Global shopping trends have drastically been altered with the advent of e-commerce. As more and more customers are shifting to online marketplaces, retailers are considering switching to mobile and social digital strategies as an option to further expand their traditional businesses. A study by Retail Systems Research, LLC has presented several interesting findings pertaining to retailer views towards digital convergence. RSR, sponsored by SAS has been tracking retailers’ e-commerce strategies for several years, and has recently released the 2016 Benchmark Report – Digital Convergence: The Future of Digital Commerce. The report, based on a comprehensive survey of 120 retailers of varying demographics, aims to understand the relationship between different retail businesses and their approach to digital convergence.
A major barrier to developing an idea of retailers’ attitude to “Digital Convergence”, according to the report, would be the ambiguity over the term itself. “It increasingly looks like digital convergence means different things to different types of retailers”, says Nikki Baird, who co-authored the report and is managing partner at RSR.
Retailers have always strived to achieve higher growth rates, catering to the altering customer shopping patterns, and are now learning to adapt to the online ecosystem. An online presence of their business helps them reach out to thousands, or even millions of new customers. Also, loyal customers of legacy stores look forward to e-commerce portals of their favorite shopping destinations, and therefore it is only logical that retailers keep up with the times.
It is imperative for retailers to understand the significance of e-commerce. For some, it is just another portal for their stores, while for others it is an entire business. There is a huge disconnect between established businesses and their digital counterparts. Although retailers have taken several initiatives to enter into the digital market, their strategies have a lot to be worked upon.
According to Baird, “Digital convergence has not yet been achieved”, as he points out the flaws in current models of retailers’ digital strategies. When surveyed, most of the retailers envisioned more than 50% of their sales coming from digital channels in a few years, but they were stumped when asked about the sales from digital influence. They need to realize that digital influence is not restricted to just the digital channel, but can extend to all channels. The selling point of digital convergence lies in integrating both types of businesses for maximum profit and improved efficiency.
While large retailers are now focusing on blending their physical and digital stores. Several small retailers have chosen to run their businesses on the digital marketplace only. This trend is understandable, as the former prioritizes expanding their business to more customers, and the latter does not necessarily have all the resources or are tight on investments.
The huge disparity among retailer choices isn’t limited to just the size of business. The report suggests that there are key differences in the attitude and interests of different types of retailers. For example, hard goods retailers are more interested in combining the benefits of digital and legacy markets, and are the most digitally connected. Fashion retailers, on the other hand, are more likely to fixate themselves on either store or digital, and are not very interested in blending them together.
If you are looking to expand your business’s horizons and break into the digital marketplace but don’t know where to start, contact a Merit Mile professional today.