One of the most impactful innovations of the past three decades is the smartphone. Although the term “smartphone” wasn’t used until 1995, IBM introduced the first smartphone — a gadget called the Simon Personal Communicator — three years earlier. That was a decade and a half before the iPhone was introduced. The smartphone has impacted our lives in many ways; not the least of which has been changing the way we shop. Shopping often begins with searching and Dan O’Shea reports a 2017 study published by BrightEdge determined “mobile searches on Google now represent about 57% of all search traffic.”[1] O’Shea adds, “The ultimate takeaway from this study goes a little something like this: Mobile is happening, people. Get with the program.”
The Digital Path to Purchase
Getting with the program means making mobile strategies a priority in your marketing efforts. Why? Because mobile not only dominates search efforts, it impacts sales as well. To underscore this point, research from Periscope By McKinsey found “consumer packaged goods (CPG), once purchased almost exclusively in stores, are quickly moving into the digital realm as more and more consumers are researching and purchasing CPG products online.”[2] Daphne Howland (@daphnehowland) reports a Forrester study found “just over half of retail sales in the categories studied — online sales plus digital-influenced offline sales — were impacted by a digital interaction.”[3] Robert Williams reports another Forrester study found, “Mobile commerce sales grew 29% to $153 billion in 2017 from the prior year, making up one-third of online retail revenue.”[4]
Those results might lead some people to conclude they should pursue a “mobile-only” strategy; but, Howland indicates that would be a mistake. She explains, “After years of surging, mobile commerce growth is easing up, and is now no greater than e-commerce growth, according to the report. Last year, 65% of U.S. online adults accessed the internet from a mobile phone daily, versus 71% the year before.” Williams explains this leveling-off trend reflects the fact that “more than two-thirds of today’s online buyers are already mobile buyers, leaving less room for growth.” Williams also notes, “Mobile shopping still lags behind desktop platforms for big-ticket items, Forrester found. The average order value on desktops is $155 while mobile’s is $120. Smartphone order value is gradually rising at 4% a year, slightly faster than desktop’s growth of 3%. That difference indicates that shoppers are using their mobile devices to research and browse for big-ticket items, but are more comfortable making purchases for things like designer goods or pricey electronics on a desktop.” So what kind of digital path to purchase strategy should retailers pursue?
Multi-touchpoint Strategies
The Periscope by McKinsey study found significant consumer interest in multichannel touchpoints. Consumers from France (40%) and UK (39%) exhibited the greatest interest in multi-touchpoint shopping followed by German (33%) and U.S. (32%) shoppers. Howland reports the Forrester study supports the importance of leveraging a multi-touchpoint strategy because the mobile touchpoint is cooling off. She explains, “Just 28% [of survey participants] said they made purchases on mobile at least monthly in 2017, down from 35% who said they did so in 2016.” Retailers, however, have been slow to adopt multi-touchpoint strategies. Howland reports, “Only a little over a third (36%) of retailers Forrester surveyed had buy online, pickup in store in place by 2016, and just 7% implemented it last year, according to the report. Yet, according to another Forrester report, … multi-touchpoint consumers are very valuable, and, by 2021, digital touchpoints will influence 41% of U.S. and 38% of E.U. offline retail sales.” Tracey Wallace asserts, “Omni-channel may be an industry buzzword, but the need for it … cannot be ignored. Most brands sell in more than 1 place.”[5] Wallace provides a “non-exhaustive” list of multi-touchpoint options. They include:
- Webstore
- Brick-and-mortar
- Amazon
- eBay
- Houzz
- Alibaba
- Wholesale
- Etsy
- Pop-up Shops
- Events + Markets
Wallace believes the list will only grow longer as retailers get more creative with their multi-touchpoint strategies.
Digital Path to Purchase will continue to Grow
Howland reports another Forrester study concludes, “U.S. online retail sales will exceed $506 billion this year and by 2022, will surpass $712 billion. Nearly all American adults — 98% — already go online at least once a day.”[6] The report also supports the importance of implementing multi-touchpoint strategies. “More than half — 53% — of the $3.7 trillion U.S. retail market,” the study predicts, “will be driven through digital touchpoints by the end of the year. E-commerce is also quickly moving into the devices in people’s hands: More than $1.3 trillion of U.S. retail sales will be impacted by smartphones in 2018.” What does this mean for retailers? It means they must pay close attention to both prices and presentation. Howland explains, “For a while now, it’s been pretty clear that U.S. shoppers expect lower prices online, and the research from Forrester found that 61% of adults here believe they find better value and deals online while roughly half also say that the product information found online is more useful than what’s available in the store.”
Retailers are in the midst of what has been called a Retail Apocalypse and in-store sales representatives have felt the brunt of the collapse. Dominic Rushe (@dominicru) reports, “The retail sector has been the biggest loser of jobs for the last two years in a row in the US, as thousands of stores closed as shoppers moved online.”[7] The loss of jobs has affected women more than men. Rushe reports, “Between November 2016 and November 2017, the sector fired 129,000 women (the largest loss for any industrial sector for either sex) while men gained 109,000 positions, according to an analysis by the Institute for Women’s Policy Research (IWPR).” Obviously, many of these job losses have been the result of store closures. Other losses, however, have been cost-cutting measures. Eliminating in-store sales representatives could backfire. Howland explains, “Research has found that retailers are losing customers fast as frustration builds when store associates are nowhere to be found. A third of shoppers who experienced a problem at apparel stores were not able to locate sales help, for example, and 6% of all possible sales are lost because of lack of service, according to a report from the Massachusetts Institute of Technology’s Sloan School of Management late last year.” Howland believes part of any retailer’s multi-touchpoint strategy must recognize “the importance of knowledgeable store staff. Other research has found that retailers are losing customers fast as frustration builds when store associates are nowhere to be found.”
Summary
Although the importance of the digital path to purchase continues to increase, retailers are beginning to understand it involves both online and offline sales. That’s why omnichannel operations and multi-touchpoint strategies are beginning imperatives in the retail sector.
Footnotes
[1] Dan O’Shea, “Study: 57% of Google search traffic is mobile,” Retail Dive, 5 September 2017.
[2] Periscope By McKinsey, “Online Purchases in CPG are Trending Up, Consumer Survey Shows,” Cision PR Newswire, 11 April 2018.
[3] Daphne Howland, “More than half of retail sales are influenced by digital,” Retail Dive, 2 April 2018.
[4] Robert Williams, “Forrester: US mobile sales jumped 29% to $153B last year,” Mobile Marketer, 11 April 2018.
[5] Tracey Wallace, “The 19 Ecommerce Trends + 147 Online Shopping Stats Fueling Sales Growth in 2018,” BigCommerce, 2017.
[6] Daphne Howland, “Forrester: US e-commerce will top $712B by 2022,” Retail Dive, 19 April 2018.
[7] Dominic Rushe, “The US retail industry is hemorrhaging jobs – and it’s hitting women hardest,” The Guardian, 13 January 2018.
