Though e-commerce and internet marketing get a lot of attention in the media, it’s important to realize that most commerce still happens through traditional methods. Even in the digital age, people like shopping for Christmas gifts in stores and buying cars by visiting the dealership. The value of physical stores was illustrated by a recent study. Mastercard released a report which found that the appeal of physical stores remains strong in spite of the increased availability of the internet.
As more consumers gain access to the internet via smartphones and mobile device, more and more consumers are becoming “omnishoppers”. According to MasterCard’s The Retail CMO’s Guide to the Omnishopper, omnishoppers are the eight out of 10 consumers globally who use a computer, smartphone, tablet or in-store technology for shopping. The study found that even among omnishoppers, physical stores played an important role in acting on the information they find through online channels.
Internet marketing plays a large role in how people learn about the products they want to buy and where they will go to buy them. But in the end, most commerce happens offline. According to the study, e-commerce only accounts for about 8 percent of the total retail sales. So nine times out of 10, commerce happens through traditional means. The report’s authors say this dynamic will continue and that business owners and marketers should learn to make the most of it.
“Don’t worry about this: understand it,” the report states. “In truth, the penetration of pure play eCommerce at 7.5 percent or 8 percent globally coupled with the fact that digital devices play a part in 80 percent of all paths to purchase is a sign of the new shopping ecosystem, not a danger signal. The omnishopper goes to physical locations for the entertainment value of shopping, superior inventory levels and social interaction.”
For the majority of omnishoppers, physical stores offer things they can’t get through ecommerce channels. The most commonly expressed sentiment by the survey respondents (59%) is that physical stores allow people to get things more quickly than they can online. Similarly, the majority said they liked getting recommendations from merchants (54%) and the overall social experience (53%). Though cited by fewer than half, other commonly cited advantages for in-store commerce included: good customer service after the sale (45%); a personalized experience (43%); and good customer service overall (42%).
For brick-and-mortar retailers who want to keep loyal customers, the report offered some insights into what made consumers more likely to stick with the retailer they know. The respondents noted factors such as value (44%), track record/experience (36%) and convenience (34%) as being more important than loyalty rewards (26%) in getting omnishoppers back to the same merchant. In fact, old merchants have a significant advantage, as only 30 percent of the people surveyed said they liked shopping at new places.
Another of the key findings is that consumers like the increased access to information. Many feel that it empowers them as shoppers and enables them to find better values. According to the report, four out of five (80%) respondents said they are better shoppers than they were a few years ago. Similarly, 70 percent said they get more value out of their retail purchases than they did five years ago. Consumers are more likely to research products to make sure they get what they want at the best value. This has had a negative effect on in-store foot traffic. Years ago, the biggest concern was showrooming, but now, consumers are doing their research online before going to the store to buy.
These results are made more compelling by the amount of data used to create the report. The study is massive and based on MasterCard’s aggregated and anonymous transactional database along with a global survey of over 10,000 consumers who shop via multiple channels from 11 countries. The MasterCard data was used to determine the number of retailers the average customer purchased from over the past five years and the survey focused on the behaviors and attitudes of consumers who purchased items both online and offline within a 30-day period.
Applications for Business Owners with Physical Stores
This report has a lot of good information for business owners and marketers. One of the main takeaways is that there are things business owners can do to make their physical store thrive in the digital age. By adapting a business’s marketing strategy to include internet and mobile marketing, retailers can attract more customers more effectively than ever before. With options such as ads on Google, Search Engine Optimization, social media marketing, advertising on mobile devices and more, there is an almost endless number of ways to build a more modern marketing strategy.
The second big takeaway for in-store retailers is to improve on the areas that keep customers coming back to stores. As the report indicated, good customer service and personalized experiences are what shoppers like the most about coming to a store. Ensuring that employees understand the importance of their smiling faces, plus creating an in-store environment that is distinct and memorable, can go a long way toward creating repeat customers.
Finally, retailers need to remember what matters most to consumers. There will always be gimmicks that marketers try to use to get people to try a product or visit a store. This research shows that the most effective thing to offer is a good value and a good experience. Doubling down on value, convenience and experience will pay off more than relying on gimmicky marketing like contests or loyalty programs (though adding those into the mix can help).
For more recent data on consumer behavior, read this article on which buzzwords work the best on product packaging.