514.258.9359
info@a2r.ca
Advantage2RetailAdvantage2RetailAdvantage2RetailAdvantage2Retail
  • Services
    • Retail Services
      • Consulting
      • Business Process Review & Optimization
      • Systems Implementation & Integration
      • Custom Software Development
      • Project Management
      • Training, Technical & User Support
      • IT Staffing
      • Outsourcing
    • JDA Expertise
    • E-Commerce Expertise
  • Solutions
    • Veras Retail Solutions
    • HighJump Retail Advantage
    • Jesta I.S. Vision Suite
    • Pivot88 Solutions
    • Beehivr Field Marketing Applications
    • Point of Sale Systems
      • Veras CheckOut
        • Veras Activate
        • Veras Control
        • Veras Extend
        • Veras Locate
        • Veras Reach
        • Veras Stock
      • Jesta I.S. Vision Store & Mobile
      • WinDSS In-Store System
    • Merchandise Management Systems
      • Jesta I.S. Vision Merchandising
      • JDA Merchandise Management System-I
    • Warehouse Management Systems
      • JDA Warehouse Management
      • HighJump Warehouse Management System
      • Jesta I.S. Vision DC
    • Analytical Tools
    • HR & Workforce Management
  • Industries
    • Retail
    • Distribution
  • Media
    • Blog
    • A2R News
    • Resources
    • Client Feedback
  • Company
    • About Us
    • Executives
    • Technology Partners
    • Careers
    • Contact
  • Support
  • English

The Retail Renaissance

    Home Mobile The Retail Renaissance
    NextPrevious

    The Retail Renaissance

    By a2r_admin | Mobile, Multi / Omnichannel | 0 comment | 24 March, 2016 | 0

    The Retail Renaissance

    North American Retail is in a state of flux. Consumer expectations and the ways in which they shop have changed, forcing retailers to adapt or go the way of the dinosaurs. Technology has advanced faster in the last 5 years than it has in the last 20, further fueling the silent arms race between consumers and retailers, and redefining what retail is.
    Not too long ago consumers saw advertisements on TV or in print, or heard them on the radio, prompting them to visit the brick-and-mortar locations to obtain the sought-after goods, or if they had time to wait and the retailer had the ability, they would order through catalogs by phone or snail-mail. E-Commerce, led by giants such as Amazon and eBay began nearly 20 years ago and began to change the concept of shopping. Though its success has been slow, the E-Commerce Sales channel has grown to reflect 7.5% of Retail Sales, and shows no sign of slowing.

    ecom_1

    Data via US Census Bureau, February 2016

    Nine years ago, Apple unveiled the first generation iPhone, and without realizing it (or perhaps so), had sparked the Smartphone Revolution that would soon change the world of retail forever.

    “This is a day I’ve been looking forward to for two and a half years. Every once in a while a revolutionary product comes along that changes everything.”

    Steve Jobs, Apple Keynote: iPhone unveiling, January 2007

    In the 9 years since its first unveiling, there have been five more generations of the iPhone as well as a variety of competitor’s devices, all fueling the growth and expansion of the technology and its reach. Today, according to Pew Research, 72% of American Adults and 68% of Canadian Adults own a smartphone.

    Smartphones are more common in Europe, U.S., less so in developing countries

     

    This is especially interesting considering the fact that the smartphone has had a much faster rate of adoption in less than a decade, than the personal computer has in the last 30 years, and in fact, PC ownership is declining with the rise of smartphones, tablets and other mobile devices.

     

    Smartphones, Tablets Grew in Recent Years; Other Devices Declined or Stayed Flat

    MP3, Computer Ownership Has Dropped Among Younger Adults Since 2010

     

    It is this technological change by consumers that is fueling the Retail Renaissance. In 2010-2011, M-Commerce began to grow as a mobile, smaller off-shoot of E-Commerce. Fueled by the ubiquity of smartphones and retailers who began to see the benefits of what was at the time a buzzword, but which is now the reality, of Omni-channel Retailing. In the 5 years since its true start, M-Commerce has begun to gobble up a significant percentage of E-Commerce sales, although its overall impact on total retail sales is quite small (1.6% in 2015). The growth, power and reach of Mobile devices and retail began to be felt and universally acknowledged during Black Friday 2014. On that day, Mobile traffic outpaced desktop/laptop traffic for the first time (52.1% of online traffic – IBM Benchmark Report – Black Friday 2014), as consumers scoured the web in search of the best bang for their Black Friday bucks. The majority of Black Friday E-Commerce transactions were completed by desktops, however M-Commerce still accounted for 27.9% of online sales. A quote from the IBM 2014 Black Friday Report was especially poignant, and expressed the true state of the new consumer:

     

    “This trend may indicate that shoppers are becoming more comfortable and digitally savvy in how they use online coupons and rebates to secure the best bargains.”

    IBM Benchmark Report – Black Friday, 2014

    This was shown to be true even more the following year. In 2015, Mobile again set new milestones on Black Friday, capturing 57.2% of all online traffic and a surprising 36.2% of online sales to a tune of about $900 Million (As illustrated in the 2015 IBM Benchmark Report for Black Friday). M-Commerce continues to grow, and within a few years we can predict a sizeable percentage of Retail sales occurring on our small digital devices.

     

    ecom_mcom_retail1

    Data via US Census Bureau & eMarketer, 2015/2016

    Mobile has changed the ways in which we live, work and now shop. In almost any retail store you visit today, you will observe shoppers on their mobile devices, chatting with friends, checking their social media feeds, looking up product details or prices, or any variety of activities. You may have heard the term “Show Rooming” which is where customers examine your merchandise in-store, and then purchase online at a lower price. Many retailers at first tried to combat this trend by slashing their prices, offering price matching guarantees or by offering in-store exclusive products in an attempt to retain their customers. Short of the exclusive items, or by offering in-store value-added-services or readily available product information (to avoid having customer looking online), most are having difficulties in doing so. Part of the allure or need for Show-Rooming, is the consumer’s need to physically see or interact with the product(s) they are interested in, the one aspect the online world cannot achieve.
    Another factor of the online equation which is not readily evident in the channel sales figures is Web-Influenced Sales. Deloitte Digital has studied this aspect of modern retail in a report called The New Digital Divide in which, Deloitte Digital examines the relationship between the online world and its direct impact on in-store sales, which was reported to be approximately $1 Trillion at the end of 2014. In what Deloitte calls the Digital Influence Factor, there were key metrics examined between online activities, prior to and during store purchases that involve digital devices:

     

    • 84% of visitors report using digital for shopping-related activities before or during their most recent trip to a store.
    • Consumers who use a device during their shopping journey convert at a 40% higher rate.
    • 22% of consumers spend more as a result of using digital – with just over half spending at least 25% more than they had intended.
    • 75% of consumers said product information found on social channels influenced their shopping behavior and enhanced brand loyalty

     

    Despite the findings of Deloitte Digital, and others, 2015 was a challenging year for retailers. Whether directly related to the warm weather heading into the holiday season (which hurt Retailers who had invested in winter apparel), or due to the rise of E-Commerce and M-Commerce, it raises questions regarding the state of the retail industry as a whole. We all remember the recession that followed the sub-prime mortgage crisis, and how retail sales contracted due to a lack of consumer confidence and/or lack of income by those affected directly/indirectly. E-Commerce was also affected by the drop in consumer confidence, but not as hard, perhaps the budget-strained consumers spent more online in search of the best bargains.
    In 2010 Retail Sales made a slight come back in year-over-year sales, and then began to fizzle again in 2012 (Seen in figure 1). Last year, in 2015, total retail sales increased 1.42% over 2014, but when you separate the Brick-and-mortar and E-Commerce components, you begin to see two separate stories (As seen in figure 2). The E-Commerce rate of change in year over year sales has been impressive since the sub-prime mortgage crisis, equating to about an average of 14% per annum, while in-store sales have been on a slippery downward slope for the last 6 years. In 2015, E-Commerce sales increased by 14.6% over 2014 or by $43.5 Billion, while Retail Brick-and-Mortar sales slumped to their lowest level of growth at 0.51% over 2014 or by $22 Billion. At the current levels of growth and decline, it would appear that E-Commerce would be poised to take an ever larger slice of the retail pie in the next few years.

     

    Data via US Census Bureau, February 2016

    This is perhaps why Retail is in need of a Renaissance, which by definition simply means renewal, or rebirth. Retailers are in need of ways to draw traffic, and more importantly sales, into the Brick and Mortar space if they are to survive the next decade. Or perhaps the answer lies in E-Commerce and a lovely little acronym: BOPIS. Buy Online Pickup In-Store is not a new concept, but it is one sure-fire way to return your online customers to your offline space, while reducing individual E-Commerce Fulfillment costs simply by utilizing your in-store inventory and bypassing carrier fees to fulfill the orders. The challenges for some retailers however, beyond justifying the ROI, is doing it well and satisfying your customer. In our previous article, Click & Collect: The In-Store Fulfillment Challenge, we discussed findings from a 2015 JDA Consumer Survey which showed a large number of retailers who are failing the grade when it comes to BOPIS. If the retailer is able to overcome the technological challenges of integrating their distributed order management systems, POS and ERP, they seem to be failing on the human side of the equation, whether it relates to business processes or change management.
    Today’s consumers have changed: they have higher expectations from the retailers, and lower thresholds for their patience. They’re looking for a frictionless journey to purchase in the way that suits them best, and with all of the competition out there, you have to be able to offer them the most seamless and most personalized path to purchase to be able to obtain both their loyalty, and their sale. Today’s consumer is ever-connected with their devices, social in their interactions online, well informed and digitally savvy in how they use that information. In a study by Think with Google in February 2016 (Winning Omni-Channel Shoppers in Their Micro-Moments), it was noted that 82% of shoppers say they consult their phones about purchases that they’re about to make in-store, and goes on to report that a staggering 1 in 4 shoppers have changed their minds while in a checkout line after looking up details on a smartphone. These details could be product reviews, or better prices elsewhere, but they also could relate to social media and the effluence of CGC’s (Consumer Generated Content) readily available. A 2016 Bazaar Voice study (The ROBO economy: How reading reviews impacts offline sales) highlighted this trend by saying:

     

    “Forms of content can include everything from a critical rating or a comprehensive review, to a picture, a video, or a brief comment. It can be a rich experiential story, or an uncontrollable emotional outburst. Far more often than not, the time and effort to create and share this content is driven by the will of people to help, inform, protect, entertain, or inspire confidence in other consumers.”

     

    All of these points tend to show how brand control and customer loyalty have been almost completely removed from the retailer’s hands, and that the ever connected consumer is slowly winning the war. Monthly, Quarterly and Annually, Total retail sales continue to grow, but Brick-and-Mortar growth is slowing (if not dying) while its digital counterpoints enjoy the spoils. As the end of March, and the end of the first quarter of 2016 draws to a close, we will have our first indicator of the direction Brick-and-Mortar sales for the remainder of the year and beyond. Retail needs a renaissance, or perhaps this is the renaissance, a change in the method and delivery of retail shopping. Only time will tell.

    Data via US Census Bureau, February 2016

    At A2R, we’ve made a business out of helping Retailers to better serve their customers. We keep an eye on the trends retailers are facing and adopt our strategies accordingly so as to be able to offer the most optimized business processes or cutting-edge pieces of Retail Technology to help resolve their pain-point. We invite you to discover the difference A2R can bring to the table.
    Contact us today – info@advantage2retail.com

    ecommerce, mcommerce, omnichannel, retail, Smartphone, trends

    a2r_admin

    More posts by a2r_admin

    Related Post

    • The New Normal: Consumer using a smartphone in a Retail Store with an Augmented Reality Overlay on their Device

      The New Normal

      By a2r_admin | 0 comment

      The New Normal: Currently: The Retail Industry is changing rapidly. More changes have occurred in the last five years than in the last fifty. E-Commerce has grown to record highs, and will grow by 50%Read more

    • 5 Key Omnichannel Retail Strategies New Start-ups Need to Consider

      By a2r_admin | 0 comment

      5 Key Omnichannel Retail Strategies New Start-ups Need to Consider We are currently living in an age where online interconnectivity has provided new start-ups with unprecedented opportunities to reach their target markets. As such, omnichannelRead more

    • E-Commerce Evolution

      By a2r_admin | 3 comments

      E-Commerce Evolution: It is no longer a passing curiosity; E-Commerce is a growing force to be reckoned with. After the dot-com bust of the turn of the millennium, companies like Amazon and eBay were forgingRead more

    • Looking Forward: The State of Retail in 2018

      By Jasmine Glasheen | 0 comment

      Looking Forward: The State of Retail in 2018 The countdown to 2018 is upon us. Retail has evolved significantly over the past year, which means that we’ve also seen multiple store closings from legacy retailersRead more

    • The Retail Apocalypse

      By a2r_admin | 0 comment

      The Retail Apocalypse The Current State of the Retail Industry: Retail has been changing over the last five years, more so than over the last fifty years, due mostly to a change in the RetailRead more

    NextPrevious
    • English

    Search

    Recent Posts

    • Join the fight to End Homelessness
    • The Future of Retail
    • Five Years of Support
    • Brick-and-Mortar Automation: The Death of the Retail Cashier?
    • How Smartphones and Social Media have forever changed the way Consumers Shop

    Archives

    • December 2019
    • July 2019
    • December 2018
    • November 2018
    • August 2018
    • June 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • February 2017
    • January 2017
    • December 2016
    • November 2016
    • September 2016
    • July 2016
    • June 2016
    • May 2016
    • April 2016
    • March 2016
    • February 2016
    • December 2015
    • November 2015
    • October 2015
    • September 2015
    • August 2015
    • June 2015
    • April 2015
    • December 2014
    • November 2014
    • February 2014
    • October 2013
    • August 2013
    • May 2013
    • October 2012
    • May 2012
    • March 2012
    • December 2011
    • October 2011
    • August 2011
    • July 2011
    • June 2011
    • February 2011
    • January 2011
    • November 2010
    • September 2010

    Categories

    • Analytics & Dashboards
    • artificial intelligence
    • Charity
    • Consulting
    • CRM
    • design
    • eCommerce
    • Financial
    • JDA
    • Loss Prevention
    • Loyalty & Social Media
    • Merchandising
    • Mobile
    • Multi / Omnichannel
    • News
    • Partnerships
    • Photo
    • Planning & Allocation
    • Point of Sale (POS)
    • RFID
    • robots
    • Social Media
    • Strategic Planning
    • technology
    • Trends
    • Uncategorized
    • virtual reality
    • Warehouse & Distribution Management
    • Workforce Management

    Recent Tweets

    • Distressed #retailers struggled with falling #sales for years — and then came #coronavirus https://t.co/wDRRZWa7bK… https://t.co/LzMGy0h4sJ

      3 years ago
    • #Temporary #closures could wipe out up to 50% of some #retailers' annual #profits, Cowen says… https://t.co/353i6pOXV5

      3 years ago
    • Plight of #Retail #Workers: ‘I’m Scared to Go to Work’ https://t.co/Y32NhI807X

      3 years ago

    Canada
    9378 De Lille,
    Montreal, Québec,
    H1Z 2P5

    Phone Number
    514.258.9359
    Email Address
    info@a2r.ca

    United States
    Galt Dr., Fort Lauderdale, Florida 33308

    Phone Number
    954.229.4131
    Email Address
    info@advantage2retail.com

    Links

    • Services
    • Solutions
    • Industries
    • Media
    • Company
    • Support

    Featured News

    • Join the fight to End Homelessness

      Join the fight to end homelessness     The holiday season is

      4 December, 2019
    • The Future of Retail

      The Future of Retail For over a decade and a half, Advantage2Retail

      8 July, 2019
    • Five Years of Support

      Five Years of Support: You can help to put an end to

      4 December, 2018
    © 2017 Advantage 2 Retail | Tous droits réservés.
    • Services
      • Retail Services
        • Consulting
        • Business Process Review & Optimization
        • Systems Implementation & Integration
        • Custom Software Development
        • Project Management
        • Training, Technical & User Support
        • IT Staffing
        • Outsourcing
      • JDA Expertise
      • E-Commerce Expertise
    • Solutions
      • Veras Retail Solutions
      • HighJump Retail Advantage
      • Jesta I.S. Vision Suite
      • Pivot88 Solutions
      • Beehivr Field Marketing Applications
      • Point of Sale Systems
        • Veras CheckOut
          • Veras Activate
          • Veras Control
          • Veras Extend
          • Veras Locate
          • Veras Reach
          • Veras Stock
        • Jesta I.S. Vision Store & Mobile
        • WinDSS In-Store System
      • Merchandise Management Systems
        • Jesta I.S. Vision Merchandising
        • JDA Merchandise Management System-I
      • Warehouse Management Systems
        • JDA Warehouse Management
        • HighJump Warehouse Management System
        • Jesta I.S. Vision DC
      • Analytical Tools
      • HR & Workforce Management
    • Industries
      • Retail
      • Distribution
    • Media
      • Blog
      • A2R News
      • Resources
      • Client Feedback
    • Company
      • About Us
      • Executives
      • Technology Partners
      • Careers
      • Contact
    • Support
    • English
    Advantage2Retail