Holiday sales are expected to grow more slowly overall this year even as mobile’s influence continues to gain, meaning that retailers with the strongest smartphone strategies could be the season’s biggest winners.
Mobile and digital engagement have reached a tipping point and are playing a greater role generating sales in the physical store, where more than 90% of retail sales occur, than in digital channels alone, according to new data from Deloitte. In fact, Deloitte forecasts that for the 2015 holiday season, digital interactions will influence 64 cents of every dollar spent in bricks-and-mortar stores, totaling $434 billion.
“As retailers accept impact of digital interactions on driving sales, unfortunately we see many retailers focus their efforts on investing in digital to support ecommerce – forgetting about digitals influence on in-store sales,” said Rod Sides, leader of the retail and distribution sector at Deloitte.
“Last year, 50% of in store transactions resulted from a brand’s digital influence on a customer,” he said. “This year, we can expect that to grow to 64% with digitally influenced sales being five times larger than e-commerce sales.
“Retailers should remember that consumers are always online – always connected. So as they shop in brick-and-mortar stores, they are still interacting with the brand via mobile devices. It doesn’t stop at the door.”
A key component of a successful mobile retail strategy this year will be shopping applications.
Another must-have this season for bricks-and-mortar retailers will be some basic location-based features.
“Mobile apps will have a hand in sales across all retail channels this year – whether used
as a research vehicle prior to in-store or online purchases, a shopping companion during
the in-store shopping experience, or a platform for customers to complete purchases
within the app,” said Lauren Hand, Marketing Director for GPShopper.
“Retailers without a well-functioning mobile app that also adds to the in-store shopping
experience will suffer as a result, while those with mature mobile strategies will experience
great success,” she said.
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Tepid overall growth
New research from Deloitte predicts that holiday sales will grow between 3.5% and 4% compared to last year while non-store sales, including online and mail order, are expected to increase between 8.5% and 9%.
The forecast for a moderate increase in overall sales is based on the mixed economic landscape, with some improvement in consumer sentiment and spending as the labor market improves, home values increase and gas prices drop yet lingering effects from flat personal income growth due to stagnant wages.
Deloitte’s research shows that consumers who shop on their phones, tablets and other devices while in stores are more likely to make a purchase and spend more overall. Additionally, nearly 80% of shoppers say they engage with a retailer or brand through digital channels before setting foot inside the store.
The opportunity for retailers to provide inspiration, reviews, product locators and omnichannel services such as the ability to buy online and pick up in the store.
“In order to complete the in-store sale-cycle, retailers must start finding ways to interact and engage consumers on mobile devices well before they enter the brick-and-mortar store as studies have shown that 76% of consumers interact with brands and products before arriving at the store,” Mr. Sides said. “Consumers are also using mobile to generate ideas and inspire purchases.
“Knowing this, retailers will need to create an experience that is initiated and driven by digital engagement and results in an in-store sale,” he said. “By engaging with buyers before stepping foot into a brick and mortar store, retailers will need to shift from face-to-face engagement with consumers to one-on-one engagement through their mobile devices.”