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The Retailer Landscape is changing

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This is the second in a three-part series of articles based on a presentation that two of our experts, Mert Bürian and Yannis Boukas, delivered at PRS IN VIVO’s De-coding the Omni-Channel Path-to-Purchase business breakfast. In the first part, we examined the evolution of the consumer journey; ​in the second, we show you why – in a changing retailer landscape – a brand’s strategic relationships with retailers are more important than ever.

Mert Bürian and Yannis Boukas are both much sought-after as consultants and speakers for their expertise related to brand strategy, eCommerce and digital transformation. If you would like to see the slides this article is based on, please download them here.

The digital disruption of the retailer landscape

1.8 billion people worldwide purchased goods online during 2018, with global eRetail sales reaching $2.8 trillion (USD). Projections say that this already enormous figure will rise to $4.8 trillion by 2021[1].

eRetail sales account for 12.1 per cent of all retail sales in Asia Pacific, and 8.1 per cent in North America[2]. 87% of UK retail purchases are made online[3], while more than half of UK shoppers say that prefer to do their shopping online[4].

Shopping, as we know it, has been severely disrupted – particularly in the case of the categories we see in the graph below, with pet care being the category that has been most affected:

Retailer Landscape Journey Example 1
It’s difficult for retailers to easily categorise shoppers and predict their shopping preferences or behaviours in the way they used to – Image source: ClickZ Intelligence / Catalyst

While buyers of the above products may largely prefer to shop in-store, a growing number prefer to do so online. The fact that there is such a blend of preferences in the constantly evolving retailer landscape goes to show just how difficult it is to pigeon-hole today’s shoppers and predict their behaviours.

Digital touchpoints and their influence on shoppers

In the below slide, we see how much more hold online product reviews, eCommerce sites (like Amazon) and Google search now have over shoppers in comparison with a traditional consumer channel like TV advertising.

Retailer Landscape Journey Example 2
The growing influence of online product reviews and search on consumer journeys – Image source: ClickZ Intelligence / Catalyst

According to a research study by Forrester, ​an incredible 71 per cent of consumers begin their journeys by using a search engine to discover new products and services (initiation), and 74 per cent reported using a search engine for consideration and purchasing (research, comparison, transaction)[5]

Consumers also clearly see product reviews generated by other shoppers as important sources of information and recommendations that could influence their purchasing decisions.

Search, too, is incredibly important.

As we can see, the digital transformation is affecting the entire consumer journey in this new retailer landscape – not just the end purchase.

Amazon search now a real challenger to Google

In the space of the past three years, people have shifted their preference from using Google to perform product searches to using Amazon instead.

51 per cent of shoppers begin their journey on Amazon, compared to 16 per cent on Google, and 55 per cent purchase their goods on Amazon, showing that where shoppers start their journey is usually where they finish it.

Amazon vs Google in search
Amazon is seriously challenging – and even, in some cases, surpassing – Google as the first place that shoppers go to search for products – Image source: Jumpshot (2018)

You can see a seismic shift in the slide below based on figures released as part of a Future Shopper study by Salmon:[6]

Example 4
51 per cent of shoppers begin their journey on Amazon, compared to 16 per cent on Google – Source:

What is clear from all of the above is that Amazon is very seriously competing with Google as a preferred means of searching for consumer products online.

Retailers are embracing the Omnichannel

Despite physical stores closing at an alarming rate, there is still a place in the new retailer landscape for physical stores, as retailers embrace the Omnichannel.

Today’s retailers need to adopt an Omnichannel approach, whereby their online sales complement their offline sales – and vice versa – rather than competing with or cannibalising each other.

With mobile now accounting for more than half of all eCommerce traffic[7], and the growing influence of ROBO (‘research online, buy offline’ – where consumers research products online but then go and buy them in-store)[8], Omnichannel really is the way to go for retailers.

Retailers need to better understand – and harness – the influence of digital touchpoints like Product Detail Pages filled with Product eContent, and ratings and reviews, social media recommendations and search (both search through search engines and eCommerce platforms’ own search facilities).

​By getting these aspects right and properly getting to grips with consumer behaviours, retailers adapting to the changing landscape will be in a better position to enhance the overall shopping experience, which now transcends the online and offline in an Omnichannel blend.

What are the implications of Omnichannel becoming the new norm?

Many retailers are now – extremely advisably – adopting ‘bricks and clicks’ strategies that see them operate both online and offline, using the Omnichannel to adapt to the consumer journey and shopping experience demands.

Instead of a single touchpoint for consumers, the trend in retail over the past few years has been to widen the net that brands use to catch leads and convert them.

eRetail platforms are now strong digital media platforms offering Retail Digital Media ​channels that allow brands to execute comprehensive advertising programs with multiple purposes, be it for conversion, awareness or consideration.

One of the huge advantages that Retail Digital Media has over traditional media channels is that it is highly measurable, and can give both retailers and brands incredible performance data insights that can inform and improve future campaigns.

Data across many categories can be used to target relevant, personalised messages to consumers and measure the effectiveness of that messaging at growing sales.

The importance of a strategic Omnichannel approach

A landscape offering this many opportunities demands many questions of brand and marketing managers, and calls for them to make important strategic decisions in regards to how they execute their plans on eRetail platforms.

As this retailer landscape develops and the impact of eRetail continues to exponentially increase, these strategic decisions will have an increasing impact on consumer behaviours, and the way that brands strive to match them.

​With eRetail imposing an ever increasing range of strategic decisions onto marketing departments while also having a growing impact on today’s consumer, the strategic role of retailers is becoming clear and the Omnichannel approach essential for success.

In conclusion – Omnichannel calls for a strategic approach

Retailers are no longer just a sales channel where brands execute shopper marketing. With the rapid shift in digital consumer habits and eCommerce, the role of the retailer is much more strategic.

Amazon, for example, is both a retail partner to CPG brands and a media property for brand marketing investment. Traditional retailers may lag behind Amazon in digital audience, but that gap is likely to close.

Traditional retailers also bring something pure-play eRetailers don’t have: huge physical audiences that can experience brands both in-store and out-of-store.

The real winners in this new retailer landscape will be those that adapt best to the Omnichannel and adopt strategies that allow them to keep step with consumers along their purchasing journeys, thereby putting them in a much stronger position to drive more conversions.

In the next blog article in this series, we explore how important it is for brands to pick the right strategic retail partner in this new landscape, and the tried-and-tested method we use for helping brands to do so.

This article was written and created by the eBusiness Institute team.

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