Digital technologies are driving massive changes throughout the business world, but it’s reasonable to say that the retail industry has been impacted more by the digital revolution than any other major business sector. eMarketer recently estimated that global retail ecommerce sales will reach $1.915 trillion in 2016, and will grow to over $4 trillion in 2020. And ecommerce sales alone don’t reveal the full impact of digital technologies on retail enterprises. A recent study by Deloitte found that digital technologies influenced 49% of U.S. in-store retail sales in 2014.
A 2016 report by SapientNitro provides several interesting insights about how retailers are responding to the new digital environment. Global Retailing in the Digital Age is based on an analysis of ninety-nine U.S., Canadian, and UK retailers with physical stores. SapientNitro’s evaluation focused on three areas:
- Mobile app effectiveness (overall and in-store)
- The store experience
- Ecommerce effectiveness (including click and collect, and ratings and reviews)
The core argument in the SapientNitro report is that retailers must undertake a fundamental transformation if they want to be successful in a digital world. The report’s authors write: “In fact, our big realization is that retailing in the digital age doesn’t mean introducing ‘digital’ (e.g., kiosks or tablets) to the physical space. Instead, it means redefining your entire business around operating in a digital world.”
The report goes on to argue that this digital transformation should be centered around three main questions:
- How can retailers improve flexibility? – “This means omnichannel and visibility, click and collect; mobile ordering; ship-to-home; and all the permutations.”
- How can retailers make the customer experience more immersive? – “Museum quality if you’re selling tech hardware. Dynamic changing rooms and great customer service if you’re in apparel. Smaller spaces. Better tools. Faster service”
- How can retailers make their retail properties (mobile, ecommerce, and physical) fit for purpose? – “Retailers in the digital age need inventory, but they don’t need as much inventory. Endless aisle tools, smartphones, visibility of inventory, and sales associates . . . all means more flexibility. Reduce square footage, invest in community events, and make the store and brand be more connected to humans.”
The SapientNitro report emphasizes many of the same points that other analysts and research firms have noted, but it also provides a take on current issues that retail marketers should find informative and valuable.