Is Brick and Mortar commerce dead? Absolutely not. Is eCommerce the most important sales channel in the future? Irrelevant. Neither online or offline sales really matter in the big picture. What matters is how customers shop and how much has digital changed the way retailers do business.
A recent Deloitte study outlines just how much digital is impacting retail.
Over 36% of 2013 overall sales in US have been influenced by digital and the trend continues to grow. By 2017 over 80% of all retail sales will be influenced by digital.
In terms of cash that places the digital influence in the real of trillions of dollars. In US alone, where the study was performed, that meant $1.1 trillion in sales were influenced by digital. If we were to extend this figure to the global retail sales in 2017 as estimated by eMarketer that amounts to a whoopping … wait for it …
$20 trillion in sales. That’s the amount in sales that may be influenced by digital in 2017.
However debatable this figure may be, the digital influence is something that is truly amazing and outright revolutionary.
But that’s not all. Don’t think digital influence means ecommerce. Definitely not. Two facts stand out in the Deloitte study:
1. The increase in digital influence has been triggered by smartphones
Smartphones are the main cause in the increased digital influence. Mobile phones now account for $593 billion in sales (19% of the 36% of all sales influenced by digital).
What’s even more interesting is that users are not more mobile-savvy. Only 25% of the increase in smartphone usage is caused by an increase in comfort and sophistication in smartphone usage. 75% of the increase in smartphone usage is due to an increased adoption.
Long story short: there are more smartphones, not smarter users.
2. Brick and mortar shopping is definitely not dying. Unless it has to.
94% of all retail sales still happen in the confines of a physical store. Wait, what?
It seems that what’s causing retailers problems is failure to engage customers on all channels. Customers are pre-buying (shopping) on ecommerce sites but they pick-up, try on and eventually buy a lot of things in the physical store.
The trick here is getting the big picture right. Use different customer journey points and engage digitally in a relevant way. Customers may shop online and get an assortment ready but they want to get to that assortment in the physical store and than buy. Just placing discounts in the mobile app doesn’t work. Each part in the shopping experience has to be customized to that particular medium and need.
In conclusion: digital is not ecommerce and digital influence is definitely not limited to the online store. Those who fail to connect the dots and engage their customers on all channels will not be a part of tomorrow’s retail.