Why The New ‘Hybrid’ Offline And Online Shopping Model Will Supercharge Retail In 2021
When it comes to the future of retail, those that can combine their online and offline channels will be the winners, argues Shopify Plus APAC director Shaun Broughton in this piece.
Over the last five years, the traditional physical ‘bricks & mortar’ shopping experience has been usurped by mobile and online shopping, particularly during the mandatory closures in 2020.
Retailers could now be forgiven for thinking online and bricks & mortar is an ‘either/or’ proposition. However, the fact is, integrating the online and offline shopping experience can make for an even more powerful overall experience than either of these two channels standing alone.
Bricks & mortar still hold the majority share of sales
It’s surprising to note the majority of retail purchases still occur in-store, and it’s a worldwide trend. While 2020 may have skewed this a little and prompted more people to go online, research shows 82.5 per cent of all retail sales still happened inside physical stores up to and including 2020.
Reports also show e-retail sales accounted for 14.1 per cent of all retail sales worldwide earlier this year, and these figures are expected to reach 22 per cent in 2023. Some say this will reach 95 per cent by 2040, but this is speculation this early on in the journey.
One thing is clear: preaching the death of physical stores is premature, and they still make up an important part of a healthy retail journey. This is for a variety of reasons, not the least of which is customer experience (CX).
Customers are tactile, they like connectivity and to see, smell, try and touch what they are buying. They like to talk to a real person if they have a problem, and let’s face it, after this year they like to get out of the house.
Digital touchpoints are vital
However, it is also true to say in store purchases are significantly influenced by digital touchpoints, and vice versa. Studies show 81 per cent of shoppers research a product online before buying it in a physical store.
Consumers research a product online to find the best price, they research to find out more about it, and they research to read other customer’s reviews.
If the online experience doesn’t match the in-store experience, this leads to consumer confusion, disappointment, cognitive dissonance, and customers will be less likely to purchase a product from that brand or retailer on any channel.
O2O is the way to go
Online-to-offline (O2O) commerce is the smart strategy of integrating online and offline for a cohesive, complementary customer experience.
O2O means acknowledging and taking advantage of the fact there will be multiple online and offline touchpoints on the customer journey, and making them work together, rather than as separate entities, can facilitate better profitability through more sales.
Strategies such as customers visiting a physical store to try on an item, and yet ordering the item online while they are in store, and then enjoying delivery, is a good example of an O2O strategy. Similar is allowing online purchases to be returned or exchanged in store, click and collect, virtual consultations, pushing online purchase history to salespeople in store. Another groundbreaking new example is using AR-enabled mirrors to show a customer what an outfit might look like in-store based on their online preferences.
Essentially, an O2O strategy comes down to a personalised, surprise and delight experience. No two customer journeys are going to be the same to purchase. Therefore having a cohesive omnichannel CX strategy increases a brand’s likelihood to attract and retain customers. It does this by offering them various pathways to awareness, discovery and purchase in the way that is most convenient for them – the actual purchase point is secondary so long as a purchase is facilitated.
The benefits of this more united experience could be in the trillions for clever brands. Businesses adopting omni-channel strategies achieve 91 per cent greater year-over-year customer retention rates compared to businesses who don’t, according to a survey conducted by Aspect Software, 55 per cent of companies have no cross-channel strategy in place, and 90 per cent of customers expect consistent interactions across channels.
Importantly, companies with extremely strong omnichannel customer engagement see a 9.5 per cent year-over-year increase in annual revenue, and strong omnichannel companies see a 7.5 per cent year-over-year decrease in cost per contact.
This is a lot of consumer dollars which have not yet been leveraged by the majority of brands who still see physical and online as separate.
How are leading retailers achieving O2O?
The above examples are just a few ways to link the online and offline shopping experience. More brands and linking online and offline to offer the same feel regardless of channel. Leading retailers have ensured personalised online experiences with ideas like virtual appointments using video to give fashion consultation, much like they might do in person.
Retailers are also evolving the purpose of bricks and mortar stores. Culture Kings is a fantastic example of this. The physical store is there to offer a customer experience, without the expectation of sale at that point.
When Culture Kings needed to mimic its trademark in-store experience, online, to achieve better brand synergy so the feeling and vibe on its website felt the same as its famous in-store experience, they needed to make their site unique.
With the help of Shopify Plus, the brand overhauled its ecommerce strategy, posted weekly lifestyle photo and video shoots online, which led quickly to a Shop The Look page, where Culture Kings’ in-house team could curate outfits on the web the way staff might make personal recommendations in-store.
Its online business — which featured four global storefronts selling in three major global currencies — leapt ahead of its in-store sales and has never looked back. Today, 60 per cent of Culture Kings’ revenue comes from ecommerce. Culture Kings can now spend its energy on what it does best – customer experience, with the aim of opening a store in most major cities around the world, true destination shopping experiences complete with DJs, barber shops, and celebrity clientele.
In this way, permanent and pop up stores create immersive experiences to drive foot traffic and educate consumers on product offerings, reinforce their brand’s positioning, and support e-commerce sales.
Magnolia Market is a destination shopping location in the US, and a great example of O2O. In 2015 Magnolia Market opened at the Silos in Waco, which has become as much a tourist destination as point of transaction.
Translating the feeling of shopping at the Silos into an online experience was never going to be a light task. The answer was augmented reality (AR).
The company partnered with Shopify’s AR team to create an app to revolutionise the Magnolia Market shopping experience. Select products would be rendered using the highest-possible 3D photo-realism through Apple’s ARKit. Users of the app could visit a product page, then hold up their phone to watch the item appear in the customers’ own homes.
They knew well that not everyone could visit Waco, nor could they handle Magnolia Market’s goods in their hands before buying. But augmented reality helped bridge that gap, to simulate the personal experience of the Silos as if shoppers were really there. Purchases, whether online or not flowed from the experience.
Moving into 2021, a united online and offline customer experience will only become more important as customers embark on a purchase journey in the way to best suit them. Brands taking advantage of this are bound to prosper in new and exciting ways.
Click here to find out more about how to create a cohesive, memorable and consistent shopping experience.
Latest News
‘The Media Has A Way To Go On Diversity’ – Diversity Council Leader Lisa Annese On Industry Diversity And Why Sunita Gloster Is An Important Addition To Their Board
Few are more qualified than a Gruen regular to knock adland and the media into shape on diversity.
Mike Shows Up At A Wake And Still Hasn’t Seen That Show, In Latest Instalment Of ‘I Saw It On Binge’, Via Thinkerbell
Why is it we pay for 19 SVOD accounts namely due to FOMO but then rarely bother to watch the shows anyway?
Flexiroam Partners With Specialist Agencies To Launch “Ready For Anything” Global Campaign
Do you return from overseas with Bali belly, a possible STI & a huge phone bill? FlexiRoam may help with the last one.
Samsung Unveils Power Of AI To ‘Upscale Every Moment’ With Neo QLED 8K
Got mates who brag about their 83-inch, 10K resolution, OLED screen TV? You're just as bored & baffled as all of us.
Media-Wize Wins AUSCERT PR Account
Media-Wize calls itself "a media training and technology and cyber security PR agency". Think nerds with better hair.
Snapchat Taps Gelato Messina In New Brand Campaign
B&T needs little tempting to scoff more Gelato Messina. Apart from having to go up a size.
Travel Insurer Trippi Draws Ire From The Brazilian Embassy Over Cheeky Brazilian Ad
There's a very fine line between "playful" and "utterly offensive". These ads are almost a dictionary definition of it.
Racing NSW Hits Tabcorp With Legal Action Over $6 Million Revenue Loss
Here's some horse racing news that thankfully doesn't require a silly hat or passing out in a nearby rose bush.
AI Tools Such As ChatGPT Leading To ‘Content Overwhelm’ Among Marketers
Study says tech leading to an avalanche of content for marketers. Not to mention having to read the instruction manuals.
Stake Appoints 72andSunny As It’s Creative Partner
72andSunny nabs Stake's creative. And by that we mean the investment platform, not the nemesis of all vampires.
61% Of Aussies Want Corporate Australia To Stay Away From Social & Political Issues Leo Burnett Study Finds
Do you love a study that appears to fly in the face of every study before it? Be mesmerised by these results from Leos.
Brendon Cook, OAM, Inducted into the OMA Hall of Fame
Other than Australia's typically pleasant weather, no one's done more for outdoor than the former oOH! boss.
New Campaign Highlighting Renewable Gas As A Crucial Component Of Energy Transition
It's hard not to make a renewable gas ad sound like a tedious Year 9 science lesson. So well done to the agency here.
Love Media Welcomes Alana Dowling As New Client Director
Seasoned media pro Alana Dowling joins the Love Media team. Clearly replacing someone who didn't love it
B&T 30 Under 30 – Where Are They Now? Until Recently, Prison!
A prestigious 30 Under 30 gong can get you headhunted, promoted or, in this instance, a two-year stint in the slammer.
“We Will Never Tell A Journalist What To Write” – Nine’s Aimie Rigas On How Data Is Shaping News
Data becoming the journalist's tool for more engaged content. Still not beating dodgy MAFS contestants or a Kardashian.
Beware The Bad Guy. Billie Eilish Fans Brace Themselves For Scammers
Thought getting Tay Tay tickets was an unimaginable nightmare? Read on as Billie Eilish promoters say hold my beer.
Twilio Names Chris Koehler As CMO
Chris Koehler named as Twilio's CMO. Which may prove a prickly tongue twister after a lengthy open bar tab.
ARN Announces Ad Sales Partnership With The Athletic
Can we slow the rotation of the sun? Because that's the only way we'll fit all these new podcasts into one day.
Burger Wars Continue As Hungry Jack’s Brings Back The Big Jack & Mega Jack
Hungry Jack's' Big Mac ripoff set to return after recent legal win. Still no one racing to clone the Filet-O-Fish.
Diverse Voices, Sustainable Choices: Natalie Dean-Weymark On Why Sustainability Is A Non-Negotiable
Here, Compass Studios' Natalie Dean-Weymark talks diversity in media. It's the human equivalent of the Family Assorted.
New Partnership Between The Sweetshop And The Gardening.Club
Thought you'd be getting tips on aphids & fungus gnats from this Gardening. Club news? Prove yourself totally wrong here.
‘A Very Rare Breed Of Creative’ – Clemenger BBDO hires Chief Creative Officer
B&T's chatting with Clems boss Dani Bassil on Adrián Flores CCO appointment. We never got to Italian or Thai herbs.
Concrete Playground Debuts Innovative Urban Exploration Platform With Lexus As Launch Partner
Concrete Playground announced the launch of its redesigned website in partnership with Lexus. This partnership introduces a new era of urban discovery, enabling a deeper, more intuitive engagement with cities through a state-of-the-art digital platform. Revolutionised Digital Experience Concrete Playground’s website has undergone a significant transformation, designed to enhance the way users interact with their […]
Mindshare And The Brand Agency Take Top April’s New Business Rankings
Which agencies soared like an eagle for the month of April? As in stellar performance, not Eddie the hapless ski jumper.
Suntory BOSS Coffee Fuels Ambition With New Campaign From It’s Friday
Does your workplace have a strict, policed illegal drug policy? Then Suntory BOSS Coffee will have to do.
Resolution Digital Wins MyPlates Media Account
The best thing about personalised number plates is it makes spotting wankers on the road far easier. And drug kingpins.
Debunking The “Three Year Lie”: A New Approach To Retail Digital Strategy
This columnist says it's wrong to claim digital always has a three-year pay off. Has no opinion on the seven-year itch.
TV Ratings (06/05/2024): The Farmer Is Back And He Wants A Wife
It was a good night for lovers of farming and love.
The Growth Distillery Unveils The New Rules Of Influence
The New Rules Of Influence has arrived. And there appears to be no "difficult second album" syndrome here.
Whittaker’s Launch New Brand Platform, ‘Hello Chocolate Lovers’ Via Bastion Shine
New Zealand chocolate brand continues its insidious march into the Aussie market. Much like New Zealanders themselves.
Tyro Shows They Are ‘Into Business Big Time’ With New Brand Campaign Via Howatson+Company
Think finance isn't funny? Think again with this fun work. Yes, it still applies to funeral homes & Clive Palmer ads.
IAB Study Finds 66% Of Advertisers Have Five Or Less Years Experience With Affiliate & Partnership Marketing
Study finds advertisers & agencies not overly experienced with affiliate marketing. The opposite to networking drinks.
Optus Names NBN boss Stephen Rue As New CEO
In what would've been a delicious irony, alas this Optus news didn't get leaked in a major security beach.
Indy Enigma Delivers Signage For NSW’S First Purpose-built Surf Park
Is the fear of shark attack holding you back from a professional surfing career? This new surf park could be the ticket.
Houston Ramps Up Creative Capability, Appoints Two Senior Creatives
Houston - we don't have a problem! Well, not anymore with the appointment of these other-worldly recruits.