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LIVE FROM NRF: How Digital Drives the In-store Experience


It's well understood that the way consumers see the physical store has changed in recent years. And if they want to lead the channel, grocers, too, have to see the physical store in a new light.

In a Jan. 15 keynote presentation at the National Retail Federation's annual “Retail's Big Show,” Rod Sides, retail, wholesale and distribution leader at research firm Deloitte LLP, noted that even though U.S. retail sales are growing – though not as fast as hoped – the physical store today is less about the entire shopping journey and more about just completing that journey. Store traffic is declining, and the shopping journey now begins earlier in the process and online.

Still, stores remain the primary place where consumers spend their time and make the majority of their purchase. Although retailers are talking more than ever about omnichannel strategy, Deloitte research shows only a 2 percent growth of online sales over the past eight quarters, Sides said.

But much needs to be done to fix the in-store experience, Sides stressed. By polling 2,000 people and analyzing half a million tweets about their shopping experience, Deloitte found that only 47 percent of people are satisfied with the transactional experience (product availability, quick checkout, wide variety, etc.), and 41 percent with the emotional experience (availability of quality, trustworthy products; enjoyment of loyalty program; etc.).

“It's no wonder that we're really struggling to bring people back to the store [and] come back to be a part of that community – and really have a reason to show up,” he stated.

Given that digital has an influence on stores – with $1.8 trillion of annual sales being influenced by digital, Sides said – and the expectation of great customer service and satisfaction is set by digital, not in-store, retailers need to use data and digital in a new and different way if they want to lead.

But what are the leading U.S. retailers doing to create a new experience? According to Sides, Deloitte examined the top 200 retailers in the country from an economic perspective, and depending on the nature of its offering to consumers, there is a big difference in terms of who's winning. Looking at EBITDA over the last five years, the firm found that if a retailer provides differentiated products and experience, then growth is almost 13 percent that particular segment compared to the average growth of 2 percent.

In the end, Sides emphasized, winning retailers do three things:

  1. They have integrated experiences – There is no online or offline to them, as consumers are online and connected all the time.
  2. They leverage customer data in meaningful ways – One size doesn't fit all to these retailers, as meaningful data is different by category. For example, in baby care, people might want detailed info on products to really understand its power and quality, as well as its safety ratings. This might not be the same expectations in another category.
  3. They compel shoppers to return to their stores – Retailers winning today all create integrated unique experiences, which allows them to continue to grow.
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