Why omnichannel as you know it is 'dead'
Deloitte report: Retailers need to stop thinking exclusively about the 'buy'—and think more about the journey that got shoppers there.
Ever since shoppers could access inventory and compare store prices with a few clicks on their phone, omnichannel sales have become a big focus for brick-and-mortar retailers. But while retailers are focusing on driving consumers to buy across all channels, they may also be losing sight of the bigger picture: The customer's path to purchase.
In the past, the omnichannel concept was all about connecting different channels to give shoppers the ability to keep shopping, whether in-store, online, or on mobile. But a new report from Deloitte suggests this is something retailers need to re-evaluate. Rather than thinking about connecting different channels and business units, retailers need to adjust their mindset and start thinking of their business as one entity, the report, “Navigating the New Digital Divide,” suggests.
"In a world where nearly everyone is always online, there is no offline," it reads. "So it is not about the digital business, it is just business. It’s not about eCommerce, it is simply commerce."
“The consumer expectation is that retailers will take care of them regardless [of the channel]," Jeff Simpson, one of the authors of the report and a director at Deloitte Consulting, told Retail Dive in an interview. "That’s why we believe this notion of omnichannel is dead.”
The digital influence on stores
Digital across all platforms – desktop and laptop computers, tablets, and smartphones – "influenced" 49% of in-store retail sales in 2014, according to Deloitte.
The inspiration for these purchases came from all steps in the path to purchase. Smartphones alone influenced 28% — or nearly $1 trillion of all in-store retail sales. Compare this to 2012, when smartphones influenced just 5% — or just $159 billion of in-store sales.
The influence of digital and mobile on in-store sales
Credit: Deloitte
But while brick-and-mortar retailers may be quick to acknowledge the creeping influence of digital in their stores, some observers say they still lack the resources to use digital to its full advantage. Rather than merely focusing on the “buy" that digital can help drive, retailers need to focus on the whole consumer journey: before, during, and after visiting the store.
The 'new digital divide'
Retailers are failing to understand and keep up with the growing influence digital devices have on the shopping journey, particularly before a customer enters the store, according to the report. Deloitte describes this gap as the “new digital divide.”
The influence of digital goes beyond in-store buying decisions, the report notes—it affects customer loyalty, traffic, order size, and more. In fact, 64% of in-store transactions will be impacted by digital prior to the consumer coming into the store in 2015, according to the report.
The rapid growth of digital influence on stores
Credit: Deloitte
But while nearly every aspect of the shopping journey is being influenced by digital, many retailers are still failing to leverage digital’s full potential.
Retailers continue to be hyper-focused on on-device conversion rather than the holistic path to purchase, according to the report, which says that can be a grave mistake. There is much more driving the shopping journey than the ability to buy through a digital channel.
“In most cases, retailers prioritize their investment in features that drive on-device conversion, which are not necessarily the same features that the in-store customer wants," the report finds. "This limited perspective fails to appreciate or capture the full value of digital devices as a tool in influencing the shopper’s path to purchase.”
Digital and mobile influence on in-store sales by category
Credit: Deloitte
While some retailers may worry that giving shoppers digital access in-store is conducive to showrooming, the opposite may be true: Deloitte found that digital customers are 30% less likely to compare prices on their mobile phones while in-store than they were a year ago. In fact, almost one-third of customers said that using digital devices during the shopping journey caused them to spend more, with 20% of the same customer group converting in-store at a 20% higher rate than those who keep their devices in their pockets.
Why things are different—and how retailers can adapt
In the recent past, the shopping journey typically started on desktop or tablet then transitioned to mobile as the consumer entered the store. But this pattern is changing as consumers start to use mobile over desktop and tablets to gather inspiration for their journeys — which means retailers need to change their digital strategies as well.
“Many of these retailers are hyper-focused on feature-functions in the store, which is fine if you have the beginning of the journey buttoned up. But if you’re not investing in the beginning of the journey, there is no end of the journey to impact with beacon and store locators,” said Deloitte's Jeff Simpson.
One of the most vital investments that retailers can make to spur pre-shopping inspiration is social media, according to Simpson. Social media is one of the main reasons mobile platforms have become so prevalent in the purchase journey — especially in the post-purchase phase.
Percentage of consumers using social media by category
Credit: Deloitte
While a customer sharing their new shoes post-purchase might not be a key target for retailers who are focused on getting their message to customers with a coupon or ad, Simpson says that they are some of the most important customers to reach on social media.
“Post-purchase for me is pre-purchase for [another customer]," said Simpson. "Post-purchase is the fuel for multiple purchases.”
By laying off the coupons and instead encouraging interaction and fostering relationships, Simpson says that retailers can nurture a cycle of inspiration-buy-share on social media. This is becoming all the more important as consumers begin to side-step retailers for inspiration and look to their peer networks instead.
“When we started this survey 2012, 70% of consumers looked to retailers for info around what to buy and where to buy it," said Simpson. "Just three years later, in the third survey, that number dropped to 30%.”
The end of omnichannel?
The findings in Deloitte's report point to an emerging retail trend: the death of omnichannel, at least as we know it. Rather than viewing sales and penetration through separate channels – mobile, desktop, in-store etc. – and wondering how to connect them all, retailers need to start viewing the customer journey as one fluid movement, free of channel restrictions.
“If 64% of transactions are being impacted by a digital prior to coming into the store, then there is no omnichannel. The customer is already there. It’s so prevalent, it’s just the business. You’ve got to stop thinking about this in channels,” said Simpson.
“The consumer expectation is that retailers will take care of them regardless. That’s why we believe this notion of omnichannel is dead,” he said. “I think this message is starting to resonate with the big brick-and-mortar players."
