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RAPAPORT... Business consultants at A.T. Kearney concluded that even though consumers expect to shop across multiple channels, retailers that fail to position their physical store at the center of the customer relationship are at a disadvantage. According to a new study, “Recasting the Retail Store in Today’s Omnichannel World,” A.T. Kearney surveyed more than 3,000 consumers in the U.S. and U.K. to understand how and why consumers use different channels at each stage of the shopping process. Survey results led the group to recommend retailers strategically deploy their brick-and-mortar asset(s) and integrate with their other channels to drive increased customer traffic, brand loyalty and improved performance.
Michael Brown, A.T. Kearney's partner and study author, said, “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.”
The study found that 61 percent of consumers spent the majority of their time shopping in stores, 31 percent shopped online, 4 percent bought through catalogs and 4 percent shopped via mobile device. The physical store was the leading channel of choice across all demographics.
A.T. Kearny stated that consumers shop in different stages, beginning with research, followed by testing, purchase, pick-up or delivery and then an after-sales experience. While stores can and should play some role in all shopping stages, they needn’t play a central role in each to generate sales across channels, according to the group. Retailers should strategically assess and recast the role of stores along the following five dimensions: Discovery, entertainment, relationship, transaction and fulfillment.
Dan Farmer, A.T. Kearney's principal and co-author of the study, said, “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.”
The study found that 40 percent of consumers spend more money than they had planned in stores, while only 25 percent reported online impulse shopping. Strategies that drive consumers to stores -- whether it is to shop or pick up a product purchased online -- will drive impulse purchases, according to A.T. Kearney.
Retailers need to innovate to create new formats, optimize locations based upon 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.
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