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Shopper Loyalty in a post 2.0 World


Physical versus Digital Shopping

According to eMarketer, online sales in 2015 will represent about 6.7 % of total retail sales. This still leaves a vast majority of 93.3 % of sales that will happen in physical stores. However this statistic in isolation is misleading as it doesn’t highlight how pervasive digital is in all aspects of retailing. With everything from research to comparison shopping to social recommendations and even in-store review checking and omni-commerce dominating the shopping experience.

A National Retail Federation survey found more Americans shopped online this weekend (103 million) than in stores (102 million for the first time, a major turning point in shopper habits.) Social media is growing in importance as a destination to research product reviews according to Adobe’s latest Digital index reports. Product reviews themselves are also growing in importance on other considerations such as even pricing, promotional discounts or even assortment variety or choice. This does differ by geographic locations and country preference


To capture loyalty in the next generation of shopping will require a keen understanding of these shifting behaviors mentioned earlier.

The truth is that shopping has morphed into a continuous journey which spans physical and digital realms and the key is the brand loyalty that can be attained. In simpler terms maintaining and growing your market share can summarize the ultimate goal in this digital revolution. Interestingly,  that goal was always in place going back to many prior generations of retailing.

The success of Loyalty programs going forward will most likely be influenced by their tangible value and enjoyment level experienced by the customer. Discounts in and of themselves,  such as recently offered on the black Friday through cyber Monday annual cycle can cause stress as the later in the cycle the more likely the product is going to be out of stock according to Adobe’s Digital Index research. This was a major theme over the recent holiday shopping weekend. The hotter the item in electronics or toys the more likely it was out of stock by mid early cyber Monday. Perhaps this is an opportunity to offer the discount level to loyal valuable customers even if they have gotten to the deal after the product is no longer available. Hint for Amazon Prime !

The recent NRF report outlining a slight dip in gift card purchases could be possibly explained by the wider ease of return processing and shipping for gifts.  The store of the future will also play a key role in loyalty going forward. What if the store could keep track of you measurements over time in these new technology laden changing rooms and send a signal to make sure your size profile is captured during allocation runs. Even more impressive could be a configurator type model as used in the high tech industry to move more to a configured choice. Made to Order suits but at a more reasonable price point could be a new reality if automated measurements were available to tailors in overseas locations. I recently saw the advertising for this approach at the Men’s Warehouse which is trying to offer this higher level of quality and service to its loyal customers. Funnily George Zimmer, with his new zTailor company is also capitalizing on a digital physical hybrid world for the busy consumer.

Here is an interesting report of how 5 different businesses are engaging digitally in this new world.

Interested in learning more about SAP Retail and our Retail customers like the examples shared here? Request a meeting and visit us during NRF 2016.

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