Andy McNab, UK managing director of S4M, takes a look at what retail marketers have to do to stay relevant as the boundaries blur between online and offline shopping experiences.
eCommerce penetration in the UK is projected at 79.9 per cent this year and will climb to 74.4 per cent by 2022. Is this the first signs toward the end for physical stores? If anything, the opposite is true, the rise of eCommerce presents huge opportunities for offline retailers. The key battleground among retailers is being able to bridge the online and offline shopping experiences.
Why the sudden rush to converge online and offline retailing? This is much more than just adding another channel to stay at the forefront of shoppers’ minds. Traditional and eCommerce retailers both know that blurring these boundaries helps to boost orders, tap into massive purchasing data potentials and leverage brick and mortar stores as a last-mile delivery centre. Physical stores can also contribute to the lifetime value of a shopper by reducing product return rates, encouraging repeat purchases, and boosting average shopper spend.
Traditional retailers and ecommerce giants are already moving to converge online and offline retail experiences. Digital native players, like Amazon and Alibaba have already expanded into brick-and-mortar boutiques in the past year. The Alibaba group opened a chain of stores across China called HEMA, and announced 30 more to open this year. Likewise, Amazon ventured offline with their Whole Foods acquisition.
Traditional retailers are also starting to catch on. In the UK, the fashion retailer, Zara, recently tested an inventory-free shop in London letting shoppers touch, see, try and inspect products in-stores. To purchase an item, they will leave the store empty-handed, and place an order online via tablets in-stores or at home with same day delivery. All signs point to the need for new retail shopping experiences, shoppers have also come to expect more than just cashier queues in shops. The next generation of offline retail will go further to build in-store communities with coffee shops, art exhibitions and cultural spaces.
As the future of retail becomes our present reality, how can digital marketers keep moving in the same direction? In the multichannel marketing mix, advertisers should actually focus on the mobile channel to bridge online advertising with offline impact in real-time. Advertisers can now target shoppers based on their proximities to the points of sales. They can then optimise digital investments in drive-to-store campaigns based on real-time results like visits into stores and shift their media buying to the best performing audience targeting. We are entering a new age of digital media measurements that converges online and offline impact during the campaign lifetime instead of post-campaign tests and surveys for effectiveness.
The future of retail will blur the boundaries of online and offline shopping experiences. Marketers will have to focus on adapted strategies like drive-to-store campaigns to adapt to this new reality. One thing is for certain, measurement is key to differentiate incremental shoppers and those who would have otherwise visited the store regardless of the online campaign.