When it comes to retail shopping, it’s no surprise to hear that the younger, more nimble online channel continues to lure customers away from its in-store older brother. None of us want to wait for a sale, drive around in traffic, park, rummage through disorganized shelves, and then stand in a long checkout line when we can execute the same purchase in five minutes on our phone while taking a bubble bath.
A recent study by Retail Systems Research (RSR) on consumer sentiment confirms online is the favorite son. Using the SAP Social Media Analytics application by NetBase to monitor conversations across 165 million different web sites and major social media hubs, including Twitter and Facebook, RSR and SAP revealed how holiday shoppers felt about online versus in-store shopping. The resulting infographic shows major in-store shopping events like Black Friday still get more attention in the media but the online counterpart, Cyber Monday, clearly wins the hearts of shoppers.
“Shoppers showed mild excitement about Black Friday from a price perspective, but made very negative comments about convenience and what they had to go though in the stores to get those prices,” explains Lori Mitchell-Keller, SVP and Head of the Global Retail Industry Business Unit at SAP during a video interview with Chain Store Age at Retail’s Big Show in New York City. On the other hand, shoppers were lighting up Facebook and Twitter with cheerful comments about online shopping during Cyber Monday. “Cyber Monday had very strong positive sentiment, not only for price but for convenience and overall customer service,” says Mitchell-Keller.
But price and convenience aren’t the only keys to buyer bliss. The RSR SAP report also uncovered another, somewhat unexpected, attribute of online shopping very much appreciated by consumers – it’s more personal. That’s right, online retailers are gathering so much information about their customers that a computer or phone can now give shoppers an individual experience an in-store sales rep can’t match. “In-store sentiment was eight times lower than that of online because online has become more personal,” says Mitchell-Keller. But that’s not how it has to be.
According to Mitchell-Keller, in-store retailers can gain back some love lost by adopting precision retailing – a strategy that inserts the advantages of online shopping into the land of brick-and-mortar. Using advanced software, analytics, and mobile technology, retailers can collect and analyze shopping data about every customer in the store. Then point them to specific products and services, based on their preferences and location, and offer them individual promotions and discounts as they browse. “We like to think of precision retailing as a learning engine working across many different data sources,” notes Mitchell-Keller. A broad set of consumer-buying patterns and demographics information is also factored into the equation to ensure each customer-specific offer is optimized and validated against the latest buying trends. “That real-time offer really locks in the one-to-one shopping experience and makes the shopper feel as if they are online interacting with a retailer that really knows them,” explains Mitchell-Keller.
Imagine how nice it would be if your favorite department store sent a coupon to your phone for 10% off the purchase of any boots as soon as you entered their shoe section – just because you came into the store on a rainy day? Or if you could take a photo of the shoes you are thinking of buying and the store instantly proposed matching clothing and accessories with an additional in-store only discount on the items if purchased together? That’s what online retailers can do – influence shopping behavior at the point of decision – and it works.
Retailers offering both in-store and online channels should also embrace precision retailing to ensure they offer a consistent experience to customers. Without a single face across both channels, retailers will frustrate shoppers, miss sales opportunities, and dilute their brand.
A precision retailer also listens and reacts to feedback from the crowd. Using SAP Social Media Analytics, a retailer can perform its own channel sentiment assessment and determine the appropriate actions to take. Understanding both the positive and negative sentiment will enable a retailer to interact and respond appropriately with their customers in the social space. “The key for retailers is to understand how to use social media to their advantage proactively, not just reacting to the negative sentiment that is out there,” said Mitchell-Keller.
Ultimately, in-store retail will have to put on some big-boy IT pants and get a whole lot more personal if it wants to win back clientele it lost to online. If it does, it will give shoppers an in-store experience the online channel will envy for years to come.