In 2013, I crudely and conservatively estimated that roughly $1.83 trillion in annual offline purchasing in the US was impacted by the internet. Using consumer survey data, Deloitte Digital came up with a very similar number, saying that in 2014 roughly $1.7 trillion of in-store retail purchases were influenced by digital.
This year’s Deloitte survey generated the following statement: “digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015, or $2.2 trillion.”
Extrapolating from US government data, total retail sales should reach roughly $4.5 trillion in 2015. Accordingly a $2.2 trillion impact would be closer to 48% of total retail sales. Deloitte sees a smaller $3.7 trillion retail sales total, hence the higher percentage figure.
Regardless, the larger point is clear: digital’s influence on offline and in-store sales is huge and increasingly visible (from mobile usage). But this online research-offline buying consumer pattern has been significant for at least a decade.
The 2015 Deloitte study (n=3,016 US adults) contained the following additional high-level observations:
- In-store mobile users “convert at a 20% higher rate” vs. non-digital shoppers
- Digital media influence varies by product category
- Nearly 8 in 10 consumers (76%) interact with brands or products before arriving at the store (and are making buying decisions earlier in the process accordingly)
- 67% of consumers read product reviews as part of their “shopping journey”
Findings 2 – 4 above are already fairly well established. The first observation much less so.
Retailers have until perhaps very recently been profoundly ambivalent about catering to smartphone shoppers — with things like in-store WiFi — because they feared and still fear showrooming. But by enabling the mobile in-store shopper there’s a net gain for retailers.
Digital consumers have access to information that helps them make more confident and immediate buying decisions. In other words they don’t have to go home to consult with a family member or check the internet for product reviews. All of that can be done in real time while in the store, accelerating the time to purchase.
In one sense mobile devices and in-store internet access have served to uncover and make more visible the pre-existing O2O consumer behavior. But mobile is also dramatically shifting the market too. Consumers are even more empowered with real-time information and less susceptible to manipulation by marketing or brand messages.
Retailers still lag far behind consumers in terms of their recognition and adaptation to evolving shopping behaviors and the centrality of mobile devices as shopping and real-time internet access tools.
The Deloitte report is called “navigating the new digital divide.” My spin on that title is that the “divide” is less about different segments of the population and more about the gap between consumers and retailers today.