Opinion

How online retailing has forced physical stores to step up their game

massimoPhysical stores remain as relevant to the customer experience as ever, says Massimo Volpe, who argues the digital world has forced the in-store concept to raise its game.

A conversation topic that resurfaces from time to time in my regular interaction with POPAI members and associates revolves around a rather loaded buzzword that has been popping up more frequently in the past couple of years – millennials.

“How can we connect with them?”

“What makes them click?”

“What does this mean for physical retailers?”

“Will we have to switch completely to online shopping in future?”

Unsurprisingly, any mention of millennials in a conversation related to the retail industry would inevitably lead to a discussion about the importance of e-commerce, as traditional physical retailers consider the challenges that lie ahead of them in a future shaped by a generation of tech-savvy consumers.

According to the U.S. Census, they will comprise a good third of the population by 2020 and account for more than $1 trillion in consumer spending according to the Boston Consulting Group.

Contrary to strong opinions about online retail having hijacked the relationship between brick-and-mortar retailers and consumers, I happen to think that developments in the virtual marketplace have in fact afforded physical retailers a prime opportunity to better connect with a growing generation of upwardly mobile individuals.

They have effectively forced the industry to rethink the way they engage with consumers in order to optimize their brand marketing strategies not just with their generation, but also with baby boomers and Gen Xers.

A study released by TimeTrade earlier this year not only strengthens my views on this issue, but also revealed some interesting facts about modern consumers:

Millennials could be an unrivalled consumer demographic

For retailers who get it right, that is.

A recent survey indicates that over 90% of respondents aged between 18-34 plan to shop in stores as often if not more so in 2015 than in 2014, and 92% will walk into a store having already decided on or shortlisted what they wish to purchase to just 2-3 products. 87% of participants indicated they would buy more than they intended to when shopping in a store.

Mobile shopping is not THAT popular

While millennials are nearly twice as likely to make mobile purchases than consumers 35 and older, mobile shopping is not as powerful as a point of purchase as it seems.

According to a study released earlier this year by TimeTrade, more than 42% of consumers have never bought anything on their mobile devices, and of those of have, nearly 70% have only done so 1-5 times.

Referencing the same study, only 13% of respondents indicated that they would make a purchase from their mobile devices

A majority use mobile shopping platforms as part of the information gathering process before making a purchase decision (50% to research products, over 60% to compare prices, and 46% to locate the nearest physical store).

Brick-and-mortar concepts are still alive and kicking.

…if anything, they are becoming an increasingly importance part of the retail experience. Despite the influence of social media and online shopping platforms, physical retail stores are still relevant to modern day consumer culture, and will continue to be so for as long as the human factor remains important to customers.

It was reported that 85% of consumers still like shopping in stores because they like to be able to ‘touch and feel’ products before making a decision, and that is a tangible aspect that as of now still cannot be replaced online.

Even traditional e-tailers such as Amazon have opened up brick-and-mortar stores in order to provide a more personalized experience, and that, I feel, tells me that physical retail and online retail concepts share a symbiotic relationship in which they reinforce each other to provide today’s consumers with a stronger customer experience.

There is no doubt about the fact that the dynamics of in-store experiences are changing, but with the right balance of retail tools, both online and physical, it is most certainly possible for one to effectively engage an evolving market with a growing millennial demographic.

Massimo Volpe is the Vice President of Global Memberships at Point of Purchase Advertising International (POPAI), which will be holding its Asia Summit tomorrow and Wednesday at Marina Bay Sands.

 

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