8/29/2011 05:00:00 PM
Online retail sales currently represent 9% of all retail sales, are predicted to represent 11% of all retail sales in the US by 2014, and are up from 8% in 2009.* Overall retail sales in Q4 2010 were up 3% but online sales were up 13.5% and we expect online sales growth to be even larger this holiday season.*
The role of the internet will continue to grow for consumers and retailers, as consumers continue to understand the value of finding information about their purchases online.
Consumers make purchase decisions based on brands and experiences. For consumers, a website is the portal to the brand. How (device) and where (location) the brand is accessed is a matter of specific need for information at a unique stage in the purchase cycle. The challenge for all retailers is that expectations for a seamless transition throughout the funnel are high and rising. Persistence of experience delights the customer.
There are five notions that are driving today’s state of Retail:
- Necessity is the mother of all invention: Downward pressure on the economy increases the desire to save money and make the right purchase decision. Shopping related queries are up 25% y/y this month and deal related queries are predicted to reach a 195% growth rate this December compared to last year. In order to do find the best value and make the right purchase, consumers spend more time investigating how to find the best value.
- Moore's Law in every pocket: Today, gateways (smartphones, tablets, laptops, kiosks, etc.) to real time information are cheap, more powerful and portable than ever before. Forty-four percent of top retailers show product availability online and at store locations. Retailers are beginning to make it easier for consumers to find what they need where and when they need it.
- Reducing friction increases adoption: Internet connected shopping tools are simpler and easier to use than they have ever been. For example, 28% of top 25 retailers feature buy via mobile/pickup in-store.
- Transparency increases opportunity: In addition, pricing and inventory availability have reached near 100% transparency for non-perishable goods.
- Integration enhances the value of convenience over immediacy: Consumers are now empowered to research, price, locate and transact any good/service nearly anywhere in the world within minutes and have it delivered to a doorstep in 2 days. All this, while Americans have less leisure time than they've ever had. Click and deliver often sounds better than park and wait in line.
Retail has evolved from consumer engagement via individual channels to consumers transitioning between them.
- Align your business around a single customer across many channels rather than a channel by channel experience.
- Build exceptional connected experiences across devices that let every unique individual know your brand understands what interests them at that right moment.
- Ensure that your brand can deliver what a customer is looking for regardless of the device, location or time.
*US Online Retail Forecast, Forrester Research