Online Budgets Must Support In-Store Buying

Bryce MarshallPlenty of research released over the years has documented that even as more and more shoppers make use of the internet, people still like to make final decisions and purchases at retail.
These are commonly referred to as cross-channel shoppers. The typical behavior pattern is for the cross-channel shopper to use the internet to research products, narrow their options, read reviews and search for deals. Then, especially when it comes to electronics and clothing, they drive to the store for the final purchase. Recent research suggests this trend is growing; for every $1 spent online $4.68 will be spent in-store as "online influenced" purchases.
Online Research

The impact of online product research is greater on store sales than Web sales. In 2008, Web-influenced store sales will reach $625.2 billion, eMarketer forecasts. From 2007 to 2012, online-influenced store sales are expected to grow at a 19% average annual rate. By 2012, every $1 of online sales will equal about $4.68 in store sales influenced by the Internet.

The Disconnect
A couple years ago we had some discussions with a very well known high-fashion retailer. This retailer has a prestigious brand name, an established brick-and-mortar footprint, and a healthy direct-shopping operation through catalogs, website and frequent emails. However, as our discussions started to focus on mobile tactics, one very key deal-breaker came to the forefront. The direct-shopping organization managing the catalog and online operations was a separate entity from the brick-and-mortar retail operation – different budgets, different decision-makers and different objectives bound virtually only by a common brand name. In essence, the direct-shopping operation was unwilling to budget for tactics such as mobile marketing infrastructure if this means the sale would be made at the store location. Not only were they unwilling to budget for these tactics, but there was also an apparent sense that coordinating such operations would be challenging if not completely unwelcome proposition for both operations.

It’s frustrating to see organizational shortcomings impact a brand’s connection with their customers. How many dollars are left on the table for a high-end retailer who ignores established purchasing behavior?

How to Connect In-Store and Online
I am a typical cross-channel shopper. Some purchases I’ll make online. If it’s a retailer I know and whose product quality I trust or a clothier with whose sizes and fabrics I’m already familiar with, I’ll buy online.

But for anything else, I prefer the in-store experience. Some examples, trying on clothes to coordinate outfits, viewing resolution and color quality on competing HDTV brands, or testing the tactile qualities of keyboards on different laptops. These things are all important to me, and many other consumers.

Leveraging the direct line to the shopper at the point of retail through the mobile phone – and integrating this interaction with online channels such as the web and email – is a game-changing strategy for hybrid retailers. The mobile phone is the ultimate channel for supporting the existing habits and preferences of the cross-channel shopper. As your shopper researches online while planning their shopping, here are pre-established points in the research-travel-shop-buy cycle that hybrid retailers MUST support:

  • Shoppers can send their shopping cart or shopping list to their phone, including SKU or product number, size/color, etc. to allow the shopper to find precisely the right product
  • Shoppers can send their wishlist to mobile phones of friends and family
  • Allow users to send mobile-only coupons directly to their phone for retail-only redemption
  • Let shoppers access product details and user reviews for products while in-store by texting a SKU to a shortcode, or accessing a mobile-friendly web page

Who does this well? Circuit City and Best Buy come to mind. In their competitive retail/online environment, both retailers do a good job supporting the natural buying habits. They take it a step further by offering consumers the option to buy online but pickup at the store. For millions of consumers this is added value.

Conclusion
To go back to the clothing retailer example, technology and fashion are very different universes. But, technology and fashion are both trend-dominated industries where perception, envy, competition and the cool factor play significant roles. In this sense high-fashion and technology are deeply intertwined. For retailers that are ignoring this factor, not to mention the studies released every year that continue to confirm cross-channel preferences, dollars are being lost where they can be gained.

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