Retail sales for the 2013 holiday season in the U.S. are estimated to be slightly over $600 billion while e-commerce sites are estimated to see about $82 billion. It is interesting that e-commerce is up about 13% from last year, whereas retail was up 3.9%. Measured in gross receipts, e-commerce holiday sales are far less than retail, but it is maintaining more than three times its growth. This trend began several years ago and is likely to continue.
The increasing size of the bite that e-commerce takes from retail reflects a shift in consumer shopping habits. These habits are not likely to wipe out retail sales altogether, because people still want to experience the “touch and feel” that retail stores provide. But it does motivate retailers to think of ways to leverage themselves online and create marketing initiatives to parallel e-commerce online campaigns.
For example, retailers are beginning to see that their in-store customers are using mobile devices to help them shop. While browsing through items in the store, customers are also browsing online – checking out reports and reviews before making their purchases. As counterintuitive as it may seem, this process actually enhances retail sales. A study conducted by Deloitte last year indicates that consumers using smart-phones in-store are 12% more likely to make a purchase than those not using smart phones. Further, it was estimated that this “mobile influence factor” would affect nearly 20% of in-store sales by 2016.
Smart retailers are therefore embracing online marketing initiatives in an effort to enhance customer participation in-store. They are setting up their own mobile apps and websites and marketing their brands online. For example, email campaigns with online coupons have become commonplace for many retailers. Customers can get special discounts by subscribing to online newsletters and downloading coupons with specially marked QR codes that are scanned within the store, providing instant feedback to help evaluate online marketing efforts.
Another example of a retailer’s smart use of an online marketing campaign occurred during my recent Christmas shopping trip to JC Penney. While collecting items to purchase, I was approached by a clerk, and during our conversation, she asked if I had a smart phone. Yes, of course, I said, I have an iPhone. She then asked me to navigate to the JC Penney mobile website and then showed me how to get a QR code for an additional 20% discount. The result? I picked out even more items to purchase. In this case, JC Penney made additional sales that would not have been realized without their mobile website. And in this process, I was able to experience the best of both worlds: the convenience of e-commerce while still able to “touch and feel” the merchandise at a retail store.
Online marketing is not only benefitting e-commerce sites, but normal brick-and-mortar retail stores as well. Retailers who recognize ways to enhance customers’ experience through use of online marketing campaigns will hold their ground against the rising tide of e-commerce popularity. Retailers are developing their own mobile apps to enhance their in-store experience, resulting in additional sales. As an added benefit, retailers are using smart coupons – typically containing QR codes – to help track the success rate of their online marketing efforts.