By Randy Brasche, Euclid Analytics
For the past several years, we’ve heard the over-hyped online vs. brick-and-mortar debate. Prominent techies like Marc Andreessen loudly proclaim the death of physical retail, while members of the brick-and-mortar retail industry say e-Commerce will never gain dominance. Pitting physical retail and e-Commerce against each other is an oversimplification of what is happening — both are continuously evolving, and we are now at a phase where the success of one channel is intricately tied to the success of the other.
Online businesses can rigorously track consumers’ shopping behavior, identify trends, and use algorithms to calculate exactly how much of a product to manufacture, buy and/or stock. Physical retailers have taken note, and are exploring how they can make more data-driven business and operations decisions. That being said, in both cases, a physical store plays a critical role in the path-to-purchase, with many retailers employing an omnichannel approach to cater to hyper-connected consumers who want personalized, synchronized and multi-device retail experiences.
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This year’s Black Friday clearly demonstrated why purely offline or online are no longer competitive. Here’s why:
Physical Stores Are Still Critical To Moving A Customer From Awareness To Purchase
Shoppers need the in-store retail experience — the ability to touch, try and trial merchandise is largely irreplaceable online. In fact, retailers have been capitalizing on the opportunity to engage shoppers in the physical world, especially during the busiest shopping season of the year. Based on the millions of domestic shopping sessions we measured for the month of November, engagement rate — the percentage of shoppers that remained in-store more than 20 minutes — increased 1.4% year-over-year. This boost in engagement validates the ongoing strides that retailers have made to keep shoppers in their stores long enough to drive a purchase.
Singular Black Friday Focus Fades
The fluidity between online and offline couldn’t be more obvious than in the dwindling concentration of Black Friday as the primary shopping day. With greater convenience and options provided through mobile and digital channels, shoppers no longer feel the impetus to shop on a singular day.
Furthermore, let’s consider the 50:50 data split: more than 103 million people shopped online, according to an annual survey commissioned by the National Retail Federation, as compared to 102 million people who visited traditional brick-and-mortar stores.
Omnichannel Retailers Solve Loyalty
Hard work is paying off for the retailers that have aligned their online and brick-and-mortar operations. Specifically on Black Friday, omnichannel retailers such as Best Buy and Target experienced success with their ability to tie store and online promotions together. However, retailer success stories like these are still few and far between.
As seen by our data, loyalty declined 0.10% month-over-month and 1.5% year-over-year in November. Shoppers seek the same brand experience across mediums. Shoppers appreciate the experience of being in a store and the convenience of having purchases delivered to their door with just a few clicks.
The reality is that most consumers are not entirely devoted to one channel. Thus, the retailers that can achieve omnichannel nirvana, and most importantly measure it accordingly, will dominate.
Randy Brasche is the VP of Marketing at Euclid Analytics where he leads global marketing activities, including product marketing and go-to-market programs. With a 20+ year track record at enterprise software companies and as an author of three books, Randy is an expert in business marketing and strategy. During his tenure at Oracle, Brasche was a core member of the marketing team that evangelized Larry Ellison’s vision of a $500 “Network Computer,” which ultimately revolutionized the personal computer market dominated by the “Wintel” monopoly of the late 1990s.
