AT Kearney is out with a new omnichannel study saying that while "digital retailing is capturing headlines and inspiring spirited debate as retailers plan how best to invest for future success…. beyond the headlines, physical stores remain the foundation of retailing, evidenced by the fact that 90 percent of all retail sales are transacted in stores and 95 percent of all retail sales are captured by retailers with a brick-and-mortar presence."
The report goes on:
"It is important to acknowledge that shoppers actually find physical stores appealing—especially when we read all the hype about online and digital. Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences, and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases.
"The store plays a crucial role in online purchases, as two-thirds of customers purchasing online use a physical store before or after the transaction. In these cases, the store makes a significant contribution to converting the sale, even though the transaction is eventually registered online. In other words, the source of value creation (brand building, product awareness) is distinct—or decoupled—from the place of value capture (sales transaction). This is particularly important for retailers, as they consider resource allocation decisions across channels to ensure that the true value the physical store creates is accounted for properly.
"The future of retail is solidly anchored in the brick-and-mortar channel. With customer satisfaction at the core of retailing, successful retailers will do their part to provide consumers with the ability to shop when and where they want. And it’s been proven that having multiple channels is good for business.
"The debate should not be a question of digital or physical. Successful retailers understand how each customer touch point adds value (as defined by the customer) and develop omnichannel strategies - with stores as the foundation - that maximize customer satisfaction and profitability."
The report goes on:
"It is important to acknowledge that shoppers actually find physical stores appealing—especially when we read all the hype about online and digital. Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences, and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases.
"The store plays a crucial role in online purchases, as two-thirds of customers purchasing online use a physical store before or after the transaction. In these cases, the store makes a significant contribution to converting the sale, even though the transaction is eventually registered online. In other words, the source of value creation (brand building, product awareness) is distinct—or decoupled—from the place of value capture (sales transaction). This is particularly important for retailers, as they consider resource allocation decisions across channels to ensure that the true value the physical store creates is accounted for properly.
"The future of retail is solidly anchored in the brick-and-mortar channel. With customer satisfaction at the core of retailing, successful retailers will do their part to provide consumers with the ability to shop when and where they want. And it’s been proven that having multiple channels is good for business.
"The debate should not be a question of digital or physical. Successful retailers understand how each customer touch point adds value (as defined by the customer) and develop omnichannel strategies - with stores as the foundation - that maximize customer satisfaction and profitability."
- KC's View:
-
Of course customers prefer stores. Now. And probably for the foreseeable future.
But … I'd be careful about this. When the study says that the "future of retail is solidly anchored in the brick-and-mortar channel," it is important to remember that while an anchor can keep your moored, it also can drag you the bottom. Not being flexible to enough to change as consumers change … and they will change … would be a serious mistake.
I'm sure the folks at Blockbuster and Circuit City believed right until the bitter end that their futures were anchored by their stores.
If I may digress for a moment … I was with a friend of mine over the weekend, visiting me in Portland, who decided that he wanted to send some postcards to friends and family. He went into a Safeway and asked a young woman if they carried postcards. I swear, she looked at him, utterly mystified - she had no idea what postcards were.
It only would have been better had she said, "Sir, they're in the back … with the buggy whips, eight track tape players and VHS recorders."
