Omnichannel sale is all about meeting customer needs and, regardless of the purchase, physical stores play a big part in this process. Whether a cashmere jersey or a gold bracelet is purchased online after admiring it in a physical outlet, these stores remain the basis for both online and offline sales. This concludes A.T. Kearney in the ‘Omnichannel Shopping Preferences Study’, based on a survey among 2,500 American consumers.
Over the past years, online shopping has grown spectacularly into a billion-dollar industry, and in many markets eCommerce has become an indispensable part of society. Yet despite the rapid development of eShopping and the hype it has created in the retail and online industries, a research from consulting firm A.T. Kearey shows that physical stores should not be forgotten. To the contrary, the importance of having a physical store remains essential.
Physical and digital
The research shows that 90% of all retail purchases are still done in physical stores, and a total of 95% of the purchases are related to a physical store. For example, a purchase may be ordered online, but prior to that 'tested' in a physical store. Furthermore, the research concludes that two-thirds of shoppers that make a purchase online will visit a physical store, either before or after the purchase of a product. Hence the value of physical stores is much bigger for customers and retailers than the purchases that actually take place in that store.
In addition, A.T. Kearney highlights the importance of the 'omnichannel' concept: physical stores help retailers to increase their online sales. The consultants advise retailers to develop multiple channels to optimise their sales portfolio, for instance through a website or application that serves as a lever for boosting the appeal of physical stores.
Benefits physical store
The power of physical stores lies in the fact that customers can try out their purchase, such as the fit of a garment. In addition, brand experience plays a big role, and the interaction with a salesperson can also contribute to the purchase experience, for example through valuable advice, and a salesperson can increase the pleasure of the purchase, by ensuring that the customer leaves the store with a good feeling. One can also take the purchase directly home, instead of having to wait for the delivery, which is the case with online purchases.
When a product is purchased online, and it does not meet the buyer's requirements, customers prefer to bring the product back to the nearest, physical store. Additional benefit for retailers is that in about 20% of the cases, customers that return an online purchase in a physical store in fact make an additional purchase in the store.
Customer Journey determines preference
To better understand the preferences for on- or offline shopping, A.T. Kearney examined the so-called ‘customer journey’ that customers go through during their decision-making process. Distinction is made in five phases: Discovery (the product is discovered), Trial and Test (the product is tried out), Purchase (the product is purchased), Delivery or Pickup (the product is shipped or picked up), and Return (the product is returned). In every phase, the researchers looked at the preference of customers to opt for either online handling, or handling in the physical store.
The results emphasize the popularity of the physical store. As many as 35% of the respondents choose for handling in the physical store, and 15% only use the online channel during the discovery phase, and use the physical store for the rest of the purchase cycle. Only 10% of the customers use the online channel for each phase.
Half of all customers, however, prefer an omnichannel approach, in which both channels are offered. Around 7% of customers choose to discover the product online, try it out in the physical store, and arrange for the purchase and delivery online, but then return the product in the physical store again. And 6% use the physical store in each phase except for the delivery. Approximately 5% of the respondents choose to try out the product in the physical store and to handle the rest online. The smallest percentage, 4%, discovers a product online and arranges the pickup/delivery also online, but chooses the physical store for the rest of the process. Finally, 18% choose for one of the other 25 omnichannel combinations within the online-/offline spectrum.
Although retailers will increasingly intensify their eCommerce focus in the coming years, A.T. Kearney concludes that retailers will remain the foundation of retail. A strategy based on the presence of a physical store, complemented by online, has the greatest chance of success. Successful retailers will allow customers to make a purchase when and where they want. The omnichannel strategy will keep adapting to this: it's not a matter of physical or digital, but by joining these two channels, with the physical store as the foundation, retailers will have the best ability to respond to the future needs of customers.