In retail, it’s not uncommon for in-store and digital revenues to be kept entirely separate. Often, these channels are managed by two separate teams and customers will also be on completely separate journeys. Brands today are faced with the challenge of offering a ‘seamless bricks and mortar to digital experience’. Some are now referring to this as ‘clicks to mortar’, or even as the ‘phygital experience’.
Why is a seamless experience so important?
Customers have embraced (and are demanding) the convenience of online shopping. The influence of smart devices on the shopping journey, (Deloitte¹ refer to this as the ‘digital influence factor’) is shaping the way customers shop and make decisions when making purchases in-store. It’s also setting new digital expectations of retailers in terms of how they help their customers gather information to make future purchasing decisions.
Customers are becoming more smarter and digitally savvy shoppers. They are challenging retailers to deliver more than just a product display – seeking memorable and immersive experiences. We’re seeing more use of augmented reality (AR) and virtual reality (VR). In the future, it’s predicted that brands will likely have virtual stores where customers can browse and purchase products, without leaving the comfort of their own home.
Integrating digital into the customer experience is now a business imperative. It should not be siloed. Retailers should have one customer strategy (integrating both offline and online). A customer and their digital devices are one in the same. They expect the same experience across both channels.
How do you know what influence your digital strategy has on in-store spend?
Australian Post predict that 1 in 10 items will be bought online by next year². That doesn’t mean the 9/10 items purchased in-store will occur without some form of digital interaction – far from it.
Marketers are measuring cost per acquisition (CPA) and online sales, but more often than not, fail to measure the impact of digital to in-store sales. Connecting the dots between digital and physical is certainly a challenge, especially when you consider all of the different platforms available. There are, however, a number of ways brands can begin to measure revenue influenced by digital strategy:
Digital Cards/Loyalty Apps – once a customer has downloaded a digital card or loyalty App, a retailer can send highly targeted promotions to that customer which they can only claim in-store. Brands also use geo-location targeting, sending promotions/offers/incentives to the customer available at their local/closest store.
Email redemption codes – many retailers send email promotions and offers to their customers containing unique redemption codes for each individual customer (no one offer for all). They can only redeem the offer in-store. By bringing the customer in-store, they have the opportunity to cross-sell/up-sell products and offer support/advice for any additional products the customer may be interested in. According to the Australian Post², the most effective marketing channel for Australian shoppers is email, with 39% of shoppers reporting that they heard about a promotion via this channel.
Click and collect – also bring shoppers into store, leading to further opportunities to cross-sell and encourage impulse purchases. Research has shown that 49 per cent of customers were likely to purchase an additional item when picking up their online order³. Product/promotional displays and helpful/supportive staff are extremely important for this to be effective.
Social Media – most retailers are using social to promote products and promotions. But are they measuring its true success? By measuring post engagement and CTR and comparing in-store sales (pre and post promotion), they will be able to gauge an idea of influence the social post had on in-store sales.
According to Satish Meena, a senior forecast analyst for Forrester Research, digital will influence 58 percent of retail sales across the US within the next four years. It’s likely that Australia won’t be too far off that number.
Retailers must invest in an integrated customer strategy. Assess every touchpoint from the customers perspective, and determine how you can enhance and measure digital to in-store and vice versa experiences.
Michael Barnard oversees a team of Customologists with combined talent across strategy, data science, and technology, who help brands understand and influence customer behaviours. Customology are specialists in customer lifecycle management. Contact them at [email protected]