‘People search online but buy in-store’ – why the high street is still booming
It would be folly to suggest the Australian high street is not under pressure. It has been for years.
How can it not be when online stores – recognised and respected international brands at that – have muscled in on a landscape once dominated by the physical presence of our domestic retailers.
They have eaten into sales, market share and morale of local players. The launch of Amazon in Australia earlier this year will further erode their confidence, and to the consternation of management and shareholders, the bottom line.
However, it may not all be doom and gloom. Behind the grim headlines of boarded-up shops and declining revenues, a brighter picture emerges.
According to ShopFully, a smartphone app that markets digitally but drives shoppers to physical stores, the future is far removed from the tumbleweed-strewn high streets we are supposedly soon to encounter.
Online sales are indisputably on the rise, but – and this is where the picture looks rosier – so is business through physical stores.
In the US, for example, 4000 stores opened in 2017, a figure as startling as the apparent demise of the in-store experience.
ShopFully Australia country manager Dean Vocisano was under no illusion where the sharpest growth lay – online. But the quaintly old-fashioned world of bricks and mortar isn’t, it seems, faring too poorly either.
“There is a huge emphasis on e-commerce around the world and yes, absolutely it is still on the rise, I’m not going to deny that,” Vocisano says. “But what’s forgotten is that 92% of sales still take place in physical stores when you average out all the categories.
“Clearly different categories have varying levels of e-commerce engagement, but on average more than nine out of 10 sales happen in physical stores. That, quite obviously, is a huge number.”
Nevertheless, looking at the growth curve of each channel, a cursory analysis may suggest that online is leaving the physical world behind. And to some degree it is. But Vocisano observed that while online sales growth of 20% appears impressive, it’s off a base of only 8%.
In-store sales, on the other hand, are rising 4%, off 92%.
“We shouldn’t overlook these figures,” he says. “Four per cent doesn’t seem very impressive, but when you multiply that across the 92% of physical store sales, it’s significant. That is a huge growth in the physical world. It proves that consumers still want to touch. They want to feel and interact with their fellow humans.”
Furthermore, if marketers can overcome one problem, their offline sales may look even healthier.
That problem, and it’s not an insignificant one, is making bricks and mortar locations more “transparent” to the consumer in the online arena.
Explaining further, Vocisano says brands and their marketing departments must stop assuming that online advertising should target online shoppers. On the contrary, providing the right content and detailed store information – including opening hours and directions – will lure consumers to stores.
“I think people get confused about where to focus their efforts when it comes to digital advertising, believing it has to drive consumers to an e-commerce platform,” he says. “It doesn’t.”
Vocisani added that 82% of consumers consult their mobile devices before heading to a store, with 90% of those having “no idea what they’re going to buy, what brands they want or what store they’re going to visit”.
What the consumer wants, he argued, is an online aggregation of product. With that in mind, ShopFully was born.
“What marketers are ignoring is that finding the right store location, price and product are becoming higher and higher priorities in this e-commerce world.
“Everybody is searching for products online but not necessarily purchasing online. What we’re focusing on at ShopFully is making physical stores more transparent in an online environment, giving consumers a frictionless and seamless experience and providing the same experience to that of physical stores.
“It’s about giving consumers what they want, how they want it, where they want it. Also, it’s all geo-localised, from the content, to store hours, to directions and pricing.
“It became clear to us at ShopFully that in this corner of the Internet, no one was focusing on how to simplify it from the consumer point of view.”
The Italy-based start-up was founded in 2010 and, over the past eight years, has expanded around the world including, 18 months ago, to Australia.
It has so far generated 1.15m downloads of its app locally, a “small number” considering the population of Australia, Vocisano says. But what it lacks in numbers – many companies, it should be noted, would be delighted with that number of downloads – it makes up for in engagement, with consumers spending seven minutes browsing content in any one session.
ShopFully’s roots lie in the creation of an online version of the flyer, or catalogue, the print-based marketing collateral that was historically the most effective way of driving consumers to shops.
It is a format that still resonates, Vocisano suggested, albeit one that increasingly needs to be housed in a digital environment. Along with the effectiveness of catalogues, ShopFully spied an opportunity after realising that no one had digitised such content.
“Anyone who has worked with catalogues would know it is one of the most engaging pieces of marketing you could ever do, and certainly one of the biggest drivers of in-store traffic,” he says.
Not that catalogue format is the only format. Brands have the option to present content on the app in a variety of forms, be it led by price, product, inspiration or lifestyle.
Unlike print, however, ShopFully says the browsing behaviour through its app, and subsequent store visits are measurable and provide retailers and brand marketers with rich data.
“Data which detects how many consumers have looked at your content and gone to a physical store in the past 24 hours is invaluable,” Vocisano says. “That allows us as a company, marketers and agencies to change marketing campaigns in real time to impact right there and then the actual drive to store of a consumer.
“The biggest thing is that it’s geo-localised, so the only content you will see is content that is available within a 20-minute drive. That allows us to create different prices for different retailers at different times. We can do geo-timing based on location with offers sent in relation to the proximity to different stores.”
A dashboard also allows retailers and agents to understand in real time what consumers are browsing, and tailor promotions accordingly.
Not only that, but ShopFully can link consumers’ search behaviour to their store visits through a combination of its geo-fencing technology, retailer’s beacon technology and the wifi networks of shopping centres.
While the accuracy of geo-fencing technology alone is debatable, a state of affairs acknowledged by ShopFully, the combined data points suggest errors are rare. It is an assertion supported by Nielsen which conducted an independent analysis.
“They had access to all of our data, our app technology and we were proud to get a 98.8% accuracy rate.”
There is little doubt physical stores in 2018 are being challenged. It would be foolish to suggest otherwise. But challenged doesn’t mean their days are numbered. At least not for those who embrace technology and evolve in step with the consumer.
“We think we are the forefront of this drive to store technology,” Vocisano says. “We think we are in a unique position to help retailers understand what content is driving consumers to store and to make the transition from physical to digital catalogue which is more transparent, easily measurable and more cost-effective.”
There’s life in the old physical store yet.
The “High Street”? Since when did Australia refer to that very British term for strip shops?
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