the relevance of retail stores in an omni-channel world

The Relevance of Brick-&-Mortar Stores in an Omni-Channel World

Why do shoppers prefer visiting stores and what can retailers do to better serve the omni-channel customer?

• Overall in 2014 44% of US shoppers across 15 major categories were omni-channel shoppers - up from 37% in 2013.

• More than half of all US shopper’s in consumer electronics (65%), apparel(64%), and toys (63%) are omni-channel shoppers.

• The share of omni-channel shoppers in the home improvement category increased from 38% in 2013 to 57% in 2014- a growth of 50%. In the auto category, the figure increased from 43% in 2013 to 57% in 2014 - a growth of 33%.

• 53% of consumers bought products on their PC or tablet in 2014 compared to 26% who bought products on their smartphones.

• 13% of consumers are now buying products straight from social networking sites like Facebook and Twitter while 10% are buying through a link on online articles and magazines.

• 34% of consumers who bought products in stores had it delivered home. • Click-and-collect was opted by 31% of consumers. • 53% of consumers said that their preferred mode of purchase was to visit a store and leave with

the products themselves. • 58% of consumers prefer shopping in a store before they can ‘see and feel’ the product before

buying. • 53% of consumers prefer the in-store experience because they ‘get products sooner’. • 44% of consumers prefer visiting stores because they can discover and purchase unrelated items

during the same visit.

Key Findings

• 61% of consumers pick online channels of purchase to save money. • 53% of consumers prefer buying online because it is ‘easier’ • 46% of shoppers perceive the selection to be better online. • Consumers also prefer store over online channels because they have fallen into the habit of

visiting stores for certain products (39%) and feel more assured about a hassle-free return procedure should they need to (35%).

• 48% of consumers are happy to buy a product directly from the brand instead of visiting a retailer.

• 60% of these consumers won’t buy the brand unless they see it in a brick-&-mortar store first. • The share of showrooming shoppers in the US increased from 22% in 2012 to 37% in 2013 but

dropped to 28% in 2014. • 41% of US shoppers reported they engaged in webrooming in 2014. • 72% of US consumers said they felt more in control than before when shopping. • 62% of consumers are now less loyal to retailers and 60% are less loyal to brands than before due

to information obtained from online research. • 52% of consumers say they are loyal to a brand or retailer that gives them relevant and helpful

input on what to buy. • 87% of shoppers seek information before visiting a store and 79% seek information while in a

store. • 35% of shoppers sought more information after having visited a retail outlet.

Key Findings

• 69% of US shoppers visited a retail store for information during different stages of the consumer journey.

• 32% of consumers visited a retail store in the discovery oriented Awareness stage of the journey. • 33% of consumers visited a retail store during the Influence stage of the journey. • 55% of consumers visited a retail store during the Purchase stage of the journey. • 14% of consumers return to the store post-purchase either to return products or for help with

using them. • 43% of shoppers reported feeling frustrated after failing to find product related information

during a store visit. • 41% of shoppers who failed to find relevant information during a store visit said they were likely

to shop elsewhere. 22% said they were less likely to buy from the retailer. • 53% of consumers want mobile apps to provide accurate information about the location and

availability of products in the store. • 34% of consumers want apps to provide suggestions about additional products they might like. • 75% of shoppers use a search engine to look up products and information even before heading

out for a store visit. • 71% of consumers search for information on online-only retailer websites/apps and 70% look up

websites/apps for retailers with physical stores. • 75% of shoppers want price related information in nearby stores while 74% want to know if the

item is in stock at a nearby store. • 66% of consumers seek location of nearest store, 63% look for opening hours, and 59% want a

map that shows stores with the product in stock.

Key Findings

• 56% of consumers also want complimentary information on other products available across different stores to help them decide which store to visit.

• 68% of consumers who visited a retail store said they expected the sales associate to be an expert on the products offered in-store while 45% expected them to be an expert in products offered both online and in-store.

• Consumers are less likely to expect the sales assistant to be actively using the product (23%) or have knowledge of their past purchase behavior (14%).

• 69% of consumers expect store assistants to have a mobile device to help them out. • 50% of consumers who visit a store expect store personnel to look up product information on

their mobile devices. • Shoppers also expect that when products are not in the shelf, retail staff would use their mobile

device to check inventory in the store (43%) as well as at a nearby store (44%). • 40% of consumers also expect store personnel to provide information regarding return policies

and warranties. • 73% of consumers are likely or very likely to visit a store if the product is marked as available. • 71% of consumers are not likely to visit a store if the product is marked as out-of-stock. • 74% of shoppers are likely to opt for the buy-and-deliver-product option if it’s free but only 30%

are likely to opt for it if they have to pay. • 62% of consumers are likely to visit and buy from another retailer’s store in the event the product

is out-of-stock. • 53% of consumers are likely to buy it online once they reach home from a different retailer.

Key Findings


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44%

65%

64%

63%

58%

57%

57%

54%

49%

39%

35%

29%

27%

22%

21%

20%

37%

60%

61%

57%

57%

43%

38%

52%

31%

26%

15%

15%

14%2013 2014

Source: GfK FutureBuy, September 2014

US omni-channel shopper growth by category, 2013 vs 2014% US shoppers reporting omni-channel shopping by category purchased

Meals at restaurants

Cleaning products

Food and beverage

OTC medication

Lawn & garden

Healthcare services

Beauty & personal

Financial services

Mobile devices

Home improvement

Auto

Home appliances

Toys

Apparel

Consumer electronics

Overall US market

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Source: Oracle, 2014

Global consumer shopping behavior by mode of purchase % global shoppers who bought a product by given mode of purchase

10%13%

26%

31%34%

53%

Buying on my PC/tablet

Buy in store and delivered to home

Click and collect Buy on my smartphone

Buy on a social networking site

Buy through a link on online article or

magazine





Global consumer shopping preference by mode of purchase % global shoppers

4%4%5%

35%

53%

Buy goods in-store and take goods home

Buy goods online and have them delivered

home

Buy goods online and have them delivered to

office or a locker

Buy goods online and pick u at a store later

Buy goods in a store and have them delivered home





US shopper preference for brick-&-mortar vs online by drivers% US shoppers who prefer given channel for each driver

See and feel before buying

Get products sooner

Can buy related things together

Routinely shop there already

Hassle free returns 10%

21%

23%

16%

9%

35%

39%

44%

53%

58%

Bricks-&-mortar Online

Save money

Easier

Better selection

Faster

Better information27%

44%

46%

53%

61%

16%

29%

16%

24%

28%





The growing influence of brand on purchase decisions% global shoppers

19%

33%

48%

Yes I’m happy to buy directly from a brand

No Iike to choose products from range

of brands

Yes, if the brand offers add-on services like

personalization

40%

60%

Need to see brand in a store before making

purchase

Would buy brand without seeing it

in a store





Trends in showrooming vs webrooming among US shoppers% US shoppers

28%

37%

22%

2012 2013 2014

Webrooming 41%

Share of showrooming consumers Share of webrooming consumers





Impact of online research on loyalty to brands & retailers% US shoppers

52%

60%

62%

72%Feel more in control than

ever before when shopping

Now less loyal to any one retailer than before

Now less loyal to any one brand than before

More loyal to brand/retailer that gave me input on what to buy




Source: Google, October 2014

US shoppers looking for information by store visit state% US shoppers who looked up information

87% 79% 35%

Before visiting a store

While visiting a store

After visiting a store





US shoppers visiting stores for info by consumer journey stage% US shoppers who visited store to look up information by consumer journey stage

AwarenessStage

of consumers used physical stores for information during different phases of the purchase process69%

32% 33% 55% 14%

InfluenceStage

PurchaseStage

Post-PurchaseStage





US shoppers reaction to lack of information during store visit% US shoppers who failed to find required information during a store visit

shoppers who tried to find information within a store say they didn’t find all the information they needed2 in 3

43%41%22%

were left frustrated

were more likely to shop elsewhere

were less likely to buy from the retailer





US shopper demands from retailer mobile apps% US shoppers

17%

19%

21%

25%

34%

52%Accurate information about

location and availability of product

Suggestions about additional products I might like

Information on click and collect facility

Ability to browse for product preview and information

In-store payment without going to cash counter

Ability to detect and connect with in-store wifi





Online sources used to conduct pre-purchase research% US shoppers who conducted pre-purchase research

35%

36%

39%

70%

71%

75%Search engines

Online-only retailer websites/apps

Websites/apps for retailers with physical stores

Social networking websites and apps

Online video website/apps

Coupon or daily deal website/apps





Top info sought by US shoppers during pre-purchase research% US shoppers who conducted pre-purchase research

75%

74%

66%

Price of item at a nearby store

Availability of item in nearby store

Location of closest store with item

63%

59%

56%

Opening hours of closest retail stores

A map showing stores with item

Complimentary products available




Source: Forrester + Accenture + hybris, January 2014

Shopper expectation from retail staff during store visits% US shoppers who visited a retail store

8%

14%

23%

45%

68%Be an expert on the products

offered in store

Be an expert on the products offered in store and online

Actively use the products offered

Be knowledgeable about my preferences and past purchases

None of the above





Customer expectations on mobile use among retail staff% US shoppers who visited a retail store

31% 69%

I expect sales associate to have a mobile deviceI do not expect sales associate to have a mobile device

8%

15%

24%

33%

40%

43%

44%

50%Look up product information

Look up inventory at a nearby store

Check additional store inventory

Provide info on return & warranties

Reserve products to pick up at nearby store

Perform a checkout for me

Look up social mentions and product reviews

Look up past purchases and make suggestions





Impact of inventory information on shopper store visits% US shoppers who look up information before a store visit

14%

19%

19%

43%

12%

19%

26%

32%

13%

22%

28%

16%

15%

16%

16%

4%

44%

25%

11%

4%

Very Unlikely Unlikely Neutral Likely Very Likely

Inventory is marked as available in-store

Inventory is marked as low availability in-store

In-store inventory is not available online

Inventory is marked as not available or out-of-stock





Impact of out-of-stock inventory on shopper conversion% US shoppers who faced out-of-stock issues during store visits

13%

12%

14%

22%

22%

22%

24%

28%

45%

18%

18%

19%

24%

27%

33%

34%

36%

29%

19%

19%

19%

24%

35%

29%

28%

24%

16%

14%

20%

14%

12%

9%

8%

7%

7%

5%

36%

30%

34%

19%

6%

7%

7%

4%

4%

Very Unlikely Unlikely Neutral Likely Very Likely

Buy in-store and deliver product home for free

Visit and buy from another retailer’s physical store

Buy online from home from same retailer

Buy online from home from difference retailer

Hold off on buying the product

Buy in store and pick up from another store by some retailerBuy on mobile device while in

store from same retailerBuy in-store and deliver product

home for a feeBuy on mobile device while in

store from different retailer





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the relevance of retail stores in an omni-channel world

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