Local stores: The most important channel in an omnichannel universe?
Wherever you go, there you are. And while the Internet is usually there with you, it still can’t offer the immediacy of a physical store.
Online commerce is a huge part of the retail economy, but physical stores are still essential channels — despite all the chatter of same-day and one-hour delivery, consumers still use them to get what they need, exactly when they need it.
Brick-and-mortar retailers also offer consumers the opportunity to see, feel and try on products before deciding to part with their hard-earned cash. That’s why local still commands considerable power, and why many e-commerce businesses like Warby Parker and Birchbox — having successfully conquered online selling — are looking to the real world for growth.
Mobile consumers seek out stores
E-commerce efforts and in-store purchases are closely related, according to Google. Half (50%) of mobile consumers are most likely to visit a store after performing a local shopping search, and they are ready to buy during that visit, with some 18% of mobile-based, local searches resulting in an in-store purchase within one day.
Additional findings from Deloitte indicate that digital technologies influenced about 36% of in-store retail purchases in 2013, and the firm expected that figure to grow to 50% in 2014. “Digital is fundamental to the entire business and the entire shopping experience, in and out of the store,” the report says.
And according to xAd/Telmetrics’ 2014 Mobile Path to Purchase Study, more than half of consumers (52%) reported visiting a physical store after conducting a mobile search, and 64% completed the purchase in question offline.
“We see consumers turning to mobile as a necessary part of their purchase decisions,” said Monica Ho, senior vice president of marketing for xAd. “With mobile consumers looking to make decisions quickly and locally, mobile is also serving as a tool to drive in-store activity.”
Part of the allure of local is mobile propelling people to operate on a need-it-now basis. “We live in an on-demand culture, conditioned by the mobile device to get whatever we want, whenever we want it,” said Michael Boland, chief analyst and vice president of content for BIA/Kelsey in a release.
Local not just another channel
Local is arguably the most important channel in the omnichannel universe. That fact is not lost upon popular online retailers such as Warby Parker and Bonobos, which now maintain permanent locations in the real world.
Amazon is going omnichannel from a position high in the cloud, looking for ways to bring convenience, selection, and price to a hyperlocal level. In addition its forays into same-day and one-hour deliveries, the company has opened offline pop-up stores during the holidays and expanded Amazon Home Services to almost 30 major metro areas.
“It might be impossible for Amazon and others to simulate the immersiveness of the local market, but they can improve the efficiency of delivery,” Manish Chandra, founder of the locally-focused e-commerce retail clothing exchange Poshmark, told StreetFight. “That last mile is critical.”
An established edge
In India, many marketers are finding they can’t sell successfully without embracing the hyperlocal corner stores people have relied upon for decades. Home-grown e-tailers such as Reliance Retail and Big Bazaar have partnered with the kiranas, which control 74% of the retail market, and Amazon India relies upon more than 500 stores for fulfillment in 28 cities.
Back in the States, online diamond vendor Ritani has launched “clicks-and-mortar” partnerships with local jewelry stores, offering customers a way to design engagement and wedding rings online and try them on at a trusted local jeweler.
“We’re being exposed to a tremendous amount of clients that I don’t believe are as comfortable shopping in person as on the Web,” Mark Fink, owner of the regional Fink’s Jewelers chain, told Yahoo Business. “Going on their Android or iPad or laptop is a more comfortable way to do research and shop. But when they see they can go to a trusted, quality jeweler or gemologist, it legitimizes their purchase.”
‘Webrooming’ levels the field
Showrooming — the strategy of looking at items in-store before buying them online — is still widespread when shopping for electronics and other high-ticket items. But like in the Ritani example, researching products via digital channels and then visiting a physical store to buy, or “webrooming,” is becoming just as prevalent.
Especially during the holiday season, the need for immediacy and onsite, in-person assessments of quality and fit favor brick-and-mortar stores. Increased taxes and shipping costs may help speed the webrooming trend by cutting into any perceived pricing edge on the part of Web retailers.
“Look for showrooming’s effect to decrease in coming years as ‘webrooming’ increases,” P.K. Kannan, a professor of marketing science at the University of Maryland, wrote in a news release. “The pendulum is swinging back, at least for now, to the offline retailers.”