navigating the new digital divide

Navigating the New Digital Divide $2,200,000,000,000 DIGITAL AND MOBILE INFLUENCE ON IN-STORE SALES DIGITAL & SOCIAL MEDIA USAGE RESULT IN HIGHER CONVERSION & SPEND THE CONSUMER’S SHOPPING JOURNEY IS INCREASINGLY SELF-DIRECTED in brick and mortar retail sales will be influenced by digital by the end of 2015, or 64 percent of all in-store sales. Capitalizing on digital influence in retail www.deloitte.com/us/RetailDigitalDivide @DeloitteCB Follow #RetailDigitalDivide 70% 67% of consumers are leading their own shopping journey of consumers read product reviews during their path to in-store purchase For the third year, Deloitte studied over 3,000 U.S. consumers in late 2014- early 2015 to understand how their digital interactions are influencing in-store U.S. retail purchases. Many retailers are dramatically underestimating the influence of digital and are caught in a divide where they are making digital investments that primarily support their eCommerce business rather than their brick-and-mortar business. This year, the data clearly shows that digital influence continues to accelerate and shift the ground under the feet of retailers large and small alike. RETAIL CATEGORIES MOST AND LEAST INFLUENCED BY DIGITAL 0 10% 20% 30% 40% 50% 60% 70% Electronics Home Furnishings Automotive Entertainment Baby/Toddler Apparel Health/Wellness Misc. Supplies Food/Beverage 62% 58% 47% 39% 36% 39% 47% 59% 55% 55% 52% 49% 39% 35% 31% 2013 Metric 2014 Metric 35% 29% 38% 45% of consumers say digital makes shopping in-store easier Consumers that use digital when shopping in-store convert at a 20% higher rate than those not using digital Consumers who use social media during their shopping process are ~4X more likely than non-users to spend more or significantly more on purchases Shoppers are 29% more likely to make a purchase the same day when they use social media to help shop either before or during their trip DOLLAR IMPACT COMPARISON BETWEEN DIGITALLY - & MOBILE - INFLUENCED SALES AND ECOMMERCE IN THE U.S., 2014 1 1Channel sales calculated using U.S. Census Bureau Quarterly Retail E-Commerce Sales, 4th Quarter 2014; excluding gas stations and non store retailers from physical store sales due to scope of survey. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulation of public accounting. Nearly one-in-three shoppers say they spend more when they use digital as part of their shopping process. 2012 2013 $ 0.59T $ 0.97T $ 0.33T $ 1.10T $ 1.70T Mobile Digital 2014 2012 2013 2014 $ 0.16T 5% 19% 28% 14% 36% 49% In a world where nearly everyone is always online, there is no offline. So it is not about the digital business, it is just business. (becoming aware of products through means outside of retailer or brand advertisements) Total Retail Sales Digitally-influenced In-store Sales Mobile-influenced In-store Sales eCommerce Sales $ 1.70T $ 3.70T $ 0.97T $ 0.30T

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Navigating the New Digital Divide

$2,200,000,000,000DIGITAL AND MOBILE INFLUENCE ON IN-STORE SALES DIGITAL & SOCIAL MEDIA USAGE RESULT IN HIGHER CONVERSION & SPEND

THE CONSUMER’S SHOPPING JOURNEY IS INCREASINGLY SELF-DIRECTED

in brick and mortar retail sales will be influenced by digitalby the end of 2015, or 64 percent of all in-store sales.

Capitalizing on digital influence in retail www.deloitte.com/us/RetailDigitalDivide@DeloitteCB

Follow #RetailDigitalDivide

70% 67%of consumers areleading their ownshopping journey

of consumers read product reviews during their path to in-store purchase

For the third year, Deloitte studied over 3,000 U.S. consumers in late 2014- early 2015 to understand how their digital interactions are influencing in-store U.S. retail purchases. Many retailers are dramatically underestimating the influence of digital and are caught in a divide where they are making digital investments that primarily support their eCommerce business rather than their brick-and-mortar business. This year, the data clearly shows that digital influence continues to accelerate and shift the ground under the feet of retailers large and small alike.

RETAIL CATEGORIES MOST AND LEAST INFLUENCED BY DIGITAL

0 10% 20% 30% 40% 50% 60% 70%

Electronics

Home Furnishings

Automotive

Entertainment

Baby/Toddler

Apparel

Health/Wellness

Misc. Supplies

Food/Beverage

62%58%

47%

39%

36%

39%

47%

59%

55%

52%

49%

39%35%

31%

2013 Metric

2014 Metric

35%

29%

38%

45% of consumers say digital makes shopping in-store easier

Consumers that use digital when shopping in-store convert at a 20% higher rate than those not using digital

Consumers who use social media during their shopping process are ~4X more likely than non-users to spend more orsignificantly moreon purchases

Shoppers are 29% more likely to make a purchase the same day when they use social media to help shop either before or during their trip

DOLLAR IMPACT COMPARISON BETWEEN DIGITALLY - & MOBILE -INFLUENCED SALES AND ECOMMERCE IN THE U.S., 20141

1Channel sales calculated using U.S. Census Bureau Quarterly Retail E-Commerce Sales, 4th Quarter 2014; excluding gas stations and non store retailers from physical store sales due to scope of survey. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulation of public accounting.

Nearlyone-in-threeshoppers say

they spend more when they use

digital as part of their shopping

process.

2012 2013

$ 0.59T $ 0.97T$ 0.33T $ 1.10T $ 1.70T

Mob

ile

Dig

ital

20142012 2013 2014

$ 0.16T