IBM study: Retailers must adapt to hybrid shopping model

By Kate Birch
While digital shopping has accelerated, physical stores remain important for consumers, as a hybrid model of shopping will dominate 2022, reveals IBM study

While it’s no secret that the pandemic has accelerated the shift to digital shopping. consumers are not yet ready to ditch bricks and mortar entirely. 

A recent Mastercard report revealed that ecommerce sales in the US over the holiday period were up 61% compared with the pre-pandemic period in 2019; and online sales made up 20.9% of all retail sales this year, while in 2019, they accounted for just 14.6%.

And certainly, digital commerce, both ecommerce and social commerce, is expected to grow throughout 2022 and beyond. 

Consumers still want to shop in physical stores

However, physical stores – bricks and mortar – remain a crucial part of the shopping mix, and are not expected to be completely replaced by digital anytime soon, as a recent consumer survey reveals. 

According to a global survey by IBM and the National Retail Federation (NRF) of 19,000 consumers, one in four consumers choose to shop the hybrid way, mixing physical and digital channels, with nearly three-quarters (72%) saying they use the physical store as all or part of their primary purchase method. 

Among the main reasons for consumers still placing a high value on the traditional in-store shopping experience is being able to touch and feel the products before buying them (50%), picking and choosing their own products (47%), something that’s especially relevant in the food sector, obtaining products right away (43%). 

 

Hybrid shopping set to be the norm

The IBM/NRF report, titled Consumers Want It All reveals that consumers no longer see online and offline shopping as distinct experiences, but expect instead everything to be connected. They want shopping to be fast and efficient sometimes and rich and experiential at other times. They want to visit stores, shop online, and use mobile apps interchangeably and desire the freedom to use whatever shopping method is most convenient for them at the time. 

The hybrid shopping journey is the primary buying method for younger consumers especially Gen Z (37%) and Millennials (30%). And as digital natives, more than half of Millennials (58%) and Gen Z (56%) use mobile apps and web browsers to shop outside of the store more than their older counterparts – 71% of Gen X and 78% of Baby Boomers shop more in-store. 

If hybrid shopping is here to stay, as research finds, then what can retailers do to create buying journeys that easily work no matter what path a customer takes?

Streamlining and digitising the store experience

Streamlining and digitising the store experience, while also integrating digital and in-store experiences is vital. companies must seamlessly integrate their digital and physical operating platforms to deliver an experience that leverages each channel’s strengths.

Digital tools such as in-store self check-out, order online and pick up at store or collect, and mobile contactless payment have all become an integral part of the in-store experience. 

The report advises retailers to learn which digital and in-store touchpoints are most important for different customers and be prepared to make real-time changes as their needs shift. This requires robust customer data platforms that collect and analyse information from internal and external sources to help retailers take action regardless of channel, and also help them personalise the shopping experience. 

Take Sam’s Club, an American chain of membership-only retail warehouse clubs owned and operated by Walmart. During the pandemic, the retailer evolved its app to enable quick and contactless shopping for its members. The app automatically generates personalised shopping lists based on members’ previous purchases, removing friction from the experience. It also offers direct-to-home shipping, which lets members buy items in the store and have them shipped home. 

It’s an agility that retailers need to tap into the hybrid shopping model so increasingly prevalent today. 

 

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