Today, every consumer is a digital consumer. They’re connected, informed, and have high expectations. This is no truer than in the retail industry, which has gone through a total transformation as the mobile era takes hold, with merchants trying to maintain the balance between their bricks-and-mortar stores and their mobile offerings. More than 145.8 million smartphones were shipped in Western Europe last year alone, and Europeans are increasingly using their devices to browse m-commerce sites and purchase goods through the channel. At the same time, we’re witnessing the revival of the high street, with merchants introducing services such as ‘click and collect’ to complement rather than compete with digital channels.
In the first of this two-part series, we look at how the retail landscape is shifting and what impact this has had on merchants.
The connected shopping revolution
Today, there is an average of 1.7 mobile devices for every person on the planet, yet this figure is set to more than double to 4.3 by 2020. Keen to take advantage of this growing market, retailers have been developing their own m-commerce solutions over the past few years, and today, consumers are typically using their devices to browse different offers, compare prices and confirm availability before clicking through to the checkout page. This is known as the multi-channel approach – whereby a retailer might have a physical store on the high street, a website and mobile platform; but the consumer cannot start the purchasing process on one channel and complete it on another.
The impact of the digital consumer on the retailer
The digital consumer presents the merchant with increasing opportunities to engage and form a relationship with them, as the customer could be physically in-store, or searching through products online or through their smartphone. At the same time, the digital consumer leaves a footprint wherever they browse, enabling the retailer to gain a holistic view of their buying habits. Using data analytics, they can monitor the volumes of valuable behavioural data being generated to understand consumer segments more precisely.
On the flip side, the digital consumer presents the retailer with more obstacles to overcome. Keeping them in the ecosystem through the entire journey from pre-sale to post-sale for example, can be a real challenge. A typical customer will find a product they like, visit the store to check it out in-person, but then crucially revert back to their smartphone to find the best price before making a purchase. This could cause them to leave the purchasing process altogether, or buy the product elsewhere from a competitor offering a lower price.
In order to capture the consumer from start to finish, retailers need to evolve their proposition and create a seamless shopping experience, regardless of channel. This is known as the omni-channel approach, and enables consumers to start the purchasing process on one channel and completing it on another. How to do this will be explored much further in my second post, in which I’ll also discuss how the consumer’s connected journey is being transformed.
- Business Insights