Why we need to talk about the retail evolution, not the retail apocalypse

Online orders accounted for 8.4 percent of total retail sales in the first quarter of 2017, compared to 7.8 percent in the same quarter in 2016, which represents a 14.9 percent increase in e-commerce sales in 2017*.  The "retail apocalypse" seems to be the favorite expression to illustrate these figures, added to the fact that 3,500 stores have closed in 2016, including big brands like Macy's, Walmart and others. But what if we put that number in perspective with the 2900 store openings the same year? Although online sales continue to increase year over year, 90 percent of retail purchases are still made in-store, and the majority of consumers enjoy the in-store experience.

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When the pure players invest offline


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"Amazon is eating retail" is an example that has often been brought up, to predict e-commerce trends and the fast growth of pure players. However, Amazon's recent purchase says otherwise. The Pure Player recently acquired Whole Foods for $13.7 billion, a purchase highlighting what we have long known: Online and offline cannot be handled as two different entities anymore.

Eighty percent of customers in the U.S will start their shopping journey online, before making a purchase in-store. And when they do, they spend six times the amount they would have spent online. The challenge is not to be primarily online or offline anymore, it is to be able to merge both worlds, and offer an omnichannel experience. The ability for customers to start their shopping journey either online or offline, to switch channels along the way, and to benefit from a personalized experience.

Retail is changing, and tomorrow's successful brands and retailers are the ones taking the O2O path (online to offline). "If retailers don't have fully integrated omnichannel today they're already behind" said Patrick McIntyre, director of global retail at Mars, in a recent interview for Insider Trends.

The integrated omnichannel experience

In North America, omnichannel is often mistakenly seen as the implementation of several marketing channels to address customers. Omnichannel truly stands as an integrated shopping experience, where the online and in-store experiences will merge and work together to deliver the best customer experience. There are three steps to achieve a complete omnichannel experience:

  • Link the online to the offline, through the implementation of drive-to-store solutions, like a store locator, a click-and-pickup option, and many others.
  • Enrich the knowledge of a new connected and mobile shopper, with the analysis of online to in-store analytics. Today, some new devices implemented in-store can track online to offline behaviors, allowing brands and retailers to link an in-store action to an online investment.
  • Allow brands and retailers to capitalize on the new knowledge. The information collected online and in-store will give a full understanding of the customer, allowing companies to capitalize on that knowledge, and deliver high value-added experiences.

Providing a unique in-store experience is now a fundamental part of the sales process. If brands and retailers are still hesitant in taking the omnichannel path, a recent Salesforce study should convince them: "More than three out of four shoppers (79 percent) like it when they receive complementary product offers or promotions based on their purchasing histories from a retailer, indicating a desire for more personalized shopping experiences."

In the end, the retail evolution is all about the customer. Being tech-savvy, shoppers want their shopping experience to reflect their daily life: a mix of online and offline. It is up to the retailers and brands to build a great customer experience, to satisfy their connected shoppers, and increase their foot traffic and ROI.


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*Source Census Bureau
*Source Connected Shoppers Report - Insights into the Expectations of Today's Empowered Shoppers, Salesforce