Physical stores fuel omnichannel sales

Even for ecommerce-oriented brands, physical shops remain a key touchpoint, according to Ipsos.

Korean cosmetics retailer Memebox opened a physical shop in Seoul. (Source: Memebox)
Korean cosmetics retailer Memebox opened a physical shop in Seoul. (Source: Memebox)

HONG KONG - Although e-commerce is growing globally, 85 percent of sales still touch a physical store, based on a survey by Verdict Retail group.

The survey of 30,000 people, highlighted in Ipsos’ Understanding Path to Purchase report, shines the spotlight on the ongoing importance of physical stores. Although the Verdict Retail survey was done in the UK, Stuart Wood, president of Ipsos Path to Purchase, highlighted examples from Asia that show the finding is valid here as well.

Memebox, the Korean cosmetics retailer, which reportedly has 83 percent of its sales from mobile traffic, nonetheless opened its first standalone shop in Seoul recently. In addition, Wood cited the evolution of chat commerce, where retailers blend the opportunity to sell products seamlessly into messaging platforms such as Line and WeChat. For instance, Hang Lung Group malls in China and Hong Kong leverage WeChat to drive loyalty, offering customers digital a queuing system through the messaging service and payment options on the phone. 

“Far from taking over, online and offline blend together for a total omnichannel experience,” Wood said.

Over 60 percent of people research online before buying in-store while 27 percent research in-store before buying online, the report stated.

The best news for retailers: Omnichannel buyers purchase 3.5 times more than buyers who only shop through a single channel. 

The impact of bricks-and-mortar stores is more significant in certain categories, such as electrical items as well as sports and toys. 

“E-commerce is moving in the direction of physical retail presence, since bricks-and-mortar stores are still at the heart of the brand and the omnichannel experience,” said Wood.

Wood also shared results from the Ipsos Global Omni-Channel Shopper Survey 2016, which shows China leading all consumer categories in online sales penetration.

Source: Ipsos Global Omni Channel Shopper Survey 2016

Given the complexity of many purchase decisions, Wood said studying the impact of different touchpoints can help retailers to get a clear picture of consumer behaviours and motivation.

“In the fragmented, fast-changing world of omnichannel behaviours, there is clearly a need for measurement to make informed decision on how and where to invest, and ways to influence shoppers,” said Wood.

Using proprietary analytics, Ipsos has also studied the influence of various touchpoints in driving sales of mobile phones. The results reveal that in-store staff are by far the most influential touchpoint, contributing to 26 percent of sales, followed by brand website (12 percent) and online shop (11 percent).

“Blogs, forums, and online videos are interrelated, but at a relatively smaller impact,” said Wood. “However, having seen one or the other, it is very likely that consumers will talk to family and friends, and should they concur, it is highly likely the brand will be driven into their consideration set.”

Wood said this conclusion shows that a lot of touchpoints are very strong at driving considerations, but very few touchpoints are actually converting purchases.

Other takeaways: 

  • Digital channels and physical stores are equaly important, many consumers use both when making purchases.
  • The importance of brand building: brand choice is decided before a visit to a physical or online store in 40 percent of cases
  • Nearly 50 percent of consumers choose to buy in-store

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