While digital technology continues to reshape the way companies and consumers interact, social media is not replacing the in-store shopping experience, according to a new report by PwC titled Demystifying the Online Shopper: 10 Myths of Multichannel Retailing. Based on a survey of more than 11,000 shoppers globally, the study debunks the conventional wisdom about online consumer behavior and helps companies better measure their approach to multi-channel retailing.
Shoppers today have access to multiple channels throughout their shopping experience, with many resources available before making their final purchase decisions. According to the report, 49 percent of survey participants said they use social media every day, but only 12 percent are using social platforms to shop. Instead, a significant 59 percent use social media to follow, discover and give feedback on brands and retailers. PwC found that social media is not a major traffic driver to online stores, as 45 percent of consumers continue to shop in a physical store daily or weekly.
"Retailers should have realistic expectations when it comes to channels and devices, as shopping trends may not change drastically and social media and tablets are likely not taking over any time soon according to our survey respondents," says Susan McPartlin, PwC's U.S. retail and consumer sector leader. "While many forecasts point toward devices and social media dominating in retail, companies today need to utilize their multiple channels to engage with consumers and use social media as a marketing and communication tool to create value. Our report finds that the physical store remains the centerpiece of the purchase journey, while devices are used significantly for product research and deals."
The report addresses 10 myths about multi-channel retailing and captures some ideas that companies can consider to keep up with their customers:
• Myth 1: Social media will soon become an indispensable retail channel
Social media isn't likely to become an important retail channel anytime soon and currently is a driver for more shopping across all channels, not just online stores.
• Myth 2: Stores will become mainly showrooms in the future
For most companies, the physical store remains the centerpiece of the purchase journey. However, companies need to determine how to best drive purchase activity across all of their channels both physical and online. There still is a place for the store to be a showroom—as a supplement for online pure players, rather than a new model for brick-and-mortar retailers.
• Myth 3: The tablet will overtake the PC as the preferred online shopping device
Tablets and smart phones won't catch up any time soon as these devices are used at the end of the purchase journey, particularly in-store, while shopping.
• Myth 4: As the world gets smaller, global consumers are becoming more similar
A range of local differences in consumer behavior exists, and retailers still need to cater to local trends.
• Myth 5: China is the future model for online retail
China is at the forefront of some key trends, but its multi-channel and online model is unique to the culture, as shopping habits are dramatically different in China.
• Myth 6: Domestic retailers will always enjoy a "home field" advantage over global retailers
Foreign retailers are making inroads into consumers' lists of favorite multichannel retailers. However, retailers need to keep in mind that it's not just the local base of domestic retailers they compete with, but with global players as well.
• Myth 7: Global online pure players will always enjoy a scale advantage over domestic online pure players
Many domestic online pure players are holding their own as they have better access to local market knowledge.
• Myth 8: Retailers are inherently better positioned than brands, as they are closest to the customer
Consumers are shopping directly from manufacturers and many no longer distinguish between retailers and their favorite brands. Retailers need to use core strengths—including warranty programs and email promotions—that drive traffic in-store.
• Myth 9: Online retail is cannibalizing sales in other channels
Consumers are actually spending more with their favorite multi-channel retailers, not just shifting some purchases to a different channel.
• Myth 10: Low price is the main driver of customer spend at favorite retailers
Customers value quality, innovative brands over price when shopping at their favorite multi-channel retailers.
"A multi-channel retail strategy can be extremely advantageous. The more minutely retailers can identify how consumers are utilizing the different channels, the more success they will have," says Lisa Feigen Dugal, PwC's U.S. retail and consumer sector advisory leader. "Companies need a strategy that will create value by connecting with consumers and engaging with them directly online, while providing a meaningful, seamless shopping experience across all channels."
For more information and to download an electronic copy of Demystifying the Online Shopper: 10 Myths of Multichannel Retailing, visit www.pwc.com/us/retail.
Source: PwC US