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Study: Digital influences $1 trillion in retail sales

BY Dan Berthiaume

New York – Digital interactions influence 36 cents of every dollar spent in the retail store, or approximately $1.1 trillion. According to the latest study from Deloitte Digital, by the end of 2014, that number will climb to 50%, or $1.5 trillion of total store sales.

The study, "The New Digital Divide," shows that looking solely at smartphones, industry estimates put mobile commerce sales at roughly $40 billion in 2014. By comparison, Deloitte Digital’s data indicates that mobile-influenced sales in the store have reached $593 billion, suggesting that smartphones’ influence on store sales has far surpassed the rate at which consumers make a purchase directly on their phones.

Consumers using a device during their shopping journey convert, meaning they make a purchase, at a rate 40% higher than those who do not use a device. In addition, Deloitte Digital found a dramatic impact on traffic, spending and loyalty from digital shoppers. For example, 84% of store visitors use their devices before or during a shopping trip, 22% of consumers spend more as a result of using digital; just more half of these shoppers report spending at least 25% more than they had intended. Three-quarters of respondents said product information found on social channels influenced their shopping behavior and enhanced loyalty.

Currently, more than 90% of retail sales occur in brick-and-mortar stores, but the surging digital influence calls upon retailers to redefine marketing, the store associate’s role and in-store technology. Consumers largely prefer to navigate the aisles and the checkout without a store associate’s help. Eight-in-10 (80%) respondents in Deloitte Digital’s study said they prefer to obtain product information on their own device or from an in-store device like a kiosk, rather than ask a sales associate.

However, digital interactions vary significantly by store category, with the highest influence occurring in specialty stores. At the top is the electronics/appliances category, where devices influence 58% of store sales, followed by furniture (56%) and sporting goods (50%); the impact falls lower in categories like health/personal care/drug (35%), grocery (29%) and general merchandise/department/warehouse club (23%).

"Each interaction is an opportunity for a retailer to enhance the customer experience and tell its brand story," said Jeff Simpson, director, Deloitte Consulting LLP and co-author of the study. "However, retailers often measure success solely on how many widgets they sell through their web or mobile sites. For example, retailers might regard online shopping cart abandonment as a failed conversion when in reality, it may represent a customer who started their wish list in the online basket, but chose to purchase the items in the store. In that case, digital engagement may have led to a sale in the physical store. This impact is much higher when measured holistically across the organization and regardless of channels, rather than force-fitted to a single point of purchase."

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App developer unlocks gift card opportunity

BY CSA STAFF

The proliferation of gift cards has spawned the creation of unique app that can help retailers unlock the value of unspent gift cards.

The new app from Kofax Limited allows consumers to check the balance of a gift card by taking a photo of the card. At first blush, the new app appears to solve a problem that shoppers’ didn’t know they had considering balances are readily obtained by asking a store associate to swipe the card or by dialing a toll-free number. However, neither of those approaches is as convenient as the new app from Kofax nor as beneficial to retailers.

“By offering a convenient way to check balances via smartphones, retailers can now make it easier for consumers to spend gift cards,” said Drew Hyatt, SVP of mobile applications at Kofax. “This is just one more value-added mobile service that card issuers using the Kofax Mobile Capture Platform can offer to increase customer loyalty and revenue.”

Retailers have a powerful incentive to encourage shoppers to use every last penny on their stored value cards. Of the roughly $140 billion in annual gift card volume, an annual report from CEB TowerGroup, estimates that $1.7 billion goes unspent. That pot of money potentially ends up in the coffers of cash-strapped states looking to boost revenue by collecting unused retail gift card funds under abandoned property laws, according to Kofax.

Retailers have significant motivation to prevent that from happening because CEB TowerGroup’s report also shows that consumers spend on average 20% to 30% more when they use a gift card or apply gift card funds to retail purchases.

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App developer unlocks gift card opportunity

BY CSA STAFF

The proliferation of gift cards has spawned the creation of unique app that can help retailers unlock the value of unspent gift cards.

The new app from Kofax Limited allows consumers to check the balance of a gift card by taking a photo of the card. At first blush, the new app appears to solve a problem that shoppers’ didn’t know they had considering balances are readily obtained by asking a store associate to swipe the card or by dialing a toll-free number. However, neither of those approaches is as convenient as the new app from Kofax nor as beneficial to retailers.

“By offering a convenient way to check balances via smartphones, retailers can now make it easier for consumers to spend gift cards,” said Drew Hyatt, SVP of mobile applications at Kofax. “This is just one more value-added mobile service that card issuers using the Kofax Mobile Capture Platform can offer to increase customer loyalty and revenue.”

Retailers have a powerful incentive to encourage shoppers to use every last penny on their stored value cards. Of the roughly $140 billion in annual gift card volume, an annual report from CEB TowerGroup, estimates that $1.7 billion goes unspent. That pot of money potentially ends up in the coffers of cash-strapped states looking to boost revenue by collecting unused retail gift card funds under abandoned property laws, according to Kofax.

Retailers have significant motivation to prevent that from happening because CEB TowerGroup’s report also shows that consumers spend on average 20% to 30% more when they use a gift card or apply gift card funds to retail purchases.

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