A critical shift has occurred in the path to purchase: half of U.S. retail sales are now influenced by digital channels. As shoppers increasingly make decisions online before purchasing in-store, the digital experience must play a central role in driving consumers from clicks to bricks and back again. This represents a sizable challenge for retailers, many of which are burdened by legacy technology systems and hobbled by a lack of integration between e-commerce and brick-and-mortar teams. Nonetheless, retailers that delay creating more holistic digital-physical customer experiences will find it increasingly difficult to compete with both Amazon and their more digitally advanced peers.
1. Inventory transparency
This is the single biggest thing retailers can do online to drive foot traffic. Inventory visibility across digital channels helps the consumer mentally commit to a purchase before visiting a store while also opening opportunities for retailers to boost basket size during the in-store visit. In one study, 73 percent of respondents said they would be likely to go into a store if relevant products were shown as available online — versus just 18 percent who said they would head to a store if a website had no information on inventory availability.
This is not an easy upgrade, especially for retailers older than a decade or two that use systems designed for a traditional retail model. Gaining a cohesive view of inventory across a POS and ecommerce system can be a multiyear, capital-intensive challenge that requires three to five years to effect.
Who’s doing it well
Only 12 percent of prestige Fashion brands in the L2 Index let visitors check local inventory from brand sites, 19 percent of Department Stores and a third of Specialty Retailers. With their hand most forced by Amazon, Big Box stores are relatively advanced on this metric. Best Buy’s app lets users toggle between “closest stores” and “immediately available.” For each of its 40,000-plus SKUs, Home Depot lists where an item is available and the amount of stock on hand, as well as aisle and shelf location (see below). On both app and desktop, Toys “R” Us lists which nearby stores stock an item and goes the extra mile by updating the quantity available in a shopper’s selected store.
2. Closing the loop: inventory + preferred store
A range of retailers provide real-time inventory online and enable consumers to save a preferred local store, but few leverage the information stored to a consumer’s account to automatically show shoppers what’s available nearby. Bloomingdale’s is among the retailers missing this opportunity to drive online shoppers into stores: while account holders can save a preferred store, inventory is not displayed on product detail pages when a consumer is signed in, and checking inventory requires re-inputting a zip code to find your preferred Bloomingdale’s.
Who’s doing it well
Best Buy, Crate & Barrel, Home Depot, Sears and Walmart are among retailers that adeptly link up these two pieces. Best Buy lets shoppers select up to three locations, and product pages show the nearest store where the product is in stock. In the apparel category, Abercrombie & Fitch is halfway toward integration, enabling consumers to save a preferred store and then highlighting in product pages where the item is available via an embedded map.
3. Click and collect / reserve online, pick up in store
British retailers across categories have led the way in click-and-collect initiatives, enabling customers to order online and pick up in stores (as well as curbside, at collection spots or from lockers). Some are seeing upward of 70 percent of online orders fulfilled via click and collect. American retailers are significantly behind their U.K. peers, whose successful initiatives can provide inspiration for brands looking to drive more shoppers into stores.
Some retailers also let customers reserve in-store products online without completing the purchase — arguably a drain on sales associates but another potential incentive for consumers who prioritize convenience and efficiency.
Who’s doing it well
In the U.K., Sainsbury’s, Tesco and Waitrose have opened “dark stores” to fulfill online orders — pseudo-warehouses that are set up like grocery stores but shopped exclusively by professional pickers. Prestige department store Harvey Nichols has tested a “Click & Try” service: Customers could buy products online, then go into the store to determine accurate sizing. John Lewis leverages sister brand Waitrose, the grocery retailer, which has many more collection points.
Among the few Fashion and Specialty Retail brands that enable U.S. customers to “reserve online, pick up in-store” are Gap Inc.’s Gap and Banana Republic brands, as well as Stella McCartney.
4. Email drives to store
Email has been greatly under-utilized as a channel to drive in-store visits, even though it’s one of the easier tactical upgrades a brand can make. Brands frequently fail to include prominent links to a store locator in the body of emails, and miss opportunities to promote in-store events or services and hybrid fulfillment options like click and collect. Instead, email marketing tends to emphasize e-commerce incentives like free and same-day shipping.
L2’s Omnichannel Retail study found that only brands in the Home category are more likely to push consumers to stores via email marketing than to promote free shipping. The study also found that brands are three times as likely to promote an online-only offer via email than an offline-only offer. The preponderance of e-commerce-only email offers is suggestive of where email marketing typically sits within an organization.
Who’s doing it well
Guess promotes in-store events via email, coupled with a strong RSVP call to action and offline-only discounting. Walmart, Staples and Banana Republic have also frequently promoted in-store-only sales via email. These four retailers were all strong performers in L2’s omnichannel matrix, falling in or near the “Role Models” quadrant.
5. Mobile as connective tissue
Savvy brands are using mobile as a connective tissue between online and offline programs, while others are failing to capitalize on the potential for mobile to drive foot traffic. Almost 8 in 10 searches conducted on smartphones result in a purchase made offline, compared with 6 in 10 on laptops and tablets — underscoring the critical need to integrate brick-and-mortar functionality across mobile-optimized sites and apps. For instance, real-time inventory status for Big Box retailers in the L2 Index is available on 59 percent of desktop sites versus 22 percent of mobile sites. If anything, those ratios should be reversed to service the local intent signaled by mobile customers.
Who’s doing it well
A best-in-class app can incentivize store visits by making the shopping experience easier and faster or by notifying customers when items of interest arrive in stores. Target’s app provides aisle-by-aisle navigation to the exact location of products on the user’s shopping list. Walgreens provides floor plans within its app, sends push notifications when orders are ready (e.g., for pharmacy and photo services) and enables easy clipping and scanning of mobile coupons.
Users of the Nordstrom Rack Store app can sign up for “Just Off the Truck” alerts: push notifications, segmented by four style personas and 100-plus product categories, that notify customers when certain products hit shelves. (A “Quiet Time” feature allows users to manage push notification volume.) In-store shoppers can use the app’s Search and Send feature to scan tags and determine if alternate sizes are in stock at other nearby Rack locations — a great value-add.
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