Forecast shows shift to omni-channel purchasing

This trend presents significant opportunities for South African retailers to deliver personalised and relevant cross-channel experiences that increase the value they provide to their customers which, in turn, increase loyalty and sales for their brand. Deploying the right technologies can maximise the advantages of every touch point and present customers with a seamless and personalised shopping experience

Trend forecast

Based on seven years of historical data and over 450 billion visits to more than 2000 retail websites, the report accurately forecasts festive season holiday shopping trends.

Among other trends, the index shows that in Europe, tablet shopping will grow by 60% year-on-year, and smartphone shopping by as much as 97% during this holiday season. Clearly, consumer spending continues its fast-paced migration from traditional physical channels, to online and mobile channels.

Considering South Africa's rising smartphone penetration rates (research group InMobi pegs this at 36% already), it is likely that local trends will follow a similar trajectory over the coming years. Recent Acentric Marketing Research suggests that about 1.2 million South Africans are now shopping online. Therefore, the scene is being set for a new era in retailing in South Africa.

New era in retail

Until now, digital sales channels have often been regarded as being in competition with a retailer's bricks-and-mortar outlets. The different channels have often been disjointed, such as presenting different special offers that are specific to each channel, for instance. Other retailers have been sluggish to invest in the digital touch points in general - preferring to rely on traditional feet in store.

However, for local retailers to defend and gain market share over the coming years, a new approach is required, where physical and virtual channels complement each other in an omni-channel environment.

Omni-channel describes the next wave of evolution from cross-channel and multi-channel, where various physical and virtual channels are seamlessly deployed together to create an enhanced, personalised experience at every step of the customer journey - from research, to enquiry, to purchasing and support.

It is more than simply opening up new customer touch points for one to interact with a brand. All channels are underpinned by the same technology architecture and CRM systems, as well as the same strategic vision, to provide consistency and the fluidity as a consumer moves from one channel to the next.

In fact, a successful omni-channel strategy effectively dissolves the borders between the channels to the point where the customer is less conscious of the particular channel he is using - as he or she is presented with a personalised, well-informed and efficient buying experience, wherever he or she might be.

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Emerging technologies push trend

The trend to omni-channel marketing is being fuelled by evolving customer preferences and demands, as well as something of a "perfect storm" of emerging technologies - such as location-based services, smartphones and tablets, social media and big data.

In stores, various technologies and strategies can be deployed to augment the shopping experience and add value to the customer. These strategies maximise the advantages of the physical store for those high-touch, "human" interactions. Examples include free WiFi for customers, video demonstrations and offering discounts and innovative product bundles.

Globally retail stores are already using these strategies to improve the customer's retail experience.

UK retailer Marks & Spencer, for example, has implemented free in-store WiFi, interactive kiosks that allow customers to browse electronic catalogues, and tablets that are issued to staff on the floor - to improve the customer experience. Armed with roaming tablet or smartphone devices, in-store sales staff can tap into the central database of customer information - where profiles and preferences across channels are synched to create a full picture of a customer's entire history. Interactions are more informed, more personalised and therefore far more likely to result in a sale.

Click and collect

Considering that distribution costs and reliability is one of the biggest factors hampering the growth of eCommerce locally, the "come and collect" strategy may emerge as a very popular trend in South Africa - where the user researches, enquires and purchases via a digital channel and then drops in at the store to collect.

In the UK, this practice is already well established. eConsultancy says 40% of shoppers in the UK used 'click-and-collect' in the run up to Christmas 2012 - with retail group Halfords reporting an astonishing 86% via click-and-collect.

In many ways, consumers are already finding ways of connecting the virtual and the physical worlds. Interestingly, the Adobe research shows an increase in the trend known as "showrooming" in which customers examine merchandise in a physical store but then purchase online. Already 35% of 18 to 34 year olds leverage mobile devices to compare prices while in store.

The retailer that is best able to support this consumer behaviour, while defining effective strategies to embrace omni-channel, will be well placed in the new era of retail in South Africa.