Consumers don’t become loyal on their own. They want to be attracted, surprised, engaged, convinced and appreciated. To find the best value, they look – and shop – around. Growing a brand’s customer base is a difficult task for manufacturers and retailers alike. This has only become more complex with the arrival of a major new influence: digital marketing. Some truly innovative global brands such as Samsung and LEGO are already hot on the trail of digital consumers. But it’s no small challenge to keep up with these empowered customers.

Across the globe, consumers are freely mingling in-store visits, online product research and other information sources before making purchases, large and small. Digital technology really has changed how we communicate, view the world and accomplish everyday tasks. Shopping is clearly one of those tasks. As GfK’s annual Futurebuy Survey shows, almost one in three shoppers worldwide are blending online and in-store shopping on a regular basis nowadays. The trend is upward, given the seemingly unstoppable expansion of the World Wide Web. In fact, the future of shopping is already in full swing. However, the extent of this omnichannel shopping phenomenon still varies. Not only by country, but also by category (fig. 1).

The notion of omnichannel shopping behavior really started in the US, where Amazon inspired Americans to use their site to research products and compare prices. As a result, the US digital shopping markets for consumer electronics and toys are the most developed in the world: online and in-store shopping are combined in these categories by 70% and 66% of Americans respectively. Meanwhile, consumer electronics is the most developed category for omnichannel behavior worldwide, with 46% of shoppers claiming they mix bricks and clicks.

With 44%, apparel ranks second. This is driven by the dramatic growth of digitally savvy specialist players, like H&M, Zara and increasingly Gap. All cater to the mobile native Millennials. For an out of the box example take a look at the adidas NEO concept stores and their interactive mobile billboards driving social networking and truly blending mobile with bricks and mortar.

Where it gets also interesting is in basic FMCG categories. Digital shopping is still in its infancy in Europe and North America. But the omnichannel business is exploding in Asia. One in two Chinese and South Korean shoppers buy packaged food both online and in store thanks to innovative players such as China’s Yiohodian and South Korea’s E-Mart.

Increasing influence of online sales channels – the retail perspective

Retailers and retail experts are fully aware of these new shopping realities. As GfK’s 2013 Retail Trend Monitor shows, they are largely in agreement when it comes to the future of online retail: by 2020, they expect online to account for 26% of global textile sales, for example. A third of technical consumer goods sales will be online, as will 62% of software and entertainment downloads.

Though they feel that competing on price will be less of a retail issue in the future, these specialists see bright prospects for mobile retail concepts, omnichannel sales of former high street retailers and online shops with a strong emphasis on service (fig. 2).

Omnichannel retail strategy: where to go?

On the one hand, there’s no end to the online boom in sight. In fact, the "attack" on stationary retail has only just begun. GfK studies show that e-Commerce is rapidly gaining ground in categories that were previously little affected, such as the furniture trade. At the same time, the online growth curve has plateaued in industries such as clothing, where it is already very high.

On the other hand, there’s still a large opportunity for brick and mortar retailers to win over consumers: 50% of super-connected consumers in 25 key markets worldwide state that experiences are more important than possessions. By designing their stores as social venues while transmitting intensive brand and product experiences, retailers and manufacturers can kill two birds with one stone. They absorb the irritating showrooming trend and they optimize one of their omnichannel retail strategy’s key pillars.

So, let’s look at some global players along with the omnichannel ideas they’ve developed and ultimately, launched – with success, as shown by customers’ feedback.

Consumer electronics – best practice

With 70%, consumer electronics is the category that ranks first in the world in terms of consumers’ shopping activities, both online and in bricks and mortar stores. People go to shops to check out and get a feel for smartphones, tablets and MP3 players. But instead of buying in-store, they look for a better deal online – and often purchase another brand in the end. Too many consumer electronics brands still fail in keeping both existing and potential customers within their brand universe across channels.

Samsung, for example, had to accelerate growth by moving beyond excellent engineering to create an emotional connection with consumers. Their products were outstanding. But the marketing challenge was to move beyond technical features to emotional benefits. They were forced to adjust their brand experience – for each channel. After conducting some market research, they brought the best elements of the Samsung flagship brand stores to their retail customers in Europe and the US. Now, South Korean high-tech store design, for example, can be experienced in the new branded Samsung experience shops in Best Buy and Verizon stores.

Samsung has since taken omnichannel presence to the next level. It made a major commitment to social media. This sent shoppers flocking to its Facebook and Twitter pages and reinforced its message all around. Based on a sensational explosion in click rates and significantly increased sales, Samsung ultimately decided to expand this emotionally enriched omnichannel sales concept to more retailers and more countries as quickly as possible. Just take a look around to experience Samsung’s refreshed brand universe.

Food and beverage – best practice

While the food and beverage category ranks fairly far behind others when it comes to omnichannel purchase behavior, consumers around the globe feel ready to order and buy food, soft drinks and other kinds of FMCGs online – given the opportunity. Younger consumers in particular will lean more and more towards primarily ordering FMCGs online – at home, on the go or even while in stores. Food and beverage retailers can succeed if they expand their mobile, personalized and connected device offerings. Yihaodian in China is a brilliant example of how digital retail can be organized.

Discover how Yihaodian,
one of China’s leading e-commerce websites,
battles bricks and mortar
with invisible super stores

By 2020, online platforms with virtual shelves will have become the status quo for shopping. Like Yihaodian in China, they’ll also offer FMCGs that can be delivered to your door or prepared by the retailer and collected from the store at your convenience.

Toys – best practice

With 43% of consumers buying both online and offline, toys are the third product category confronted with omnichannel shopping behavior. Some time ago, LEGO decided to face this challenge. This evergreen brand began developing its online presence, offering information, kids clubs and, yes, even selling products online through lego.com. At the same time, they wanted to bring their brand and products to life in store in a way that inspires the builders of tomorrow. And their key investors – parents.

In toys, different retail channels align with different purchase occasions. LEGO did the right research and was therefore able to connect the dots and create an occasion-based shopper framework with specific solutions by channel. It showed, for example, that people are most likely to shop for big holiday gifts at big box retailers and small birthday presents at smaller, more local retail formats. The result: a consistently powerful brand image in store, linked to the solutions shoppers need in the right place at the right time.

New shopping experience across channels

At the end of the day, shoppers rarely make conscious decisions for or against any retail format. In most cases, practical considerations dictate the place and time of purchase. Shopping across different channels is just a first step. Digital Natives and Millennials, in particular, will increasingly experience the online and offline worlds as a single unit. Eventually, both will completely overlap.

Whether you are marketing basic FMCG, high-tech, healthcare, durables or luxury products, tomorrow’s omnichannel world is forcing retailers and manufacturers to think differently about the entire shopper marketing mix. The key to winning with this change is to understand that there’s no longer a linear path to purchase. Instead, it’s a complex shopper odyssey that can change at what seems like warp speed. Consumers shop flexibly and quickly, and blend experience points in store, online and everywhere in-between.

It's therefore crucial to convey a unified and coherent brand image across various touch points, while creating new shopping experiences specifically tailored to the different sales channels’ assets. This is what true retail innovation is about.

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The future of shopping is now – and some of the world’s best brands are embracing it

By Alison Chaltas & Joseph Beier
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