The story of retail today seems to be paradoxical. Every bit of news about store closures and bankruptcies is offset by one of retailers with thriving stores, like Apple, Ulta, Sephora, and Warby Parker. At Sapient, we believe a key determinate of future success among retailers will be digital agility, an embrace of technology, and a deep understanding of the customer. If you look at the leaders in retail, each are utilizing these factors and gaining ground with their customers.
Against this backdrop, we are happy to announce the release of research about the patterns of the modern customer. Our latest report, in conjunction with Salesforce Commerce Cloud, “Shopper-first Retailing,” combines data from 300 million shoppers, a global survey in six countries (and 6,000 respondents), as well as 27 executive interviews.
We explored three main areas: The Evolving Storefront: what do people want from stores today?; Mobile as the Compass; how are people shopping with mobile digital tools?; Intelligent Experiences: Back office functions and the role of data: how are retailers embracing data in new ways?
What did we find?
The majority of consumers (60%) start their shopping hunt in digital channels.
Online marketplaces like eBay and Amazon are now more popular than search engines (22% vs. 19%) when it comes to product discovery.
Stores are still the preferred shopping channel even among the most tech-savvy generation (Gen Z); 58% of respondents preferred stores.
Social media (for now) is a traffic driver, not a sales driver. Just 1% of all sales come through social channels, vs. 4% of all traffic
We also looked at new business models including fast fashion and pop-up stores. We concluded that fast fashion is likely to continue to be a successful strategy. Why? Having the latest styles drives store traffic; 67% reported they were more likely to visit if there are new products in the store. Pop-up stores don’t match many consumer preferences: 79% of people want to leave stores with a purchase in-hand.
Mobile, of course continues to be a key driver of growth in digital commerce; it is the top ecommerce traffic driver, but isn’t yet as efficient in driving sales; just 40% of buyer traffic is from mobile devices. This 13-point gap represents a new opportunity for companies that can embrace payment technologies like Apple Pay, Android Pay, and the like. In fact, several retailers in our study used Apple Pay for the 2016 holiday season, and saw promising results and improved checkout rates.
One of the most remarkable findings in the study is the widespread use of mobile within the four walls of the store;59% of consumers globally reported using mobile in the store in the past 30 days, primarily to compare prices, research product details and actually purchase products.
The report includes further insights on personalization and data-driven retailing, and case studies on leading retailers.
The bottom line is this: there is good news – and many opportunities for retailers – despite the recent drumbeat of doom and gloom.