Online-To-Offline: An Integrated Approach To Retail

By Smriti Kataria, Near

The combination of digitalization and e-Commerce
has exerted significant influence over the retail landscape, with online-only
dealers rising in prominence and traditionally offline outlets working hard to
compete in the online space. Despite this online explosion, McKinsey &
Company estimates that in 2020 approximately 80% of U.S. retail sales will still happen
in brick-and-mortar stores.

The potential lure of offline sales is
so strong that, as competition stiffens and retailers seek new avenues of
growth, more retailers are realizing the benefits of having a physical store
and are making moves to head in this direction.


Amazon is one of the most recent examples.
The company’s experiments with Amazon Go highlight an interesting point for
other online retailers looking to get in on the brick-and-mortar game: online
retailers know the online shopping habits of their customers, but may not
possess the information about their offline shopping behavior.

In order to complement their online
success with offline success, here are five ways retailers can leverage data to
maximize the potential of their prospective physical stores:

Understanding Business
Value: Offline Vs. Online Channel?

Before planning for their offline retail
stores, online retailers need to understand the business value of their offline
strategy. To get a sense of whether an offline approach would be worth the
effort, answering a few key questions is important:

Why are they worth the investment?

Will you have more returns? By when?

Do your consumers mostly prefer online?

Would it be easy to poach your competitors’

Will your products have the same appeal to
consumers offline as they do online?

What is the sales split you expect across
channels — in both volume and value?

How do you see this changing in the long term?

Are you setting up the store as a sales channel
or a product experience channel?

How will you capture data from your offline
consumers, and tie it back to your online consumers? Will this help you provide
an omnichannel experience to your existing, as well as new consumers?

Up An Offline Store

Once online players have a firm grasp of
the value their storefront will provide, they need to identify the right place
to open up shop. Data will allow them to analyze vital information, such as:

Their competitors’ store footfalls;

Their competitors’ audience;

Digital behavior vs. offline behavior of their
own consumers;

Where their consumers live;

The commuting patterns of their consumers;

How far their consumers travel to get to their
store vs their competitors’ stores; and

The affluence level of their consumers.

These insights can help retailers decide
whether they should set up their store in areas with higher rents and property
value or those with lower rents and greater access to different brands.
Finally, the footfall information can help them determine if they should be
negotiating on store rent costs.

Hiring Right

Data can help retailers inform on
staffing decisions — quality as well as quantity. If the foot traffic is high
in the area, they’ll need to have more talented staff members. If the store
will experience higher footfall on weekends, they can consider hiring skilled
staff for that time or moving their high-skilled staff to the respective stores
on weekends.

Online retailers can capitalize on the
data they’ve collected from their online store to achieve quicker success in
their offline forays. For instance, they can cull insights from their online
data to educate their in-store staff about the profile of shoppers, informing them
about the types of products customers prefer so that they can creatively engage
each shopper as an individual.

Going Omnichannel

Once they establish their offline store,
retailers can use the data they collect to run timed promotions in areas where
the majority of their consumers are located and targeted to their audience.
Going omnichannel (online and offline) provides even greater value as it
expands the amount of information available to the retailers and gives them
access to deeper insights into their customer base.

For instance, let’s say as a retailer
you know from online data that “Shopper A” searches for sports clothing apparel
on a particular day in the morning and does the same in the evening from home.
Combining this knowledge with offline data, you can start to build a deeper
profile: a professional, interested in sports, in the 25–35-year-old age
bracket, visits sports centers on the weekends. With this information at your
fingertips you can now engage in some clever marketing, such as showing Shopper
A tailored product offerings on an Internet-connected device when he is seen at
your competitors’ stores. First-party data makes this possible, so it is
imperative that you collect and utilize it to its full potential.

Remember To Invest In A
Data Intelligence Tool

Consumer data is exploding. Retailers
need to have the right tools in place to make sense of consumers’ online and
offline data so that they can make smart marketing and business decisions.
Invest in data management tools that can integrate diverse data sets relevant
to your business so you get the actionable intelligence necessary to gain a
critical business edge in not just retail, but every industry.

Smriti Kataria currently leads Near’s Global Marketing & Research
initiatives, where she is responsible for developing and leading the company’s
communication and steering demand for the Ambient Intelligence platform. She
also manages Near’s data and consumer research business. Prior to Near, Kataria
was heading brand and market communication for Bharti Airtel, the third largest
telecommunication provider globally. She has years of diverse experience in
sales, marketing, product management and new business development.

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