangers, for trusted information about products—expressly because these influencers are not tied directly to brands.
  • Social media users are four times more likely to spend more than non-users on purchases as a result of a digital shopping experience.

The implications of these numbers are enormous. What’s more, the study also found that retailers are often caught disproportionally assigning digital investments to support their e-commerce business, which represents 6.5 percent of total retail sales. This loses sight of the remaining 93.5 percent, or $4 trillion of sales, occurring in the physical store.

So that retailers might seize the power of digital to more effectively drive in-store sales, we have identified three critical actions:

  1. Measure digital engagement along all points of the customer journey, not just digital purchases. Digital sales alone, a metric used by most retailers to measure the success of their digital strategy, miss the bigger picture. Retailers that fail to measure the influence of digital along the entire path to purchase risk missing its true impact and its potential to drive sales.
  2. Create a digital strategy based on the buying patterns found in your retail category. Shoppers are defining their own journeys and more often doing so at the category or product level. How a customer gets inspired and informed to buy shoes may differ greatly from how he or she buys groceries or a television. In the food and beverage category, digital influences 31 cents of every dollar spent in the retail store, but that figure doubles to 62 cents for electronics. This shows the significant variations in digital behavior and influence between categories—and your strategy must reflect that.
  3. Put digital at the core of your in-store shopping experience. Thirty-four percent of shoppers are using digital while in the store, which should raise the stakes on how retailers leverage digital to create a more valuable in-store experience. Many consumers have also already decided what to buy by the time they reach your front door, fueled by sources of information they trust that are often not controlled by the retailer.

These are some of the highlights from this year’s study that reveals a lot about consumers’ evolving behaviors—it’s truly worth a read in its entirety. But if you take away nothing else, the message to retailers is clear: Retailers must understand their customers’ path to purchase, and they must build a series of digital touch points to meet their needs along the entire way.

Kasey Lobaugh is a principal, Deloitte Consulting LLP and Deloitte Digital’s chief retail innovation officer. He co-authored “Navigating the New Digital Divide” with Jeff Simpson, director, Deloitte Consulting LLP and Lokesh Ohri, senior manager, Deloitte Consulting LLP.

blog comments powered by Disqus

Topics

Search