SYS-CON MEDIA Authors: Zakia Bouachraoui, Liz McMillan, Carmen Gonzalez, Roger Strukhoff, David Linthicum

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The Convergence of Online & Retail: The Future of Commerce

How the melting barriers between the online and offline world are affecting commerce

Abby needed to buy a new car seat for her daughter, who was starting to outgrow her infant seat. She started the search for a new car seat by going to Google and typing "best car seat for toddlers" and "car seat reviews", trying to figure out the key differentiators between different types of seats and brands.  Finding mostly straight commercial information, she decided to go to Buy Buy Baby to browse their selection of car seats and to ask a sales associate for advice.

Having physically tested the car seats and gathered valuable advice from the sales rep and other parents at the store, she used her mobile phone to perform a price comparison using a QR code scanner. Having found an online retailer offering this exact car seat at a 30% discount, she ordered her car seat and had it delivered and installed within 3 business days.

Most of us are familiar with this purchase cycle, whereby consumers use a myriad of different technologies to research and purchase items. The barriers between the offline and the online world are melting to create a converged shopping environment, where users navigate from offline to online to social to research and purchase products.

Evolving technologies like Shopify, where users can have both and online store and a brick-and-mortar store with unified inventory tracking, customer relationship management, and point of sale (POS) payment systems, have facilitated this transition.

The real question for retailers now is - as buying patterns evolve and consumers become more proficient in multi-screen and multi-platform environments, how do businesses evolve to establish leadership across the blurred lines between virtual and brick-n-mortar environments?

online retail.jpg

Legacy Systems vs Single-Platform POS

Throughout the past fifteen years, ecommerce systems technology that was designed for online shopping has surpassed POS applications. In the past, legacy systems were initially made to solve specific issues for specific channels. Unfortunately, this led to many new problems, resulting in lost time and money for many businesses.

The solution? A single consumer platform to manage interactions and transactions across all channels. Even though the advantages of a single commerce platform are many, including synchronized data and real-time intelligence in-store, it's been estimated that only 40% of retailers are considering the transition. However, for those retailers who are still undecided, the other advantages should be considered as well, including:

  • Optimization of promotions across channels with built-in SEO features

  • Consistent product data across touchpoints

  • Order visibility with a centralized management dashboard

  • A single view of customer data and accurate view of inventory

Following the Consumers

Prior to the introduction of the internet, consumers would be hard pressed to find reliable product information. As a result, they were required to analyze a product's physical packaging and rely on the merchant's knowledge to determine whether or not they were about to purchase something of quality. Nowadays, consumers have access to an entire library of online resources, making them much more informed about the products and services they purchase.

Today, there are three major ways that people shop: online, mobile, and the traditional brick-and-mortar. While it's true that 49.5% of total U.S. retail stores today are impacted by the web in some way, there seems to be the common fallacy that offline purchases are more valuable than purchases made via virtual checkout. In truth, the consumers who offer the most value to your business are those who utilize multiple channels to access your business-- roughly four-times as valuable compared to single-channel shoppers. This is because the better connected your customers are to the brand, the more likely they'll stay connected and remain loyal.

With that being said, there will always be plenty of room for pure-play ecommerce businesses, therefore retailers with physical stores should definitely consider making the transition to making their products and services available online, as more and more consumers are ceasing to see an actual distinction between shopping online and in a store.

But why? In the end, there is no difference to the consumer whether he/she finds a product online and buys it in the store, or purchases a product on retailer's site simply because it is more convenient or more affordable. When a product can be shipped to a customer, no matter where he/she is, the question of where a sale takes place continues to decrease in relevance.


online retail 3.jpg

But even with that being said, and as hard as it may be to believe, there are still plenty of customers who prefer to shop in brick-and-mortar stores. In fact, on average, 90% of all revenues are generated by physical retailers, but this doesn't change the fact that retail ecommerce sales are continuing to grow at an alarming rate. By being able to embrace the convergence of physical and digital commerce, retailers are putting forth their best effort to ensure their viability in the long term.

Providing the Best from Both Worlds

As consumers begin to see less and less of a distinction between ecommerce and offline shopping, this may also mean that convergence will impact how all online retailers will continue to provide customer service, as well as how brick-and-mortar retailers plan to enhance their physical store.

In general, today's consumers tend to expect the same level of customer service regardless of where a purchase is being made. For example, customers expect to have an attentive sales associate to speak with when they are making a purchase. And, because that is what they have been accustomed to, they will often expect the same level of satisfaction if they were to shop online as well. With this in mind, it is recommended that traditional retailers supply reliable product information online so that they continue to help keep customers informed.

online retail 2.jpg

Furthermore, in addition to affecting customer service, convergence of online and retail can also impact branding, particularly for brick-and-mortar retailers. In the past, and until very recently, retail stores primarily served as a way to distribute products. However, after online shopping came along, and thanks to UPS, FedEx, and the U.S.P.S., getting a product became much easier than ever before, which forced physical stores to rethink their marketing strategies, as it no longer makes sense to have sales of product as the primary metric for a physical store.

The Future of Commerce

There is no doubt that in-store retail is changing, and the majority of businesses have been quick to adapt to give their customers the ability to shop both online and in branded stores. Brick-and-mortar stores will always be a necessity to offer customers an enhanced experience.

Take Apple, for example. Customers may see less stock around the store; however, that extra space allows more than enough room for helping customers and showcasing products. With digital capability, customer data can be shared across all channels with store assistants, allowing a business to both showcase products, order and take payment. This also makes clienteling and assisted selling possible and, as retailers begin creating a way for their customers to enjoy a single shopping experience across all touchpoints, retailers can begin to think of their inventory as a singular concept.

As retailers continue to gain access to their customers by reaching out to more channels, they should start thinking about how to efficiently manage those channels as one, especially as we see customers switch from channel-to-channel, who always want the most relevant information on hand.

In the end, it's the customers who are going to define how they want to shop, and it's up to the business to converge on everything that affects the customer experience.

More Stories By Marcela De Vivo

Marcela De Vivo is an integrated marketing strategist and expert of 15 years and CEO/founder of Gryffin Media. She enjoys writing on all-things tech, social media, online marketing and the latest trends in all of those industries. Feel free to connect with her on Google+!

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