Let’s be honest: brick and mortar retail, while not dead, isn’t exactly thriving. Though the vast majority of transactions still take place in-store, online profits are growing while physical retailers like department stores shrink.
Smart money would seem to be on online retail — and yet, some of the largest online players, like Amazon, Bonobos, and Warby Parker, are making significant pushes into the brick-and-mortar space.
So what’s going on?
The trouble is, the retail world is approaching the issue with blinders on. It’s not enough to think of this as black and white, online vs. in-store. Consumers are complex — increasingly so, in a world of media fragmentation, ad blockers, and ever-expanding customer choice — and so are their buying habits.
But the retail market has fallen for a false narrative of failing stores and digital dominance. The answer is more complicated.
So how can retailers connect to customers, reach across channels, and save their brick-and-mortar profits?
It’s an omnichannel world
First, the facts: 65% of online shoppers said they’d prefer to buy from a physical store if given the choice, according to a study by Pew Research Center. And while fears of showrooming — shopping around in-store only to buy later online — have seized traditional retailers, only 46% of consumers have done so, while 69% have done the opposite. So clearly, the appetite for in-store purchases still exists among consumers.
But consumers don’t think of shopping as a binary, in-store vs. online experience, and neither should retailers.
In a world where customers compare prices online, ask for recommendations on social channels, and engage with content from prospective vendors, it’s up to retailers to join their customers in omnichannel engagement — merging the online and in-store experience to better suit consumers’ needs. The question is, how?
Encourage in-store for online shoppers
When one retailer, looking to bolster in-store sales, sent a coupon valid either in-store or online to customers who have previously only shopped digitally, profits increased by 800%. But take care — encouraging online shopping for customers who favored in-store experiences reduced profits.
Interestingly, the more channels a customer engages with, the more they spend.
Create shareable experiences
Omnichannel doesn’t have to mean just eCommerce; the social channel is increasingly important for retailers as well. Visual storytelling on social media is rapidly expanding — 60% of brands already use video in their marketing strategies, and 74% say they intend to do more.
Major platforms like Instagram are evolving to support eCommerce, making social even more vital to retailers. Promotions like Taco Bell’s Snapchat filter have been viewed hundreds of millions of times — that kind of engagement is hard to buy.
Ensure a top-notch digital experience
Consumers are likely to browse around the web before making an in-store purchase. But in a recent study of more than 600 digital retailers on how easy it was for consumers to shop online, nearly half got a failing grade. And consumers who have a bad experience on a retailer’s website are much more likely to leave for Amazon — which, not coincidentally, has the second-highest-rated website experience in the US.
For retailers looking to improve their digital experience, 41% of consumers say better personalization (an area where Amazon is considered fairly weak) would make them more likely to buy from a retailer’s site.
Be smart about search
Perhaps the most important “channel” in “omnichannel” is organic search, which drives 51% of all visitors to both B2C and B2B businesses, and is ripe with opportunities for major market share. In fact, our quarterly market share report revealed that nearly three quarters of retail’s organic search market is up for grabs. The biggest competitors like Nordstrom and Amazon only own 5% — that means millions of dollars are still on the table.
Our quarterly market share report showed massive opportunities for retailers to claim organic market share.
Word to the wise, don’t get too caught up in keywords and Google algorithm updates; the most important factor in organic ranking is good content. Provide value to your customer, and Google will separate wheat from chaff.
In an ideal world, you could double up with both paid and organic results, especially for high-value terms. But if you’re trying to stretch your budget to expand your reach as much as possible, consider buying paid results primarily for searches where you don’t already rank organically.
Can retail turn it around?
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Like any modern industry, if brick-and-mortar retail wants to save its profits, it has to evolve. Change is coming to a host of verticals, from insurance to real estate to hospitality.
While the specter of digital dominance is enough to scare any brick-and-mortar CMO (after all, nobody wants to be the next Blockbuster) there are plenty of interesting ways that retailers can innovate and bring real value to customers.
No one trying to make an impact in their customers’ lives can choose to ignore how those customers choose to interact with vendors — and there’s no doubt that the market has changed. The question is, will retail do the same?