The retail world has never been more complex, and consumers worldwide have set the bar high for retailers, in terms of what they expect from them.
No longer just a matter of curating an in-store experience, the retail industry is an intricate balance of a store, technology and socio-economic influences. The consumer path to purchase is not a simple funnel from awareness to purchase. Consumers are treading their own path to both online and in-store purchase, and this path is based on efficiency, convenience and pleasure.
The physical store is still important
Whilst the physical store remains at the centre of shopping, with the highest frequency of visits from consumers, we are seeing global trends of an increasing influence from mobile and social on the purchase journey. It is still early days for both mobile and social networks in terms of retail, however year-on-year we are seeing significant jumps in consumers turning to these channels to connect with retailers. For example, a study by IBM showed that between this year and last, “Sales from mobile devices jumped over 25%…. People logging onto shopping sites from their smartphones or tablets accounted for almost half of traffic on [Black] Friday.” (source PwC)
What we can deduce from trends is that mobile devices and social networks are important not for actual transactions, but for everything before that: consumer interaction, decision making, information checking, stock checking, store location, adding value and communication.
Digital and social media in retail are still in the early stages
Many smaller retailers are only just feeling the effects of their online presence, but the effects are definitely there, so it is important to get involved now, whilst it is still growing. An important place to start is SEO of both your website and your social media pages, as 56% of consumers start their product research on a search engine(sourse PwC).
With infinite information at their fingertips, consumers are more informed and empowered than ever before. Whilst this has led to a decrease in impulse buying, it has also led to more purposeful shopping by consumers. If you regularly keep up with our blogs, you will know that consistency across all channels of your business is key to conversion. This is particularly so in retail, due to ‘web-rooming’. This means that it is becoming ever more popular for consumers to research products or retailers online and then make purchases in-store, so consumers need to find consistency from web to store.
Where have these consumer habit changes come from?
It may be surprising to some that such a drastic change has come about in consumer habits, however, if we consider that the millennial generation, a.k.a. the digital natives, are reaching adulthood, it is easier to understand the evolution and digitalisation of the purchase journey.
What role does social media play?
Social media is an ideal way to support brand image awareness. For millennials, social media provided more value than previous generations (although it did still add value for previous generations), the survey found millennials were far more likely to follow, discover, research and interact with brands, products and retailers on social media, than any other generation. What is more, interactions with favourite brands on social media proved to be very important to the digital native generation, with 66% saying that this interaction would lead them to buy more from them (source PwC).
We know that younger generations view shopping very differently to previous generations, so we need to adapt to this tech-savvy wave of shoppers, who are just reaching their prime money-earning years. Retailers need to take full advantage of technology to understand their customers, and add value to their path to purchase.
What does this mean for you, the retailer?
Even if you are not seeing actual revenue from your social channels or mobile sites, do not assume that they are not contributing to the consumer’s decision – quite the opposite. It is becoming increasingly important to nurture your online presence as a retailer, and add value for your consumer, in order for them to complete the purchase journey.