This article appeared first on LinkedIn.
Everyone in the industry has something to say about the state of retail. From predictions surrounding the end of the high street to forecasts about the shape of the workforce, the opinions you get very much depend on the experts you choose to follow.
There is, however, one thing all the pundits and commentators agree on, because the evidence is too strong to be denied. Now that the power to control the transactional dialogue between retailers and consumers lies firmly in the hands of customers who want to be able to shop seamlessly across all channels, having a digital element in your physical store is the only way to survive.
Getting the numbers to stack up has always been a challenge for retailers who know they need a digital store strategy but are reluctant to commit time and money to something new which hasn’t had the figures to back it up - until now. The early adopters and digital pioneers are starting to see results, and they can’t be ignored:
1. Customers spend more in digital stores
The number one concern for retailers is attracting and retaining customers who regularly buy products – it’s why so many businesses are happy to invest in loyalty schemes. Here’s where the digital store is most obviously proving its worth:
- according to Forrester, retailers have seen omnichannel customers spending up to 22 times more overall than single-channel shoppers, with digital touchpoints driving all sales
- Harvard Business Review’s report on research by customer feedback experts Medallia suggests 13% greater in-store spending among omnichannel shoppers, with 23% more repeat shopping trips to the retailers’ stores
- data analytics specialists Aberdeen Group have established that retailers with the strongest digital store strategies retain an average of 89% of their customers, compared with 33% for retailers with weak strategies
2. On-demand fulfilment is a top digital store enabler
Customers expect it, offering it cuts costs and increases sales, and you can’t have a truly connected retail experience without it. From click-and-collect to cross-border flexible logistics, on-demand fulfilment has proved itself as an essential element of the digital store:
- each failed home delivery costs the retailer £151 on average, according to Barclaycard. IMRG estimates around 1.3 billion parcels were delivered last year, with an average 10% increase year-on-year until 2020 – it’s clear that giving customers the option to collect from store or have their goods delivered somewhere convenient will rapidly repay any investment in fulfilment
- offering customers the option to collect online orders or return them in-store increases purchase volume. Forrester reports that as much as 60% of online sales are picked up in-store, and up to 40% of those customers buy additional products when they arrive to collect their goods
- having a simple, flexible returns policy adds to your bottom line. Retailers who have turned their returns process into a positive customer experience, including quick refunds and the ability to return online goods in-store at no cost, can expect to see sales increase. According to research by UPS and comScore, 82% of shoppers said they would be more inclined to complete an online purchase if the retailer allowed free returns to a store
3. Personalisation increases sales volume and value
Retailers need to invest in digital store services to match customers’ ‘any time, anywhere’ shopping mindset, but it’s just as important to make them feel valued as individuals. It pays to invest in building a relevant, context-specific, tailored experience which gives a consistent view of each customer on a personal level:
- data from global business analysts Infosys shows that 100% of surveyed retailers offering personalised services have experienced at least one benefit from this technology, including:
- increase in sales (74%)
- increase in profit (61%)
- increase in customer loyalty (55%)
- around 50% of shoppers will spend more with retailers who have made the effort to engage with them as a single, unified organisation by streamlining customer service and combining customer data and digital tools, Forrester reports
- according to research by data management professionals Segment, 40% of shoppers said they had bought something more expensive than they intended because of a personalised recommendation from a retailer, and 44% said they would become a repeat buyer after a personalised experience
The evidence couldn’t be clearer, and the numbers couldn’t be more positive – if retailers want to exist tomorrow, they need to start building their digital store today.