Digital influences 64% of brick-and-mortar spending

Digital interactions are expected to influence 64 cents of every dollar spent in physical retail stores by the end of 2015, but retailers could be misplacing priorities in how they use digital devices to connect with shoppers.

The "digital influence" on traditional brick-and-mortar retailers' sales is growing at a rapid rate, according to a new report by Deloitte Digital. As recently as 2012, digital influenced just 14 cents on every dollar.

Deloitte Digital defines "digital influence" as the percentage of traditional brick-and-mortar retail sales impacted by shoppers' use of digital devices. But a concentration on e- or m-commerce may be a misplaced investment as shoppers increasingly look to mobile devices to facilitate the shopping experience and ease pain points in brick-and-mortar locations.

"Retailers often use the wrong metric—e-commerce sales—to indicate whether their digital strategy is working," said Kasey Lobaugh, principal of Deloitte Consulting and Deloitte Digital's chief retail innovation officer. "Last year, e-commerce sales represented $300 billion, or just 7 percent of total retail sales, while digitally influenced store sales were over five times higher, topping $1.7 trillion. Retailers that prioritize and design digital functionality with the sole purpose of driving sales in the e-commerce channel marginalize the consumer experience and risk ceding authority to competitors." 

For example, mobile influence is up but price checking is down. Consumers said they are 30 percent less likely to use smartphones to perform price comparisons in-store than they were a year ago, even as the influence of smartphones on in-store sales rose to 28 percent in 2014, up from 19 percent the prior year.

Shoppers are using mobile more often for inspiration and idea generation earlier in their shopping process, and not just for price checking. So while the mobile influence on in-store sales is up—to 28 percent in 2014, up from 19 percent the prior year—the number of shoppers using it to compare prices is declining, according to the report.

Digitally influenced shoppers are buying more and converting at higher rates, noted the study. Social media's influence is significant: Consumers that access social media while shopping are four times more likely to spend more, and 29 percent of those surveyed said they would be more likely to make a purchase if they use social media before or during their shopping trip.

Hispanic shoppers are more digitally influenced than many other ethnic demographics, with 49 percent using social media during the shopping journey compared to 32 percent across all ethnic groups. And 41 percent said they spend more in the store as a result of digital influence, compared to 28 percent of all consumers surveyed.

Overall, shoppers are more likely to use digital devices for research and to interact with a brand or product, as opposed to using it simply to check prices or make an online purchase. Retailers that focus on pushing shoppers to click the buy button risk disengaging an increasingly engaged shopper.

"Instead of measuring moments that matter during the shopping journey, retailers continue to focus on measuring the buy button—the point at which they actually have the least influence," said Jeff Simpson, director at Deloitte Consulting and co-author of the study. "Retailers that simply track channel sales and fail to measure the influence of digital along the entire path to purchase can miss key indicators of performance and customer behavior. Retailers should focus on designing and building customer experiences that play to how their customers are shopping for their products—rather than direct consumers to the point of purchase if what they really seek is inspiration or information."

For more:
- See this Deloitte Digital press release

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