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Riding the digital wave!


New age technology and availability of information anytime anywhere is revolutionizing the way India is shopping. The advent of digital has not only enabled shopping online, but is also influencing in-store retail purchases. Shoppers today are significantly influenced by digital throughout the shopping journey. However, there is considerable gap between the expectations of these consumers and digital maturity of retailers.

Deloitte India’s report on ‘Navigating the New Digital Divide’ highlights this digital divide and the influence of digital on consumers shopping in-store. INR 60,000 Cr., about 21% of the in-store organized retail market is said to be influenced by digital. Web-enabled mobile devices, including smartphones seem to be the device of choice for shoppers.

Digital influence seems to be significantly increasing in-store conversion. In fact, conversion rate of shoppers who use a digital touch-point is at least 40% higher than non-digitally influenced shoppers. Over 65% shoppers also spend more as a result of using digital.

Impact of digital usage on conversion of shoppers

Consumers seem to be using digital throughout their shopping journey and not just prior to making a purchase. Digitally influenced shoppers browse retailers’/ other ecommerce sites and apps while in the store and also use social media to gain validation from personal networks post their purchase. While 71% of shoppers use digital before entering a store, almost 50% of shoppers use digital means while shopping in-store as well. They use digital not only to research for/ select a product but also for price comparison, product review, etc.

Deloitte findings indicate that digitally influenced shoppers no longer want to interact with store associates for their shopping needs. The report identifies over 70% of shoppers preferring to use either a kiosk or their own digital device for activities such as getting product information, checking availability, comparing pricing and checking loyalty program status. This implies that role of store associates will also need to evolve from being mere transactional to more advisory in nature.

Shoppers also seem to be looking for greater flexibility in purchase as well as delivery of products. While consumers purchase and receive delivery at home in the e-commerce model, many consumers today are also looking at buying online and picking up in store (BOPUS), buying in-store and receiving delivery at home/ office or another store location. Such shopping preferences provide the organized brick & mortar retailers with an inherent edge over e-commerce players. Retailers can take advantage of their existing infrastructure and penetration to service consumers in line with their preferences.

Digitally influenced consumers and their changing shopping preferences not only warrant building digital assets and other standalone capabilities, but also requires a retailer to ensure seamless integration of all consumer facing touch points. Pure-play traditional retail or a multi-channel presence will no longer be sufficient to increase store walk-ins.

Retailers need to provide an Omnichannel experience to add value to these digitally influenced shoppers.

So how can retailers evolve from pure-play traditional formats and ride the digital wave.

Retailers are required to set up a meaningful digital and mobile presence which integrates seamlessly with its physical infrastructure. They also need to understand that there is no standardized approach to Omnichannel retailing and that each one of them will need to understand their shoppers’ preference, identify their positioning, define objectives/ initiatives and then build a digital roadmap.

Retailers will need to take a re-look at their operations i.e. supply chain, IT systems, store operations, human resources etc. in order to achieve seamless integration of physical and digital assets and operate in a focused manner.

The role of the physical store, as we know it, will undergo significant change. Retailers will need to invest in in-store technology to enhance buying experience and use personal interaction/ advice and other value added services at stores as an edge over pure play e-commerce players. Retailers will also need to invest in training their store associates to prepare them for the Omnichannel journey that lies ahead.

Retailers need to understand the new role of marketing and provide information/ reviews/ recommendations/ discounts online in order to leverage changing shopper behaviour. They also need to have a strong digital presence not only through transactional websites but also need to facilitate in-store digital usage and create a responsive social media presence.

Retailers will also need to invest in advanced analytics and IT tools to measure the success of digital through consumer behaviour analysis and adapt as per the results.

As is clear from above, digital is not a choice anymore, but a business imperative for retailers. Retailers need to rid themselves of the tendency to wrongly look at investment that they allocate to digital basis solely the ‘digital channel revenue lens’. In addition, they need to factor the big influence digital is having on in-store sales. A well-articulated digital strategy and well-crafted digital implementation can help a retailer grow both online and in-store revenues disproportionately at the expense of other retailers. As such, it is imperative for a retailer to evolve to this new way of life in order to align with and best reap the benefits from changing shopper behaviour.

Note: For more details, refer to Deloitte India’s report on ‘Navigating the New Digital Divide’ (http://www2.deloitte.com/in/en/pages/strategy/articles/navigating-the-new-digital-divide.html)