June 27, 2014 Opinion piece
Over the past decade or so the relationship between e-commerce and high street retail has often been regarded as unbalanced, with the perceived competitive advantages available to online retailers commonly drawing accusations of them ‘killing’ the high street.
This article first appeared in the May edition of Internet Retailing magazine
However, while there have been many changes to our high streets and shop vacancy rates continue to hover around the 20% mark, they have not been ousted from the retail experience by the web; rather they remain an integral part of the shopping journey for many.
Now that technology is evolving to enable the potential for highly relevant and personalised digital experiences in-store, attitudes in general regarding online have tended to shift toward a more positive slant. The average shopper, however, has long anticipated that highly consistent and seamless experiences, irrespective of channel or device, should be standard - easy to say perhaps, but getting all systems, infrastructure and processes linked in a way that is truly supportive of an omnichannel proposition is a highly complex challenge in reality.
Technology undoubtedly continues to pose numerous challenges, but can it also enable retailers to properly realise the true advantages that digital can offer?
The modern customer
To answer this question, we need to understand the modern customer - GS1 UK recently surveyed 2,000 people to help understand their attitude toward cross-channel shopping.
A few years ago it may have seemed to some that online shopping would almost entirely displace the traditional store, but consumers appear equally wedded to both formats. When asked which shopping experience they preferred, 52% said online and 48% in-store. This close split may be testament to the fact that the borders between them are becoming blurred beyond recognition.
When asked the reasons for their preference, there were few surprises. For online, it was the conventional perception of greater convenience (86%), value (59%) and choice (49%). For those preferring in-store it was the opportunity to try before buying (80%), social experience (34%) and, interestingly, the fact it is easier to see special offers (30%).
Much has been written about the threats and opportunities of showrooming, but it is perhaps easy to misunderstand why it is happening when considered in isolation from other behaviours. When asked if they had ever researched a product offline and purchased it online, 71% said that they had. This could be interpreted as evidence of the scale of the threat, but a further 80% said they had researched a product online and purchased it offline.
What this actually suggests is that showrooming is simply a small expression of the overall cross-channel shopping experience that many consumers engage in as standard. Technology has invited consumers to use multiple channels, and they have responded.
As these figures reveal, there is no single solution that will satisfy every customer; a range of available options for engagement and fulfilment are often needed to meet the requirements of an individual’s circumstances and preferences. One of the major themes in multichannel fulfilment at present for example is click and collect. This option may be growing in popularity, but the survey found that 75% were not disappointed if a retailer did not offer it. Clearly, its availability will be useful in some contexts but it still only represents one part of the cross-channel experience.
Product information – a new battleground emerging?
Many retailers now aspire to be omnichannel, largely because their customers exhibit so much cross-channel behaviour. Yet so much about the quality of the experience depends on the relevance, consistency and accuracy of information provided, and delivering on the promise of the kind of omnichannel experience the modern customer demands across all platform and channels is a complex process.
Failing to deliver on this is soon exposed, and quickly drives potential customers away from purchase decisions. 42% of respondents to our survey said they had given-up on an online purchase due to a lack of information about the product, while a further 24% said that they do not trust that the product information provided online is as accurate as that available in-store.
Credibility is so important to an online merchant, and inaccurate or incomplete information can have a serious impact on that merchant’s ability to sell. Almost 50% of respondents said they had given up on an online purchase because they did not trust the seller.
As shopping journeys become ever-more complex and technology continues to develop all manner of new devices, networks and touch-points, we are seeing the integrity of product information begin to emerge as a key differentiator for brands.
Omnichannel-ready data
One of the major issues preventing the roll-out of successful omnichannel strategies concerns the very thing that is driving the need for them; the technology is developing at such a rate at present that new devices, platforms and networks enter the market every year and begin competing for consumer attention.
The one certainty is that consumers will continue to utilise the full range of options available to them in an integrated manner. New technology finds its way into the hands of customers a lot quicker than retailers can update their systems to support it, and this imbalance is likely to continue. Wearable devices seem set to be the next technology that will provoke a seismic shift in the way that brand engagement occurs, but whether it reaches widespread adoption or will be replaced quickly by a subsequent evolution remains to be seen.
What is clear is that irrespective of where technology is taking us, there will always be a requirement to identify, provide information on, and transfer physical goods through increasingly complex supply chains and to satisfy the increasingly complex relationship with the end user across this proliferation of touch-points.
Keeping on top of this successfully can appear a daunting and costly prospect at times but while technology poses the challenges, it can also offer its own solutions.
It’s something that we take for granted now, but 40 years ago the introduction of bar codes into retail was a technological revolution, enabling far greater efficiency for businesses and their supply chains.
It was a landmark moment for the retail industry, and we are at the threshold of another major shift now, which will see the roll-out of new product identification standards to support the linking of wide ranges of disparate digital datasets through use of structured data.
Examples of the types of datasets that might be linked and made accessible to consumers include detailed information on product attributes, local stock levels and supply chain traceability as well as user-generated content.
Consumers want to have access to accurate and detailed data in real time, and through all touch-points where engagement occurs. Through the embedding of data-linking identifiers within structured data, these standards will help enable the kind of high quality, omnichannel experiences that customers increasingly demand.
It may seem that we live in a highly technical age, but in reality the full impact of digital is only just starting to be realised. Once the Internet of Things becomes fully integrated into our daily activities, we will be in an entirely new phase of digital, in which there will be little meaning to the term ‘offline’ – and retailers will need to adapt to the associated challenges.
But every challenge also brings opportunities, however quickly they may arrive, and the way that digital enables brands to get closer to their customers than ever before clearly offers fantastic potential for strengthening relationships.
The success of these relationships will be determined by the quality of the experience on offer, alongside the reliability and depth of the supporting information available, wherever and whenever that customer should choose to engage.
Keeping up with the pace of change is a serious challenge, but GS1 UK will continue working with industry to help facilitate this fundamental shift in the way retailers provide information to their customers.
David Smith, Solutions Manager - Digital, GS1 UK