Developing countries are leapfrogging mature markets in their consumption of new channels and digital shoppers across all countries predict physical stores will evolve to become showrooms.
Those are the key findings of a new global report by Capgemini examining the changing nature of shoppers’ retail preferences and rapid innovation of traditional and digital channels.
Its Digital Shopper Relevancy study surveyed 16,000 digital shoppers across 16 developing and mature markets.
It shows shoppers are not loyal to one channel but expect a seamless integration across online, social media, mobile and physical stores. Sixty per cent of respondents said they expect the convergence of retail channels to be the norm by 2014, when a unified shopping experience is expected to become commonplace.
However, achieving this will be a challenge, as more than half of shoppers said most retailers currently are not consistent in the way they present themselves across channels, said researchers.
Key findings from the study include:
The Internet remains the dominant channel
Websites are the most important for digital shoppers across the end-to-end shopping journey in developing and mature countries, with 80% of respondents in developing markets stating the internet was important or very important and with 63% in mature markets. This is closely followed by e-mail interaction. However, channels such as social media, mobile apps and in-store kiosks are growing in popularity as alternative retail channels.
Significant differences exist between mature and developing markets The number of digital-savvy shoppers increases considerably in developing markets and they tend to leapfrog the traditional retail infrastructure adopted by mature markets. Seventy two percent of respondents from India and 69% from China state they purchase more products in a single transaction online than in a physical store, compared with just 31% from the US.
The retail landscape as we know it is set to change
More than half of the respondents from both developing and mature markets said they expect physical stores for increasing numbers of categories will simply become showrooms to select and order products by 2020.
Digital-savvy shoppers will spend more
The study highlighted 56% of respondents are likely to spend more money at a physical store if they had used digital channels to research the product prior to purchase, however 73% of respondents also expect online prices to be lower than those in physical stores.
There is no one digital shopper profile, although women are more engaged when using digital channels
Varied behavioral patterns appear across a number of factors, including age, gender, product category, journey stage and market maturity. The study highlighted that 55% of women shoppers are more engaged when using digital channels compared with 44% of men.
Personalised experiences can deliver for retailers, but not too personalised
Sixty one per cent of respondents said they want online stores to remember their personal shopper history to speed up shopping, however only 41% would want to be identified through smart phones when entering a physical store.
Capgemini’s research highlighted six distinct segments, or faces, of shoppers are emerging who use digital channels in different ways during their shopping journey:
Social Digital Shoppers (25% of total respondent base): The majority of these shoppers are under 35, are heavy users of social media and want to share opinions and experiences through digital channels. They are also active users of mobile applications and trust mobile devices for paying for products, locating items and identifying themselves.
Digital Shopaholics (18% of total respondent base): Early adopters and experimenters; they are the heaviest buyers out of the six segments through the active use of digital channels and devices like smart phone apps and in-store technology. Although men in this segment shop heavily via digital channels, they are less interested than women are in conducting any kind of two-way dialogue with companies.
Occasional Online Shoppers (16% of total respondent base): 56% of these shoppers are older than 45 and infrequently shop online. When they do, these shoppers use digital channels primarily for choosing and comparing products and tracking deliveries.
Rational Online Shoppers (15% of total respondent base): Overall, these shoppers are the second most active online shopper segment and the internet is the preferred channel throughout the shopping journey. However, these respondents have little interest in social media and mobile apps for shopping.
Value Seekers (13% of total respondent base): These shoppers are price-sensitive with little interest in digital shopping and new technologies and are more likely to be women (63%). They shop online primarily to find the best deals on products they know they want.
Techno-Shy Shoppers (13% of total respondent base): This segment does not feel confident in using digital channels and devices and do not see these as important during any phase of the shopping journey. These shoppers include both young and older consumers, with many living in Continental Europe.
James Roper, CEO of IMRG (Interactive Media In Retail Group), the UK’s industry association for e-retail, said: “That e-commerce is continuing to secure its position as a key part of any developed economy is already understood, but its role in developing economies is probably less well known. From our own extensive international research we see the remarkable opportunities for cross-border growth in regions such as Asia and South America, where e-commerce is experiencing a different evolution to that in Europe and North America. As the traditional IT infrastructure was not necessarily there, digital commerce in these regions tends to be going straight onto the mobile platform.”
According to analyst firm Forrester, “Whereas retailers have survived in the past with superior merchandising or premium retail locations, companies now realise that significant investment in agile, multi-channel technologies such as mobile solutions in stores and greater resources toward IT organisations is critical”.*
“In today’s complex marketplace shoppers are in control and retailers need to remain relevant to the digital consumer across the all-channel journey,” said Bernard Helders, Capgemini global consumer products & retail sector leader.
“The industry should not only seek to understand the technology, they must separate hype from reality and, crucially, commit to cross-channel collaboration to stay profitable in today’s tough economic climate. This is critical for retailers to identify who is really using these channels and essential in determining where to make digital investments and how to monetise them. The findings of the report are a call to action for retailers and consumer goods companies to adopt a new approach and harness the technology that’s now available.”
*Forrester Research, Inc. – The New Paradigm Of Retail, December 27, 2011