The advent of digital channels has introduced a new shopper to the retail marketplace: the omnichannel consumer, defined as a shopper who buys across both digital and physical channels. For both retailers and landlords, understanding how and why the omnichannel consumer prefers to shop across channels is key to developing effective sales and real estate strategies. Though the arrival of the omnichannel consumer poses certain challenges to traditional retailing models, this new shopper also introduces opportunities for revenue growth.
Accustomed to the speed and convenience offered by the internet, omnichannel consumers have raised expectations for retailers regarding everything from customer engagement and experience to price and product options. Omnichannel consumers have especially high expectations when it comes to receiving goods purchased online: According to a recent UPS study, 64% of online shoppers expect orders placed by 5 p.m. to qualify for next-day shipping or delivery and 61% expect orders placed by noon to qualify for same-day shipping or delivery.1 The good news for retailers is that consumers are increasingly willing to pay for these high expectations; 75% of shoppers in the same survey said they are willing to pay a premium for expedited shipping.
Omnichannel shoppers may be high-maintenance, but they reward retailers with higher spending. A study by the Harvard Business Review found that omnichannel shoppers spend 4% more on in-store purchases and 10% more online than their single-channel counterparts. The study also found that omnichannel customers spent more for each channel they engaged with; customers using four or more channels spent 9% more in stores than those only shopping in the store.
Many argue that access to product research and information online helps drive sales among omnichannel consumers. The Harvard study found that conducting research online correlated to a 13% higher level of in-store spending.
More brand loyalty
Alongside higher spending, omnichannel customers have also proven more loyal to the brands and retailers with which they engage. Omnichannel customers reportedly make 23% more repeat shopping trips to a store within six months of an omnichannel experience. They are also more likely to recommend a brand to friends and family when compared to single-channel shoppers. These results suggest that engaging with consumers across multiple platforms is an important key to not only generating new customers but to retaining them.
Still value the store
Though most discussion of omnichannel shopping focuses on digital channels, the store remains a key venue for omnichannel shoppers. More than 90% of total retail sales still occur in the store, and consumers continue to use the store for research even when making purchases online. Interestingly, many consumers prefer returning items to physical stores rather than shipping them. According to the UPS study, 58% of respondents prefer returning an item to a physical store compared to 42% who prefer to ship back to the retailer. Retailers should focus on leveraging the store for returns, as the same study found that 66% of those who returned an item to the store made a new purchase while there.
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1 “2017 UPS Pulse of the Online Shopper” report, 2017.