Retailers Are Falling Behind As Consumer’s Digital Expectations Surge: Report

Retailers Are Falling Behind As Consumer’s Digital Expectations Surge: Report
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Consumer digital behavior and expectation is evolving faster than retailers can deliver, creating a new digital divide between merchants and their clients says the latest Deloitte “Global Powers of retailing study (2016)

The study also found that despite the natural cultural and economic differences across the markets, the digital influences on in-store behavior are relatively common and, warn the authors, “Retailers may be underestimating the real impact and opportunity that this may have for their business.”

Deloitte’s researchers say the data reinforces the reality of the digital divide; that retailers are underestimating – or at least under-delivering on – the consumer’s evolving desire and ability to incorporate digital into their in-store shopping journeys.

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The study reveals three key insights about how retailers need to consider the in store experience”

  • There is no single path toward digital adoption or optimisation. Global retailers can’t necessarily colonise new markets with existing digital ideas. “The developing world will not necessarily follow in the footsteps of the most digitally developed countries today. In some cases, emerging markets digitally developed appear to skip adoption stages experienced previously by developed markets, and therefore may come up the adoption curve more quickly.”
  • One digital “size” does not fit all customers within a given market. “Even within the context of a market, digital behavior varies based on personal context – who the consumer is, what stage in the process he or she is in and what he or she is looking to buy. ..(and).. consumers clearly use digital tools very differently based on the product type for which they are shopping.”
  • Across the world, consumers are demanding digital tools and features to execute their own shopping journeys. “Irrespective of culture, digital has a significant impact on in-store retail, and in fact is dramatically more valuable than viewing digital through the lens of online revenue. Ultimately, these tools and channels can help extend the retailer’s reach beyond the traditional shopping trip, and generate incremental revenue and profit in the store and across all channels”

The study looks at the performance of the top 250 physical retailers, but is also examines the top 50 e-retailers. And in fact the authors suggest, “E-commerce accounts for the majority, if not all, of the sales growth for many retailers today – especially mature, traditional retailers who, at best, are eking out low-single-digit gains in same store sales.”

Omnichannel strategies remain critical to retail success according to the report which notes that “The majority of the e-50 (39 companies) are omnichannel retailers with bricks-and-mortar stores as well as online and other non-store operations.”

Eleven companies are non-store or web only retailers, including the world’s largest e-retailer Amazon which achieved  2014 net product sales  of more than US$70 billion. “Apple’s estimated e-commerce sales of US$20.6 billion ranked the company in second place.”

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