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The commerce world can be fickle, to say the least. In the last year alone, we’ve seen the decline of staple brands including The Gap and J.Crew, while simultaneously the rise of often lesser-praised brands including American Eagle and Wal-Mart.
The secret to success for these on-the-rise retailers, though, isn’t unknown. For customer loyalty, provide higher quality merchandise more in-line with consumers wants, improved shipping capabilities which often mean the option for in-store pick up and a strong omni-channel presence, with both brick-and-mortar and online stores having a cohesive, convenient and complementary look and feel. Brands slow to pivot their strategies to the above table stakes see a decline in revenue and also stock, as Wall Street losses faith in their ability to foresee what are now obvious changes in consumer browsing and purchasing preferences.
With such staple brands experiencing never-before-seen financial declines, market outlook for the second half of this quarter has been bleak. Back-to-school forecasts showed a decline in consumer purchasing. And yet, as each quarter, season and shopping trends comes to pass — we’re seeing that it isn’t that consumers aren’t willing to buy, it’s instead that they are much more picky about from which brands they do so.
Consider this: in this year’s Q2, overall retail sales rose only . When it comes to the ecommerce portion of that revenue, 7.2% of the estimated $1,1771.5 billion in U.S. retail sales transactions occurred online, up from 7% in the first quarter of 2015 and 6.3% a year ago. Overall, the Commerce Department estimates U.S. retail ecommerce sales came in at $78.8 billion, up 5.1% from Q1 and 14.4% year-over-year.
Ecommerce sales are heavily on the rise, continuously gaining an edge in the overall retail space spend. This can likely be attributed to a rise in mobile shopping — or at least a rise in mobile browsing. Google has released numbers showing search phrases for back-to-school are up 12% year-over-year, with more than 50% of those coming from mobile — a 25% increase from last year.
Beyond just search traffic — which studies are finding contribute heavily to both digital and physical purchases — mobile commerce now accounts for almost 30% of total ecommerce sales in the U.S. Indeed, U.S. mobile commerce sales are projected at $104.1 billion, 38.7% more than the $75 billion tallied in 2014, and are expected to grow twice as fast as general ecommerce sales. And this trend isn’t simply contained within the U.S. Mobile commerce is growing faster in Latin America, Europe and especially Asia, where many retailers’ sales grew 249.3% year-over-year.
“Mobile apps that help streamline shopper interactions and offer customers enhanced features are the key to tapping booming m-commerce sales,” wrote Ian Murphy for Retail Dive. “The 180 top retailers that offer apps reported that sales resulting from those apps grew 44% in 2015, while overall mobile sales are projected to grow by 15% — still more than twice as fast as overall ecommerce.”
But, to truly succeed in the omni-channel commerce environment, your brand needs more than just an app. A study released this week by Synchrony Financial found that the in-store experience is just as crucial to a sale as a mobile app.
The study explored attitudes about shopping and spending habits, and the path to making major purchases across 13 categories: appliances; automotive service, tires and products; electronics; eyewear; fine jewelry; flooring; home improvement; furnishings; bedding and mattresses; lawn and garden; musical instruments; sewing; and sports and fitness equipment. The major findings were as follows:
- The major purchase journey is getting shorter, with shoppers spending an average of 68 days researching a product (down from 80 in 2014).
- Digital tools continue to be an important part of the research process , empowering shoppers to navigate information and narrow options. Online purchasing of larger ticket items remained stable at 13% year-over-year, with the exception of consumer electronics.
- The in-store experience matters more than ever, with 73% conducting research during their visit and 87% of respondents purchasing in person. Sixty-four percent of all shoppers surveyed said in-store visits had a greater influence on their purchasing decision than online research.
In all, consumers are no longer simply expecting a true omnichannel shopping experience, but they are actively becoming omnichannel shoppers themselves. Mobile apps and online search helps to narrow options, while local stores serve as a means to finalize a purchase — often an item the shopper had already spotted online. To look at this trend in context of at least one online comparison or browsing application, more than two-thirds of Pinterest users have looked up pins via mobile phones in-store. Almost half of those were looking up their wish lists for inspiration, and 36% actually went on to buy an item.
As SMBs gear up for the rapidly approaching holiday season, it is essential to keep in mind that success will be driven by a fully functional multi- or omnichannel strategy — with brick-and-mortar and mobile app experiences being key conversion drivers.
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