October 5, 2016

Storefront vs. Online: Using digital technology to enhance the shopping experience

Improving pet product shopping through digital technology

Should you pull your products off the shelves to concentrate on filling online baskets and shipping boxes? Or should you ignore the lure of e-commerce and stick with the bricks and mortar of traditional retail?

The obvious answer is you can’t do only one of those things. A balanced approach using both retail channels and online sales is, of course, the way to go. But how do you strike that balance, or even blur the lines between the two? What can you learn from each that will help you do a better job with the other? Here are the trends and tips that can help you improve your customers’ experience and increase sales.

Where Are People Shopping for Pet Products?

The majority of pet food and other pet products are sold in two broad channels: pet specialty stores, like PetSmart, and mass market, like grocery stores and Walmart. Shopping for pet products in the pet specialty channel has remained fairly steady in the past five years, but the mass market influence has waned.

A third channel, online, is growing in significance and size, especially among Millennial pet owners. In fact, during the same five-year period, online sales of pet products rose from 7 percent to 9.3 percent, an increase that seems to account for the drop-off in mass market shopping.

Who are these Millennials, and why are they so important? Aged 18 to 33, they currently make up 27 percent of the U.S. adult population. Soon they will eclipse Baby Boomers in terms of spending power, and by 2018, they will have a $3.39 trillion piece of the spending pie. As marketers chase and cater to this lucrative audience, their influence on how other audiences shop has been, and will continue to be, significant.

For pet product marketers like you, Millennials may be even more of a focus. They really love pets, and they love them in all shapes, sizes, and species. 76 percent of Millennials are more likely to splurge on pets than themselves, compared with just 50 percent of Baby Boomers. They’re not discretionary spenders. That means that pet spending seen as discretionary with previous generations is seen as necessary by Millennials.

So let’s concentrate on how Millennials shop, how you can best serve them and how those practices will help you serve your other audiences, okay? Okay.

They have grown up online. Making friends, playing games, getting news and entertainment, and shopping. A 2013 survey of American web users’ attitudes toward e-commerce (from DDB Worldwide) found that both males and females aged 18 to 34 were more likely than their 35- to 64-year-old counterparts to engage in nearly every online shopping activity, with 40 percent of males and 33 percent of females in the younger age group reporting that ideally, they would buy everything online.

They have embraced the deep discounts and convenience offered online. Millennials are price-conscious coupon shoppers. Just like everyone else, they love deals and discounts. In a survey of U.S. online shoppers, 55 percent said they download coupons, and Millennials are increasingly interested in mobile coupons. Nearly half of Millennial coupon users in the U.S. used more mobile coupons in Q3 2015 than a year earlier, according to Valassis. Whether downloading coupons from retailer sites (53 percent for ages 18 to 34, compared to 40 percent for ages 35 to 54, and 24 percent for ages 54 and older) or using social media to get them (40 percent for ages 18 to 34, compared to 22 percent for ages 35 to 54, and 4 percent for 54 and older), the evidence is clear: Millennials love the discounts that online shopping affords.

But Don’t Sell the Store Just Yet

On the other hand, more than 8 in 10 Millennial internet users in the U.S. feel it’s important for a brand to operate a brick-and-mortar location, which is actually higher than older generations.

The way to court Millennials is to give them special attention, according to LoyaltyOne, a Toronto-based loyalty program consultancy. Its U.S. consumer survey found that providing one-on-one time with experts in-store could build affinity and brand loyalty among this elusive demographic. Not only can brick-and-mortar locations act as distribution hubs, they can be knowledge centers. Millennials want personal service.

In his book Retail Revolution, Nelson Lichtenstein takes a look at PetSmart. They faced a challenge when pet food suppliers began selling their products on various e-commerce sites and at Walmart, supermarkets, and other non-pet-specific places. That made PetSmart confront an obvious question: How could it continue to lure customers into the stores? As it turns out, PetSmart had two key advantages it could leverage: an open-door policy for customers’ pets and well-trained sales associates who actually had the product-specific knowledge to influence customer decisions. PetSmart had a leg up on the competition when it came to the shopping experience.

Brick-and-Mortar.com

Blur the lines between in-store and online. Bring the service and trustworthiness of brick-and-mortar locations to your e-commerce site and offer the responsive discounts and convenience of online shopping in-store.

Infuse your website with as much personal service as possible. Include customer reviews and in-depth product descriptions. Offer live chat for a personal touch. Get to know and remember your online customers — decision trees and past purchase suggestions can help your customers select the right product for their needs. If you know they have a 75-pound male Labrador retriever, ask his name and how he’s doing next time they log on. Personalization in the user experience can go a long way in making the online shopping experience more rewarding.

But remember, 93 percent of all sales are still in store. Make that experience more responsive based on your online learnings. Work with your retail partners to control as much of the in-store retail experience as you can. Make recommendations when it comes to the in-store personalization and use your digital knowledge and reach to serve coupons and discounts, and share information about products, promotions and sales.

Mobile is the best thing to happen to bricks-and-mortar since bricks and mortar. A recent WARC webinar suggests those using mobile devices in-store are four times more like to spend more than those who are not.

Asked about how they use their smartphone when out shopping, 75.2 percent of respondents polled searched for better prices elsewhere, 65.8 percent searched for or read product reviews and 62.1 percent searched for or downloaded mobile coupons.

In recent years, retailers have increasingly embraced the concept of the “connected store.” Locations are using in-store digital technologies to enhance the customer experience and ultimately, drive purchases of products — mobile and digital rewards programs are two of the most used in-store technologies.

At WS, we believe in making the most of this brave new world of retail. We know that to be successful when marketing pet products, we cannot choose between brick-and-mortar options and e-commerce. Marketers have to combine the best of what a physical storefront has to offer with everything wonderful that customers get online. We’ve helped many of our clients move from a one or the other mindset to embrace the best of both.

Resources