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Will the lines between channels finally be erased in 2017?

Will the lines between channels finally be erased in 2017?

Will the lines between channels finally be erased in 2017?

Online retail is growing – there I’ve stated the obvious – and footfall on the high street is on the decline (and done it again). But looking beyond the obvious, how is customer behaviour changing across the industry and the digital landscape, and how is store retailing developing to match and even exceed expectations? Emma Herrod investigates.

PRICE WAS the original driver of online retailing before it become the norm for us all to shop online. Then convenience took over as the industry innovated with free delivery and returns and a plethora of delivery methods to get orders into shoppers’ hands in a way/place/time that suited them.

All this price dropping, then matching and then convenience came at the expense of the high street. Footfall in October 2016 declined by 0.4% compared with the same month in 2015, following a 0.9% year-on-year decline in September. Academics believe that this country will eventually contain a number of retail centres of superb shopping loveliness to which people will travel while others become tier 2 shopping centres for quick, local visits and the rest are consigned to a rubber stamp mould of ubiquitous chains and charity and betting shops.

The high street is far from dead, though. People at either end of the age spectrum still prefer to go to bricks and mortar shops. In fact, some 71% of over-60s and 54% of under-30s prefer to buy things in store and take them home with them, according to an international study by Oracle. It says: “Many retail businesses are rightly focusing on the ways in which the ‘millennial’ generation (under-30s) will shape their business, but there is a lot of potential spending power still locked up in the ‘baby boomers’ (over 60s) who have more disposable income and are enjoying greater financial stability and quality of life than many younger demographics. For these shoppers, it is crucial to continue investing in the in-store experience. But the emphasis must be on ‘experience’.”

Partners at McKinsey & Company agree that older shoppers present a big opportunity for retailers. The older demographic will account for more than half of all growth in urban consumption in developed markets in the next 15 years. This is equivalent to $4 trillion (£3.17 trillion).

This growth is down to the sheer size of this segment as it ages, rather than the amount of wealth, explains McKinsey partner Markus Schmid. There is a wide income level in the older age group as pension changes take effect, so retailers need to know who their customers are. “There is no such thing as an average consumer,” adds fellow McKinsey partner Jaana Remes.

There are common traits around physical limitations, and the greatest disruptor for this age group is the transition from being in work to becoming pensioners and the resulting increase in the amount of spare time that they have.

Remes explains that the older shoppers have more time to think about how they will not only spend their money but also how to do it in an enjoyable way. This equates to experiences such as sports or other hobbies and the associated clothing and accessories, and she believes this is an “untapped opportunity”.

“Baby boomers are breaking the stereotypes of what older people are like,” adds Remes and they will “want to do things their way as they always have”.

The older demographic wants to make purchases in-store and arrange to have them delivered to their home, according to the Oracle research. Shopping via mobile is also a big trend for this age group. Click and collect and the ability to check in-store stock before visiting a physical store is a preference they share with millennials, who want to research online to buy in-store and research in-store to buy online.

Retailers are trying to scale omnichannel service while driving down costs; at the same time they are also having to be flexible and agile to offer the right services and products to disparate consumers and those that don’t fit the standard stereotypes. It means that retailers need to have the digital tools to measure and understand the preferences of not only different demographics or segments but also individual consumers.

2016 INTO 2017

In store, 2016 saw the continued rise of personalisation and clienteling in store as retailers armed their store associates with iPads, with Boots being the notable launch of the year. The current culmination of omnichannel puts store associates in possession of customer purchasing and browsing history as well as a view of stock location in their own store, others in the estate, warehouses and across the supply chain. But not all retailers have reached this stage – yet.

With shoppers of all ages wanting to be sure that a product is in a shop before they visit, either to look at it or make a purchase, shouldn’t a view of stock availability and location be a priority for retailers in 2017?

Standing in a queue at a big box retailer recently to return a purchase, I was amazed that the member of staff at the returns desk had to phone customer services to find out when an item would be back in stock in their own store. It was also clear it wasn’t the first time they’d had to make such a request that day. To their credit, they also made a Tannoy announcement and processed another customer’s return through the checkout while on hold to head office customer services.

If the information is available in one part of the business, customers don’t understand why it can’t be made available openly. Mobile is making it easier to show stock information in a way that suits different audiences and it’s also opening up other areas of digital retail. Self-service, for example, is being offered not only at checkout from in-store devices but also from mobile. This is available mainly in restaurants at the moment but it’s something that’s not beyond the scope of other types of retailing.

Shoppers also like to be able to research products online and/or in-store before purchasing through another channel, and digital gives them access to masses of information via their mobile phones. Paul Skeldon will expand further on trends in mobile commerce but, needless to say, retailers should be thinking mobile first, and it doesn’t always need to be complicated.

In September, for example, Mothercare introduced swing tags printed with QR codes on many of its products that customers normally research, including pushchairs and car seats. When they scan a code with their smartphone, the customer is taken to a page on which they can view further details of the product, including photographs, video and reviews. The codes are also printed in the retailer’s catalogue.


Shoppers like click and collect and it has been one of the saviours of the high street – and the customer delivery promise at peak times. It not only offers customers the convenience of being able to pick up orders from a preferred location at a time that suits them, but it also drives incremental purchases because they have to walk through the store to the collection area.

Shoppers at either end of the age spectrum told Oracle that they like click and collect. Older shoppers also like the flexibility of being able to buy something in store and have it delivered to their home. Is this a service that will grow in importance as the urban population ages?

According to a study by CBRE, however, shoppers would rather visit a shop and buy there and then than click and collect. In fact, many now see this service as inconvenient, taking time and effort. Only 16% of those surveyed said the ability to click and collect was very or extremely important in deciding where to shop and 31% went as far as to say that it was not important at all.

But consumers do want flexibility and the full integration of online and offline services such as the ability to purchase and return through any channel. Correlating with Oracle’s findings, one third of the CBRE study respondents said that they would like to be able to continue to shop in physical stores but have their purchases delivered to their home. Almost half said that free, same-day delivery for in-store purchases is extremely or very appealing.

Omnichannel is not going away; shoppers want what they want, where and when they choose, and this is only making it more complicated for retailers’ systems, operations, processes and staff. As the CBRE says: “Customers don’t want there to be a line drawn between online and offline; it’s the same retailer, so why would they be different?”

People who shop online like Amazon because “it just works”, so isn’t it time that the high street ‘just worked’, in terms of convenience of knowing that something is in stock before you visit the store, offering the ability to view additional information about a product on your phone or a store associate’s tablet while in the store and receive additional validation from other customers through ratings and reviews. In the same way that websites are designed to ease different types of purchasing journeys from the quick know-what-you-want grab to the longer browse, shouldn’t physical shops be enabling the same?

Nicola Millard, Futurologist at BT, agrees. “We know a lot of shopper behaviours are driven by convenience and ease,” she says. She adds that people are happy to pay more for an easy shopping experience. They also want to be in control, and this is one of the factors behind the growth of click and collect.

Rather than considering customers by age, though, retailers should also analyse them by the motivation behind their shopping journey and use this as a way to ease their shopping journey. According to Millard, a ‘Visionary Customer’, who is looking for a dress for a specific occasion, for example, will have a positive motivation for the purchase and is likely to use many different channels, embrace the shopping experience and have fun. A ‘Customer in Crisis’, however, is looking for a solution to a problem and they are more likely to use physical channels and want to talk to another person. Here the phone is the most accessible channel. The ‘Utilitarian Customer’ is neutrally motivated and is looking for a quick and easy channel through which to make their purchase. “I don’t need a wow experience to buy carrots,” says Millard.

Retailers need to understand every customer and their motivation for each shopping journey and this is where data will help, not only in giving the retailer a better understanding of the customer but also in being able to make the shopping experience easier and more convenient. We’re already seeing how smartphone carrying shoppers can opt-in to be sent personalised communications in store. Moving on from this, retailers can become proactive, using omnichannel data to nudge a shopper towards the things they might like to buy.

The next step is predicting what that shopper will buy and having the stock in the right place before it’s needed. Retailers have always had big data but now is the time for them to use intelligent analytics tools aligned with intelligent human beings to work out how they can do things better and make shopping easier for customers, explains Millard.

“I think this will really fly if we make things easier for customers, and they will be happier to share data in order for the retailer to use it in a meaningful way,” she says.

Digital is starting to bring ease and convenience back to the high street, with omnichannel systems to ease operations so that store staff can interact on a par with smartphone-holding shoppers. IT is opening up a full, transparent view of the retail organisation and linking every touchpoint to the customer, to stock and in real-time.

Having the back end in place for omnichannel services creates flexibility for the future, because used correctly technology can really add to the shopping experience in a way that online is still trying to achieve (at the moment that’s a personal service), being flexible and giving shoppers the experience they want at that time.

So whatever age the customer, once they’ve walked into a shop, the experience needs to be frustration-free with items on the shelves, access to further information and a quick and easy way to buy and get the purchase home. Where those choices can be helped with digital, it should be done so in a way which fits easily with how the store associates work, with an interface that’s right for them but also be presented in a way that’s accessible to shoppers – either in consultation with the store associate or on their own device. 2017 could be the year when shopping on the high street becomes as simple and painless as shopping on Amazon, but with added pizzazz.

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