Photo: Walmart
Survey says ‘retail is retail’ no matter where the sale is made
Online, mobile, in-store — it’s all the same as far as consumers are concerned, according to retailers survey by the National Retail Federation (NRF) and Forrester.
“Retail is retail regardless of where a sale is made or how the product is delivered,” said Mark Mathews, vice president for research development and industry analysis for NRF, in a statement. “Products ordered online are increasingly picked up in-store or shipped from a nearby store, and digital technology being used at bricks-and-mortar locations lets retailers help customers find what they want or make the sale even if the product is out of stock. Traditional retailers have seen the opportunities of online selling for years now, and those selling online increasingly see that stores are part of the key to success.”
Survey respondents included pure-play e-tail (32 percent) and multichannel retailers (57 percent). While store closures have been making headlines — yesterday’s Toys “R” Us announcement that it plans to close all 735 of its U.S. properties serving as a case in point — NRF and Forrester found that 43 percent of brick and mortar retailers plan to add locations this year, while only 16 percent expect to decrease their numbers.
Omnichannel efforts have made stores more important with retailers using them as pickup locations for online orders and also as shipping hubs for home delivery. Twenty-one percent said in-store pickup was a priority for their businesses, while 15 percent sited ship-from-store.
“The physical retail store is not doomed as many think it is,” said Sucharita Kodali, vice president and principal analyst at Forrester. “Smart retailers understand that the two go hand-in-hand, but customer-obsessed retailers will continue investing in areas like omnichannel to provide customers with the seamless on and offline experiences they expect and now require.”
Retailers are placing an increased emphasis on technology to help them better connect with consumers. The study found personalized shopping experiences was a priority for 15 percent of store-based merchants, while 12 percent were using tech to better enable associates to serve customers in stores. In a hopeful sign, 61 percent plan to spend more training employees to provide better shopping experiences for customers.
Discussion Questions
DISCUSSION QUESTIONS: Does the reality at retail demonstrate that companies understand that channels do not matter to consumers and that seamless shopping experiences are a competitive necessity? Are there any elements of the NRF and Forrester research that give you hope or concern for the retail industry in the near- and long-term?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Sterling Hawkins
Co-founder, CART
I’d love to believe that 61 percent will invest more in training their employees but how to pick an online order or scan-and-return doesn’t count. The only training that counts is the communication skills between shoppers and associates, anything else is fake news when it comes to altering the customer experience of meeting another human being.
Bob. I totally agree. H2H (human to human) beats B2C and B2B every time. Shopping is a social activity and human connection is sorely missing.
“In fact, there will be a continuing Convergence of Online, Mobile and Bricks-and-mortar retailing (COMB retailing).” Apr 10, 2012
Glad to see the subject being addressed finally here.
I look forward eagerly to a discussion of bricks retail being built on pallets, while online is built on items (logistics.) It’s been a year or two since I first brought up this totally ignored, but controlling reality for bricks vs. clicks.
The fact that only 29.1 percent of U.S. retailers have in-store pickup working today tells me that despite consumer desires, retailers are not there yet. It isn’t an understanding issue, it is more an issue of taking the risk to invest in the technology and processes to make click and collect a reality. It is not easy. But that’s also what Blockbuster said about moving to digital. We all know the net results there.
What gives me hope is that there seems to be a renewed awareness of this in the retail market this year. This came from 2017 holiday season — where more shoppers were aware of pickup options and were looking for them. We are getting there. Encouraging, but we need to get there faster …
Consumers have considered retail to be retail for a number of years — it’s taking a while for many retailers to grasp and implement that concept. This is a lot for many retailers to understand, and implementation is not easy or cheap. But once a retailer makes a decision to sell online, it needs to have systems in place to meet consumer expectations.
Max, well said. It’s no longer “mortar & brick,” or ecommerce, or omnichannel … to a consumer it’s just commerce. They seek a seamless, frictionless, shopping, buying, paying, experience. Consumers don’t see these as separate processes, just part of their distinct path to purchase.
To the customer, whatever channel they choose to communicate with a retailer — or however they buy from the retailer — it’s all part of the brand. That is why Nordstrom, known for their amazing service in-store, has been very cautious about how they go about online sales. The experience has to meet the customer’s expectation of the brand and its reputation. There are brands that operate their in-store and online experiences separately, to the point where prices online are different than in-store. Regardless of their reasons for operating these separately, the consumer doesn’t understand why the price difference, which can potentially destroy their trust in the brand. So it’s simple. Regardless of where and how the consumer buys, as the title reads, “retail is retail.”
I’m not sure why any of this is surprising. Did anyone reading this website actually believe the “retail apocalypse” was a thing? Sales are up, more stores opened than closed — shame on us if we followed click-bait. It’s baloney. Toys “R” Us failed because it became overburdened with debt. Not because store-based retail is dying. Bad decisions by its owners drove it down, frankly.
But I was also thinking about the notion of “channel-less retail.” Of COURSE consumers don’t think about channels. It’s the job of retailers to make every experience feel seamless, regardless of where the shopper shows up. But that doesn’t mean that retail OPERATIONS shouldn’t think about channels. Let’s be realistic. Purchase orders have to be sent somewhere. Orders have to be fulfilled somewhere. And those things have to be done as efficiently and with as much advance intelligence as possible. For want of a better word, that’s what channels are. Places where product, technology and people have to be deployed to support efficient but customer-friendly operations.
Let’s stay off the pendulum, okay? And I know Sucharita well enough to know that she ALSO knows that. So let’s not create more click-bait in the meanwhile.
Consumers understand that retail is retail no matter where the purchase is made. I am not convinced that most retailers understand this. If they did, we would not have the issues we have today with brick-and-mortar retail.
Customers want to connect with a brand and build up the trust to make them a habit. I think we will see this much clearer with Amazon entering the physical retail world. Amazon has the trust and relationship with customers who will then trust their stores.
Physical retailers need to embrace the omnichannel consumer and provide a great experience no matter where they shop the brand — even controlling their brand on third-party marketplaces.
Three years ago we came to the same conclusion that splitting online and off-line or even using the terms multi-channel or omnichannel will become outdated. Each denotes elements of separation in the route to market which are largely internal. Our vision was for retail to become single-channel. We still believe this will happen and the industry is on that journey. We should remember that customers just want great customer service. Seeing internal divisions will not add to the experience for them. As others become more single-channel they will become less accepting of the variances in services between the current channels.
Brick-and-mortar is and will remain an essential part of all retail sales. What has changed is not the need for stores but how the customer today wishes to shop them. Consumers use the internet whether to browse first or make their purchase but many times the store remains part of the sale, as the article points out, when the customer buys online and picks up in-store. Retail is retail no matter where the transaction takes place. Most of the stores closing today are the tired ones of yesteryear that didn’t keep up with consumer demands. But smart retailers can make today more successful than ever by providing the best in-store experience as well as the most convenient and pleasurable online shopping experience possible. The critical need in-store is making sure you have enough employees that are all well-trained along with technology that provides conveniences for the customer and not frustration. Do everything right and retailers today can see sales and profits boom!
Retail is retail until consumers are offered what looks like a better option. Downtowns are then abandoned in favor of the suburban box store, physical retail hustles to activate commerce and the appeal of the store must be improved. Retail is retail with the continuous growth and adjustment that defines a competition-based economy. Consumers will always vote with their wallet, the only power they have.
NO! For years I’ve attacked “omnichannel” “thinking” as the reactionary positioning of an industry that refuses to acknowledge reality. Of course consumers think retail is retail. Why? Because it obviously is. There’s nothing “seamless” about radically different channel strategies. In fact the opposite is true. Happy to see pundits finally seeing the light, but it’s akin to opening your eyes and seeing what is in front of you. Now what we need is some FRESH thinking about what seamlessness looks like, this time from the consumers’ — not the industry’s — perspective.
Absolutely! The fact that consumers see retail as retail regardless of channel while retailers don’t is sad. The fact that so few retailers are creatively acting on this fact explains why they are not doing well.
This survey seems to capture reality — a reality that’s existed for longer than has been noticed by the retail theorists.
In fact, I was pleased at eTailWest (a show founded originally for pure-play online) that the vast majority of discussion assumed the seller used both physical and online stores.
That said, I remain concerned about how much retailers are investing in tech efforts to the detriment of paying employees well to ensure a good experience for customers, investing in smart merchandising in the store and overall focus on the store environment. Store environment will determine long-term viability as much as tech investments.
Companies are understanding this better and those that understand it better are more successful. As many of my colleagues noted, the consumer has understood this for years. How many times have we had discussions in this venue about retailers’ offerings being different in-store and online? Or the inability to return? Or compensation for store associates when the sale ends up online? Or if same-store sales are the right measure of success?
Once a retailer understands they are in the business of selling goods and not operating stores, they change the entire way they think about their business. Those retailers who care where they sell the goods will lose badly in the long run.
To meet elevated consumer expectations, successful retailers are transforming their retail and customer engagement models. Retailers realize they need a new approach to enable a unified experience, an approach that supports the convergence of the digital and physical worlds, as they engage their customers in a consistent and ubiquitous experience. The next wave of customer service technology, in the guise of Distributed Order Management (DOM), is upon us. Order Management will truly be the POS of the future.
I also think the statistics from the Forrester study (personalized shopping experiences was a priority for 15 percent of store-based merchants, while 12 percent were using tech to better enable associates to serve customers in stores) seem very low. Personalizing the shopping experience, equipping sales associates as well as their customers with the right tools and positioning DOM should be the top priorities for retailers.
True omnichannel retailers have figured out that consumers are not buying channels – they are buying products, knowledge and support from their chosen retailer. With current technology, consumers are looking for convenience and service when they buy and would like a multitude of options to make the purchase and pick it up or have it delivered. To stay competitive. retailers need to offer all of the above. The retailers that can do all will survive and grow; those that don’t, like Toys “R” Us, will fail.
“It’s the store, stupid!” Most are now digitally enabled, true, but their status as value-added intermediaries between makers and consumers is as essential as ever. This is true whether shoppers access them on the asphalt highway or the digital highway.
Many of us in this forum already think similarly about this. It’s remarkable that NRF and Forrester have put the question to shoppers in order to confirm evident reality. Retail pros don’t need to be convinced, but it seems to me that the Wall Street financial community has been generally slower to understand.
My only concern here is that we needed a survey to tell us this :). I think many of us, as consumers, understand that channels do not matter. The reality is that silos and existing structures are so ingrained in many retailers that it’s hard to adjust to a world without borders. Some are doing an incredible job of shifting and adjusting to innovation and change. Others are resisting the “new normal” and sooner or later that will come back to bite them.
My three thoughts:
1) I think it’s a simplification to say channels “do not matter”; I think consumers are saying the channel isn’t all important, which isn’t quite the same thing. People still have preferences.
2) I instinctively discount optimism since I think retailers are naturally optimistic. (Even in 1932 I’m sure there was no shortage of talk about growth.) Much of the time they’re right, of course, but it’s still an upward bias.
3) I see the growth of mobile sales as problematic, at least to the extent it supplants desktop. It’s probably inevitable, but I just don’t think a tiny screen is ever going to convey all the info needed for an informed sale; and without that we’ll see the complaints and problems associated with online increase.
It looks like the customer is ahead of the retailer when it comes to the idea of retail. Customers just want to buy. The stats from the research suggest that retail is lagging behind in terms of enabling that to happen in a seamless fashion. As to the physical store, I’ve been saying for a long-time now that it’s not going away, but retailers need to use it better. I just wonder who this research is news to.
To no one’s surprise on this website, consumers once again prove in another survey they don’t care (or even know) about channels — I remember RetailNext conducting a similar survey at least 3 years ago. Consumers buy — and they do it in many different ways — stores, online, mobile, phone, etc. There will always be a new channel coming along that causes retailers to scramble and upend their operations. But, this is typically due to the realization that legacy systems can’t cope with the new channels. This is why younger retail brands seem to have an easier time creating the seamless channels consumers want. Retailers that execute that seamless customer journey reap the rewards with larger transaction sizes and happy customers.
I’m with Paula on this one — there never was a retail apocalypse. Let’s all stop talking about it and start talking about how retailers are going to implement the new technology and upgrade their underlying tech infrastructure to create those seamless, multi-channel experiences customers aren’t demanding — they EXPECT them. Customers would need to understand channels to demand seamless multi-channel experiences!
Retail is retail when it resolves the Forest Gump condition that, to paraphrase: retail is like a box of chocolates. You never know what you’re gonna get.
When we resolve the dial tone issue of navigation and expectations, then we can get back to delivering the desired sugar fix, but, switching from Gump to Einstein: “Problems cannot be solved with the same mindset that created them.”
So what’s the problem? How do we design retail?
What’s the mindset? That stores matter.
Who is the audience? Retailers in all the sub verticals.
What’s the challenge? Incumbents are less flexible from a technology and business model POV.
How should that mindset change? That stores only matter if they matter?
Why should we care? Because we are the NRF and we care about these things.
How do you care? We help our members from a lobbying point of view.
What might you do? New ways to change leases, tax support to reinvest in new technologies.
Is there an argument from a public policy POV to help with this transition?
Disclaimer – just having fun, as usual! Have a great weekend.
With customers quickly expecting retailers to provide a seamless experience across channels — we’re in the middle of an inflection point where the retail winners and losers are choosing their fate. Either a retailer invests in the proper training and technology to support the omnichannel experience, or they will suffer.