By Optism Team, Apr 12, 2013
Traditional retail in the U.S. is under attack by eCommerce and mCommerce. By allowing for a broader assortment of inventory, easier access to comparison product information and better purchasing options, these new shopping methods are continuing to grow faster than traditional retail. Although it only accounts for a fraction of annual US retail sales, the numbers are steadily climbing.
In a great presentation, The Future of Retail, on BusinessInsider, Kim Bhasin and Ashley Lutz analyze the growth of these new shopping methods, how traditional retail is fighting back with their own eCommerce and mcommerce options and how the story is really about giving consumers what they really want which is low prices, a customized and personalized shopping experience and excellent customer service.
eCommerce will grow by double the rate over onsite retail (10%+ vs. 5%) over the next few years and continues to be dominated by a few top retailers, led by Amazon, Apple and then mostly traditional stores like Wal-Mart, Target and Best Buy. The online retailers are continuing to innovate introducing same day purchasing and local vending machines.
Mobile devices are further altering the retail landscape. It is projected that by 2017, mobile retail will comprise 9% of the ecommerce landscape, a whopping $31 billion and growing. Comparison shopping sites like Groupon have successfully changed the way we shop online. As mobile continues the rise, so too does the use of the mobile wallet. In a recent blog post, we looked at the Google Wallet experience, and the results were much better than expected but mobile wallet front-runners face new solutions from traditional retailers.
Consumers are fed up with traditional retail with higher prices, lack of inventory, disinterested sales people and are using showrooming as a tool to meet their need for information and better service. Retailers have woken up to this displeasure. Over the past year, retailers have been able to push back on the gains made by eCommerce and mCommerce by making the shopping experience more experiential and introducing own mobile apps. For example, JCPenney has even gone as far as saying they’d like to see the elimination of the cashier operated cash register in the near future, and Urban Outfitters is following suit.
Most experts agree, the “showrooming” phenomenon is real. Interestingly enough, although only 17% of consumers were aware of what showrooming is, 36% agreed they’d done it upon learning the definition. In the case of clothing, showrooming seems very logical. People want to try things on and see how they look and feel before making a decision to buy. The convenience now is that consumers no longer need to return to the store in order to complete the process. The brick and mortar store is an experiential center, it is where we go to interact with the brand, to feel, touch, and see it.
It's Really All About the Consumer
Consumers are looking for tools and options in their shopping experience that allow them to do the following things; save money, save time and provide ideas. For many customers what is most important is face to face customer service. Apple stores are basically a giant customer service desk and their success is causing retailers to change their focus. Traditional stores have customer service in the corner near the entrance but this is the wrong strategy. The customer service desk should be very visible in the middle of the store and omnipresent through mobile apps. The online and offline shopping worlds should not be siloed, but instead be tightly connected.
The shopping experience is changing for the better; more personalized, more efficient and hopefully more enjoyable. More retailers should take the opportunity, especially in the area of mobile, to keep their brand front and center with their customers.