When Deloitte Digital’s Rod Sides laid out the context for a presentation on the importance of data in retail on the opening day of NRF’s Big Show, it became immediately clear that the idea of in-store vs. online shopping is long gone.
The presentation in a monstrous hall at the Jacob Javits Convention Center was called “From Data to Delight: An Insight-Driven Revolution of the In-Store Experience.” But it wasn’t so much about juicing in-store sales, as it was about how to leverage digital experiences to sell online, in-store or wherever customers want to buy.
“We’re in a new norm,” Sides said, pointing out that the country’s gross domestic product has been growing at about 2 percent annually, lately, similar, he said, to retail sales growth. “It means we’re in a slow-growth mode. We’re having to take market share from each other.”
Sides described Deloitte research that showed consumers are generally dissatisfied with the retail experience and that they appear to like online shopping better than in-store shopping. However, he noted that there are aspects of in-store shopping that consumers prefer to online.
Those findings present retailers with physical stores with some opportunities. Here are five takeaways we gleaned from Sides presentation:
Don’t think in terms of in-store vs. online: Physical stores are still huge when it comes to retail sales, given that more than 90 percent of purchases still happen in stores. But digital is now a key part of in-store shopping, influencing $1.8 trillion a year in retail spending by Deloitte’s last accounting. (Sides apparently updated the figure in this study.)
Play to your strengths: Yes, consumers like the convenience and selection that online shopping provides, according to Deloitte’s research, but all is not lost for physical stores. Deloitte’s survey of 2,000 shoppers and its analysis of 500,000 tweets found that consumers prefer the return experience in stores and that they like being able to examine and consider certain products in person.
Shopping is both a transactional and emotional: Consumer really do want to connect with retailers, product brands and the shopping experience. Don’t forget about the emotional side of consuming. Deloitte’s research found that 47 percent of respondents were satisfied or extremely satisfied with the transaction end of commerce — finding what they wanted, getting through checkout etc. Not great. Even worse? Only 41 percent said they felt an emotional connection with the shopping experience.
Different data for different goals: Sure, data is the magic bullet in retail, but think about what data you need to accomplish what you are after. If you’re selling baby and toddler products, you might want data around safety ratings and durability. If you’re selling apparel, it might be much more important to understand the supply chain and just how much of which styles you have in stock.
Differentiate, differentiate, differentiate: In a time when low retail sales growth indicates that retailers are mostly taking market share from each other, it is more important than ever to stand out. Deloitte’s research shows that retailers that are able to offer unique products and a customer experience that is out of the ordinary, are seeing sales growth of 13 percent. Those that are selling me-too commodities are seeing sales declines.
So-called “new normals” can be disconcerting and even scary. But new normals can also provide new opportunities. The next round of retail winners and losers will be defined by who is able to seize those opportunities and who lets them slip through their hands.
Mike Cassidy is BloomReach’s storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.