5 Ways Brands Can Prepare for the New Commerce Landscape Where In-store Sales Still DominateAugust 18, 2020
While the headline of the pandemic has been the explosive growth of ecomm and online grocery sales, there’s growing evidence that in-store sales are heavily influenced by digital. Current estimates provided by eMarketer put total US Retail ecomm sales at less than 20% for all US Retail; meaning over 80% of all retail sales are still happening in-store.
The theory that ecomm sales will continue to grow at such an accelerated pace could potentially be stymied by of all things … digital. When considering current purchase models, you have in-store, ecomm and the ubiquitous online grocery. That is where it gets interesting.
Take online grocery delivery juggernaut Instacart, which experienced 3x growth 1H of 2020 vs. 1H 2019. While the interface is digital, and Instacart is mainly categorized as an online grocery or ecomm channel, it is actually driving in-store sales. When users purchase groceries through Instacart, the sale is attributed by retailers as an in-store sale (vs. ecomm). Similarly, many online grocery partners who offer click-and-collect also attribute those sales to in-store.
Adobe also notes that as retail stores re-open, ecomm sales have been adversely affected, indicating that consumers are fickle and will return to the most convenient/immediate options when given the choice.
Wherever the sale is ultimately made, one thing stays consistent: the impact digital has on both in-store and ecomm sales. It’s important to address both in-store and ecomm needs based on the cross-attribution of these channels. As with any seismic shift in behavior, new approaches and an openness to learn is the gateway to adapting quickly.
When considering how to harness the power of digital for both ecomm and in-store sales, five strategies are particularly advantageous:
- Be where the consumer is — which is everywhere. The consumer journey is not linear; it’s more of a chaotic web across digital and physical, eventually resulting in a decision (usually at the point of purchase). Think of digital as the new storefront spanning retailer websites, search engines and social outlets, circulating brand information and influencing purchases. Consider all touchpoints consumers reference as they decide and ensure your brands are front and center, be it online or at the shelf.
- Sound overwhelming? Lean on experts! Commerce experts can map out and prioritize investments-based proven approaches depending upon how the consumer navigates and ultimately converts. Utilizing a proprietary approach called Retail Response, which uses custom audiences and POS algorithms in-flight, a sampling of GroupM Commerce clients saw an average of 2%-5% in-store sales lift. By tapping into commerce experts, you can minimize waste and make each dollar more actionable and accountable.
- Use qualified data to reach high propensity audiences. Evaluate which data sources are best suited for both in-store and ecomm growth vs. just focusing on one or the other. Further, leverage incentives such as promotions, coupons and sampling, and employ digital tools (such as GroupM’s Trade Boost) that mirror those efforts on a geo-local level.
- Ensure both in-store and ecomm channels can pivot quickly to achieve maximum inventory. Increasingly, a brand’s sales are limited by their ability to meet demand. While that’s a good problem to have, consumers will find alternatives in the short-term if their preferred brand is not available where and when they need it. As digital channels continue to drive demand, plan for omni-channel inventory across in-store and ecomm.
- Measure, measure and measure more. By capturing and analyzing disparate sets of data for both brand sales and marketing, a picture can emerge, informing future patterns and where brands can find opportunities to garner growth. Invest in tools that provide an efficient measuring solution. Recently, GroupM launched Shopbox, a platform that fuses data sets from multiple sources to inform targeting, performance and optimizations in a cohesive and measurable way.
Brands that consistently innovate often do so out of necessity to avoid stagnation or worse — stark declines in sales and loss of share. As the digital ecosystem continues to drive purchase behavior across in-store and ecomm, there is no better time to evaluate strategies and shape opportunities across consumer touchpoints, advanced targeting, inventory management and measurement to best prepare for future growth.