In a Retail Times exclusive, Andy Wood, managing director at database marketing and loyalty schemes specialist, GI Insight, argues high street stores are becoming the showrooms for online shoppers and staff must adapt to provide consumers with a seamless shopping experience across all channels
Shoppers today have an array of browsing and purchasing points to choose from, so understanding the multi-channel habits of the modern day consumer is becoming ever more crucial in the successful management of customers.
One of the great faults in Mary Portas’ recent review of the British high street is the scant attention it pays to the impact of digital media on the future of retail. While physical stores on the high street remain the flagship for retailers, the shape of the sector going forward is now also intrinsically linked to online activity: the high street is becoming a showroom for online shoppers.
The future of retail rests in the coexistence of channels, with the high street, web, catalogues and other media all playing their role in the shopping process. Indeed, the latest research from GI Insight clearly demonstrates, despite the boom in online shopping, consumers today still use high street stores – and other bricks and mortar outlets such as shopping malls and retail parks – to examine and test a great many products prior to final purchase.
The research, which takes in the response of more than 1,000 UK consumers (and is representative of the UK by age, income level, social class and location), reveals when it comes to favourite retailers, 63% of respondents say they purchase from both a brand’s website and its high street store, confirming UK consumers are not wedded to a single purchasing channel when it comes to the companies they prefer and buy from most.
The research also shows many shoppers use physical stores as, in effect, showrooms for examining and trying out products before actual purchase, even if they ultimately intend to buy online. In particular, customers are most likely to visit a physical store when considering the purchase of bulky items and style products, 73% disclosing they prefer to test items such as bicycles, playpens and furniture in-store first; whilst 69% reveal their predisposition to try on clothes, shoes, accessories and other fashion products before they buy.
However, the reverse is true when it comes to uniform products such as CDs, DVDs and books, which are exactly the same regardless of retail outlet. Since it takes little to no examination to size up such products – after all, a Downton Abbey box set is a Downton Abbey box set wherever you buy it – 68% of consumers are happy to give the high street a miss and buy directly online, confident their purchase will not proffer any surprises.
It is thus clear UK consumers are not wedded to a single purchasing point, a finding supported by their choice of outlet for redeeming loyalty points: 54% say in-store, 46% say online. Taken with the other results, these findings indicate retailers should not presume customers will necessarily redeem their points via the same channel through which they purchased.
Indeed, having established UK consumers tend to buy both online and in-store from their favourite shops (and thus, intuitively, the brands for which they are most likely to hold a loyalty card), savvy retailers will avoid offering rewards which are channel exclusive. Customers are multi-channel shoppers and no benefit can be gained in trying to tie them down to a particular virtual or physical location.
What’s more, shopping is no longer a one-dimensional activity taking place in a physical marketplace – it crosses channels, involves ‘communities’ providing feedback and reviews from pretty much anywhere and, often, the medium the shopper uses to browse is not the same as the purchasing point. Where a purchasing decision used to be a relatively private affair, consumers now actively engage with the social side of retail, canvassing opinions and recommendations not only from their immediate social circle but from friends within their social networks, too.
With online behaviour progressively permeating the high street – and GI Insight’s research showing there is logic to consumer behaviour across multiple channels – it is thus remarkable Portas’ review largely ignores the role of digital. Indeed, since the vast majority of UK shoppers take a multi-channel approach to buying, Portas has overlooked a fundamental reality: consumers using a range of channels to shop – not those tied to a sole purchasing point, including the web – are key to the future of any retail brand and ultimately the most valuable customers.
Recognising, then, bricks must coexist with clicks, what role do store based staff have in this new multi-channel environment? If stores are to be more than just an outlet for purchase, acting also as a showroom for the online channel, staff need to be ‘assistants’ in the broadest sense, equipped with detailed knowledge of both products and purchasing options.
For instance, store employees should be asking questions about a customer’s preferred method of purchase or whether they have checked the company’s website. If the assistant feels the customer is researching a product in store with the intention of later purchasing online, they could issue a limited time voucher for a web purchase, linking the customer (and their loyalty) to both physical and virtual stores. Currently, there are very few cases in which retailers provide an incentive to purchase from the brand’s website while research is carried out in-store. This needs to change.
Brands must develop customer relationships which harness multiple touch points so consumers get more from their retail experiences – whether perusing in-store, checking a catalogue, browsing online or receiving an offer on a smartphone. This process can start even before a customer goes online or into a store looking for a particular product, with a longer-term communications programme that uses data to address the consumer’s behaviour and build loyalty through tailored offers demonstrating genuine insight.
Understanding the importance of the high street for online, and vice-versa, is crucial as retail evolves across physical and virtual domains. Since consumers are able to switch between online and offline channels to inform purchasing decisions, creating a consistent multi-channel experience, rather than operating in silos, is critical. Contrary to Portas’ recommendations, it is the understanding and implementation of multi-channel that may well save the high street, encouraging customers to remain loyal and make more purchases with brands who truly respond to their behaviour and needs.