Table of Contents
Executive Summary
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- Overview
- The state of retail
- What you want to know
- What we see
- Defining omnichannel shoppers
- What you want to know
- What we see
- Drivers and barriers
- What you want to know
- What we see
- Key trends
- What you want to know
- What we see
- The role of technology
- What you want to know
- What we see
- What it means
Defining Omnichannel
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- Omnichannel is not a trend, it’s the “way we shop”
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- Figure 1: Shopping method, February 2019
- Four out of five consumers are multichannel shoppers
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- Figure 2: Multichannel shopping, by generation, February 2019
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- Figure 3: Multichannel shopping, by household income, February 2019
The Market – What You Need to Know
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- Retail industry past the point of apocalyptic panic
- Ecommerce is small, but mighty
- Retail sales dominated by five types of businesses
- Positive economic climate supports the retail sector
- Population trends serve as leading indicators for future of retail
Market Size and Forecast
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- Retail industry continues to post gains
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- Figure 4: Total US retail sales and fan chart forecast, at current prices, 2013-23
- Figure 5: Total US retail sales, at current prices, 2013-23
- Ecommerce outpaces total retail by 4:1, but comprises only 10% of total sales
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- Figure 6: Ecommerce share of total US retail sales, at current prices, 2013-23
- Figure 7: Total US retail ecommerce sales and fan chart forecast, at current prices, 2013-23
- Figure 8: Total US retail ecommerce sales forecast, at current prices, 2013-23
Market Breakdown
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- Five sectors encompass three out of four retail sales
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- Figure 9: Percentage of total retail sales by kind of business, 2018
- Clothing and accessories top digital sales
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- Figure 10: Share of ecommerce sales, by product category, 2016 and 2018
Market Factors
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- Economy
- Macroeconomic indicators mostly positive for retail industry
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- Figure 11: Consumers’ plans for tax refunds, February 2019
- Figure 12: GDP change from previous period and consumption expenditures, 2007-18
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- Figure 13: Disposable personal income change from previous period, January 2007-January 2019
- Figure 14: Consumer confidence and unemployment, 2000-March 2019
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- Figure 15: Consumer Price Index change from previous period, January 2017-February 2019
- Impact of tariffs could lead to price increases
- Population
- America’s youth set to grow the fastest
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- Figure 16: Population by generation, 2018
- The youngest generations are also the most diverse
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- Figure 17: Population by race, Hispanic origin and generation, 2018
- Other demographic trends
- Other factors
- Channel blurring occurs as store openings outpace closings
- More ways to jump online means more ways to shop
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- Figure 18: Devices used to access the internet, February 2019
The Consumer – What You Need to Know
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- Online preferred for browsing, stores preferred for buying
- CPG categories see fewer multichannel shoppers
- Lower prices, elevated convenience drive shoppers online
- Technology is connective tissue between channels
- Different channels have different strengths, but consumers seek consistency
- Click-and-collect services bridge online and offline experience
- Bringing the fun back to in-store shopping
Shopping Methods by Shopping Scenarios
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- Online for browsing, stores for purchasing
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- Figure 19: Shopping methods, by shopping scenarios – Net, February 2019
- Opportunity to drive impulse purchasing online
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- Figure 20: Shopping methods, by shopping scenarios, February 2019
Shopping Method by Item
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- CPG categories lag when it comes to multichannel shopping
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- Figure 21: Multichannel shopping versus single-channel shopping, by item, February 2019
- Searching and buying channel preferences closely mirror each other
- Searching
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- Figure 22: In-store versus online shopping, by item – Part one, February 2019
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- Figure 23: In-store versus online shopping, by item – Part two, February 2019
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- Figure 24: In-store versus online shopping, by item – Part three, February 2019
- Buying
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- Figure 25: In-store versus online buying, by item, February 2019
- Shopping for replenishment purposes more likely to be confined to one channel
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- Figure 26: Online searching versus buying, by select items, February 2019
Channel Drivers
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- In-store wins on everything but price and convenience
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- Figure 27: Channel drivers, February 2019
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- Figure 28: Channel preferences for customer service, product quality and reliability, by age, February 2019
- Both channels have merit when it comes to speed
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- Figure 29: Channel preference for speed, by age, February 2019
- Stores move toward experiential retailing
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- Figure 30: Everlane Cashmere Tour event social media promotion, December 2018
- Shoppers go online when looking for convenience and a better deal
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- Figure 31: Channel preference for speed, by age, February 2019
Omnichannel Shopping Behaviors
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- When it comes to digital tools and tech, younger consumers lead the way
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- Figure 32: Engagement with/interest in omnichannel offerings, by age, February 2019
- Use of tech
- Leading with digital to transform physical
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- Figure 33: Use of in-store digital devices, February 2019
- Cashierless tech
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- Figure 34: Amazon Go demonstration, May 2019
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- Figure 35: Usage and interest in ability to track total spending while shopping, by household income, February 2019
- Pickup and returns
- Shoppers like having the option to pick up or return online orders at a store
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- Figure 36: Purchasing online and picking up or returning to a store, by parental status, February 2019
Use of Mobile
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- Nearly four in 10 shoppers consult their mobile device while shopping in-store
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- Figure 37: Mobile phone shopping and buying while in-store, February 2019
- Two thirds of mobile shoppers check prices on their phone while in a store
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- Figure 38: Reasons for using mobile device in-store, February 2019
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- Figure 39: Reasons for using mobile device in-store, by generation, February 2019
- Store associates increasingly empowered with mobile devices
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- Figure 40: Interaction with tech-enabled store associates, February 2019
Attitudes toward Omnichannel Offerings
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- Channel consistency matters
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- Figure 41: Attitudes regarding pricing strategies by channel, February 2019
- Younger consumers will share personal information to get customized recommendations
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- Figure 42: Attitudes regarding personalization, by age, February 2019
Attitudes and Behaviors toward Buy Online, Pick Up In-store Services
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- Consumer interest is there, but BOPIS not seen as a mandatory
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- Figure 43: Engagement or interest in option to purchase online and pick up in-store, February 2019
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- Figure 44: Important factors when deciding whether or not to buy online, November 2018
- Saving money and time are key benefits
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- Figure 45: Top five motivations to use buy online, pick up in-store services, February 2019
- Satisfaction is high
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- Figure 46: Walmart grocery pickup direct mail, April 2019
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- Figure 47: Buy online, pick up in-store shopping experience, February 2019
- Retailers are testing various approaches to BOPIS
Delivery Preferences
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- Delivery options expand to meet consumers on their terms
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- Figure 48: Delivery preferences, February 2019
- Consumers want flexibility and choice
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- Figure 49: Interest in delivery enhancements, February 2019
- Young men most open to new forms of delivery
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- Figure 50: Interest in delivery enhancements, by gender and age, February 2019
Preferred Types of In-store Experiences
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- It’s all about elevated convenience and fun
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- Figure 51: Reasons for shopping at a physical store, February 2019
- Event-based experiences can draw audiences to stores
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- Figure 52: Ikea Facebook ad, May 2019
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- Figure 53: Types of in-store experiences, February 2019
- Technology and social opportunities can draw younger consumers to stores
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- Figure 54: Select types of in-store experiences, by age, February 2019
- Nearly all omnichannel shoppers can be reached with five types of experiences
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- Figure 55: TURF analysis – Types of in-store entertainment, February 2019
Key Players – What You Need to Know
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- Omnichannel isn’t an option, it’s a mandatory
- Transforming for omnichannel shoppers isn’t easy or cheap
- Stores are a critical part of omnichannel, but there isn’t enough room for them all
- Ecommerce expands to encompass mobile, voice and social
Who’s Leading?
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- Large retailers with deep pockets have an advantage when it comes to omnichannel
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- Figure 56: Walmart Big Game Commercial – Grocery Pickup – Famous Cars (Extended Cut), January 2019
Key Challenges
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- Channel-centric versus consumer-centric
- Omni doesn’t mean being all things to all people
- Being truly omnichannel comes at a cost
What’s Next?
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- As one door closes, another opens
- Emerging forms of commerce
- Delivery by drones
- AI continues to shape...everything
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- TURF methodology
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 57: Total US retail sales, at inflation-adjusted prices, 2013-23
- Figure 58: Total US retail ecommerce sales and forecast, at inflation-adjusted prices, 2013-23
- Number of households with children reaches lowest point in a decade
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- Figure 59: Households, by presence of own children, 2008-18
- More people are living alone
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- Figure 60: Single-person households, 2008-18
- Figure 61: Median household income, in inflation-adjusted dollars, 2007-17
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- Figure 62: US gasoline and diesel retail prices, January 2007-March 2019
- Figure 63: Percentage of total retail sales by kind of business – Grand total and with some sector exclusions, 2018
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- Figure 64: Total US retail sales excluding gas stations, at current prices, 2010-18
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Appendix – The Consumer
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- Figure 65: Table – TURF Analysis – Types of in-store entertainment, February 2019
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