Why Retail Stores Are The New Black

Why Retail Stores Are The New Black
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Retailers are discovering that every aspect of their digital experience – site, mobile, app, email – must have an in-store component, according to new research by digital marketing bench marking outfit L2.

The study called Intelligence : Omnichannel Retail study which was developed in partnership with RichRelevance, examines the efforts of 116 U. retailers and 18 European brands and highlights the disruptors and innovators in the space.

For instance, in the ‘luxury’ category Gucci and Louis Vuitton posted omnichannel gains in 2015 buoyed by ecommerce capabilities, while in the prestige category Nordstrom and  Neiman Marcus emerged as omnichannel leaders; while J Crew drops back in ‘prestige’ reshuffle.

Using US department chain Macy’s as an example, the study notes, “In 2008, it was clear Macy’s was going out of business. Fast-forward to 2015 and the iconic retailer’s stock keeps setting new all-time highs on the heels of a sweeping reorganization that aligned channel teams. The street’s continued love affair with omnichannel has catalyzed a race to the middle, as online pure plays open terrestrial stores and traditional retailers bulk up their digital offerings. The battle for retail’s high ground is the middle, where digital serves as the connective tissue between site(s), store, inventory and consumer.”

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According to Maureen Mullen, co-founder and head of research at L2, “Brands excelling at omnichannel are providing inventory transparency across channels, leveraging their brick and mortar footprint as fulfillment centers, and using technology to enhance customer engagement.”

Mullen said that in 2012, only one in seven consumers visiting stores were touched by digital; now it’s every two out of three consumers. “The biggest mistake a brand can make is size their digital investment to their eCommerce business. To be successful in omnichannel retail, brands should be scaling their digital investment to the size of the overall business.”

Other key findings included:

  • In-store pick-up lags. Only 31 per cent of US retailers offer click-and-collect capabilities for online shoppers (compared to 88% of European retailers who offer this feature).
  • Email drives store traffic. The use of email to promote online and in-store sales, store-only sales and hybrid fulfillment all showed gains in 2015, while the amount of emails showcasing online-only sales dropped from 35 per cent to 31 per cent.
  • Retailers take back control of free shipping? The number of aspirational and prestige brands offering free shipping by price point continued to dwindle in 2015 (to 66 per cent and 72 per cent respectively.)
  • Real-time inventory visibility is at a tipping point. Currently 48 per cent of US retail brands have real-time in-store inventory visibility (up from 36 per cent in 2014) compared to 50 per cent of UK brands and 46 per cent of EU brands. The outlier is luxury with only eight per cent providing this capability.

“A retailer’s ability to unify customer and product data across online and store systems is the single greatest factor determining omnichannel success,” said Diane Kegley, CMO, RichRelevance. “Achieving a true 360-degree view of the customer allows retailers to expand and strengthen omnichannel capabilities, and go beyond the status quo to develop entirely new experiences that respect the shopper’s goals, behavior, context and moment-to-moment relationship with a brand and its products.”

This article originally appeared on B&T’s partner site www.which-50.com

 

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