Written By: Antoinette Alexander
Marketers’ increased use of a digital coupon platform, combined with text message promotions have made it easy for consumers to engage with retailers via their mobile phones and desktop computers. Along with text message promotions, mobile coupon marketing programs are fast becoming a key component of retailers’ marketing mix.
The Internet and mobile have transformed consumer shopping behaviors, but the in-store shopping still remains important to many consumers, especially when buying cosmetics, apparel, grocery and office supplies, according to a new study from global management consulting firm A.T. Kearney. It is important, however, that retailers strategically assess and recast the role of stores.
The study, titled “Recasting the Retail Store in Today’s Omnichannel World,” surveyed more than 3,000 consumers in the United States and U.K. to understand how and why consumers use different channels at each stage of the shopping process.
“Stores are important to consumers, but it is critical that retailers with brick-and-mortar assets understand the new role the store network plays in optimizing sales, profits and loyalty across all channels. Despite the dramatic shifts in consumer shopping behaviors enabled by ecommerce and mobile, very few retailers have transformed the physical shopping experience to efficiently and effectively support the new behaviors. Retailers must know how and why their customers shop and then retool and redeploy the store network accordingly,” stated Michael Brown, A.T. Kearney partner and study author.
The study found that consumers spend the majority of their time shopping in stores (61%), followed by online (31%), catalog (4%) and mobile (4%). The physical store is the channel of choice across all ages (from Millennial to senior citizens) and household income levels (from less than $25,000 per year to more than $100,000 per year).
The survey results clearly point out that having physical stores is more important in some categories than others. Amazon and other online retailers have a lock on books, CDs, movies, etc., but the study found that cosmetics, apparel, grocery and office suppliers are sectors where brick-and-mortar outlets are still imperative.
Consumers shop in different stages, beginning with research, followed by testing, purchase, pick-up or delivery and after-sales experience. Digital channels play the largest role in the research phase of the process, as shoppers read online reviews and find recommendations through social media. While stores can and should play some role in all shopping stages, the study suggests that they needn’t play a central role in each to generate sales across channels. This has prompted retailers to use promption text messages, and the use of a digital coupon platform to send SMS coupons, to capture consumers early in the process.
The study pegs the significance of brick-and-mortar across multiple product categories, and recommends that retailers strategically assess and recast the role of stores along the following five dimensions — discovery, entertainment, relationship, transaction and fulfillment.
“Regardless of where a product is purchased — via online or mobile channels — the product can be tested, picked up or returned to the store. Here again is an opportunity to capitalize on impulse purchases during these customer visits. Operationally, shipping or pickup from stores expedites delivery and optimizes inventory across the store network, which does much to improve efficiency and cost savings,” added Dan Farmer, A.T. Kearney principal and co-author of the study.
The results of the consumer study show that while there is some variation in the role of the store by category (less for books, more for grocery and home improvement), the study results indicate that stores can and should play key roles for customer engagement across every product category.
The study found that 40% of consumers spend more money than they had planned in stores, while only 25%reported online impulse shopping.
Researchers suggest that mobile marketing strategies, such as text message promotions and using a digital coupon platform can drive consumers to stores whether it is to shop or pick up a product purchased online will drive impulse purchases.
The paper provides four strategies to ensure that retailers’ stores and store networks remain at the heart of the customer relationship. According to the study, retailers need to innovate to create new formats, optimize locations based on new shopping behaviors, integrate operations across channels to create a channel-less operating model and redefine a new set of customer-centric performance metrics to break down channel barriers that inhibit peak performance.
Here is another research study, this one on mobile coupon marketing and consumers’ preferences to receive mobile coupons.