Of course, retailers are under pressure from onliners particularly for commodity products. Indeed, Amazon is now the fifth biggest retailer in the UK accounting for £4 in every £100 spent in retail in the UK last year. Considering it sells non-essential items with no physical retail presence, its success reflects the company’s ability to understand the consumer’s needs in terms of product range, ease of purchasing and delivery. According to analysts, GlobalData, it’s estimated that Amazon accounted for 33.5% of all online spend in 2017, growing 22.5% compared with the UK average of 8.4% last year for online sales.
Without doubt for certain products, there is less of a need to visit a bricks and mortar store. Technology has seen to that and consumers are tech savvy enough to make that choice. But it’s important to recognise that the vast majority of retail sales are still done in the store. For many products, there is still a need and desire to touch and feel the product. Equally, it’s important to distinguish between what’s happening to retailers in the high street compared to the shopping mall. Clearly with the former, too many stores have been replaced with a different type of retail outlet with pound shops, betting shops and charity shops making the high street less appealing for consumers. Retail parks on the other hand often buck the trend by attracting more consumers.
Online and In-store should be complementary
Those brands that have adopted an omni-channel approach clearly have an advantage of capturing the consumer’s spend whether that transaction is online or in-store. However, those that can also recognise that both can offer complementary but different experiences will certainly provide a stronger engagement with their customer. Research, reviews, product information, range, ease of search, stock, delivery options are all pre-requisites for online success. Indeed, according to the Retail Marketing Group (RMG), the main reasons consumers cite for shopping online are centred around price (42%), choice (24%) and the ability to have the product delivered (38%).
The store now needs to provide a reason for the customer to visit and return. In-store experience is more important than ever. Whilst, it’s possible to watch any number of explainer videos online (and they provide a very useful service), the real value of a purchase can only be fully experienced by seeing it first-hand. After all what does a 4K, UHD and Ultra HD television mean to the average consumer. Not surprisingly research from RMG highlighted the top three reasons consumers give for shopping in store is that they want to experience a product before making the purchase:
- 51% prefer to go and look at a product
- 27% want to check its quality
- 24% want to feel and use the product before buying
If that experience can be enhanced by the sales assistant then you have a powerful combination. Research from TimeTrade maintained that 90% of consumers are more likely to buy when helped by a knowledgeable assistant and the RMG survey revealed that 44 per cent were prepared to impulse buy even on a high-priced ticket item if the in-store help was executed well. Indeed, as we have mentioned in previous retail trends, the use of technology that creates a better shopping experience is also important. VR/AR will become more widespread which can add both excitement and practicality, and mPOS will make the purchasing a slicker more efficient way of transacting. However, the power of human interaction cannot be under-estimated and this presents a key differentiator from shopping online.