Retailers are losing control — at least digitally.
And that’s a big deal.
According to new research from consultancy Deloitte, digital interactions influence 56 cents of every dollar spent in stores — or $2.1 trillion — up from 14 cents per dollar in 2013.
But Deloitte said that even as digital becomes more important to spending, retailers have less influence on the shopper’s “purchase journey” as Facebook and Google and the like redefine what a great customer experience means with constant, real-time connections.
“Any retailer who thinks they can build their own personalized experience to interact with customers anywhere near the extent of major digital platforms and find success may be disappointed with their results” said Jeff Simpson, coauthor of the study and principal at Deloitte.
“Their limited interaction with customers — about six to eight transactions per year — limits their understanding of the ‘moments that matter’ in a personalized experience such as purchase intent and preference,” Simpson said. “Instead, retailers should more aggressively embrace integration and the native capabilities of the major digital platforms where their customers have already chosen to interact and transact.”
The retail giants — from Wal-Mart Stores Inc. to Gap Inc. to Nordstrom — have all been contending with not just changing trends, but systemic changes to an industry that is struggling to find the balance between clicks (where all the action is) and bricks (the profit center).
At the same time, the online giants have been working to help brands connect with users on their platforms. Pinterest, for instance, just completed a yearlong study showing that Pins that show products in “real-life” situations lead to higher click and checkout rates.
Even though brands are adjusting their strategies to be where the shoppers, they still find themselves increasing getting their brand message out on the consumer’s terms.
The study showed that two third of consumers prefer a “self-directed” shopping journey, up from 30 percent in 2014, and that the influence of advertising is changing.
“Two years ago, 70 percent of surveyed consumers said they responded to advertising compared to nearly 30 percent in this year’s study,” Deloitte said.
At the same time, shoppers have grown increasingly comfortable with trading their digital data as they parry with brands.
“More consumers are starting to share their location and personal details to acquire better service and perks from a store or to receive more personalized e-mails with recommendations and suggestions to blogs,” Deloitte said.
The survey showed that 48 percent of shoppers are willing to trade their data for personalized service.
The consultancy polled 5,014 random consumers in late April and early May to piece together a picture the broader shopping picture.