— June 30, 2017
Online shopping is slowing down. The latest figures for May, show that even in the UK where online retail is way ahead of much of the rest of the world, the pace of change is slowing.
Several years ago, there were predictions that shops would close and the High Street would be wiped out before the turn of the century. It hasn’t happened. Even though there are pressures on bricks and mortar retailers because of the Internet, the High Street is alive and well. Indeed, even the giant of online retail, Amazon, is so convinced that the High Street has a future that it is busy building real-world bookstores and buying traditional retailers. If Amazon thinks it is worth while investing billions in bricks and mortar shopping, you can be sure that online retail is pretty much at saturation point. Amazon is having to look offline to grow.
Even with massive growth in online retail in recent years, it still only represents about 10-15% of all consumer purchasing in the UK. In other countries, it is much lower – Britain is one of the places where online shopping has truly caught on. We buy six times as many groceries online as people in the USA, for instance. Yet 94% of all UK grocery shopping is conducted in the real world. Worse still for those trying to make a living out of online retail, according to the Office for National Statistics, 78% of all online shopping is NOT in stores. That means almost everything we buy online is from individual websites, rather than Internet shops – unlike our love for real-world shopping where we frequent the multiples more than anything else.
Convenience is not everything
Online shopping is undeniably convenient. You can buy things with little effort, you don’t have to drive into town or pay for car parking. You can stay dry if it is raining outside and you don’t even have to go to the bother of washing and dressing because you can shop in your jim-jams. Yet, in spite of these obvious benefits of online shopping, we prefer to buy almost everything from bricks and mortar stores in the real world.
Convenience is only one aspect of shopping. It is what online shopping cannot provide that attracts us to real-world retailers. A new study from MoodMedia has found that one of the key reasons we prefer real-world shopping over buying things online is because we can touch the objects we might want to buy. More than 70% of people want to touch things before they buy them. You cannot check the freshness of groceries when you buy them online, but you can in a real-world supermarket.
Importantly, what the MoodMedia study revealed was that real-world shopping provides us with an experience, which we cannot easily match with online shopping. People like the smells and sounds of real-world stores, for instance. Also, when you look at people shopping in real-world stores you frequently see them in groups. Real-world shopping is a social experience, with family or friends. You can’t easily do that online.
However, according to the research, the main thing that people detest with real-world shopping is queuing to pay. That’s where the convenience of online retail wins – there are no queues. So, real-world retailers could improve their situation against the competition of online if they ensured that checkout queues were removed. Amazon is going to make that possible soon with Amazon Go, a supermarket that has no checkouts; you just get your stuff and walk out of the store. All you will need is the Amazon app on your phone and technology will do the rest. Everything you put in your basket will be added to your bill automatically. Amazon is about to remove the number one issue that people have with real-world shopping.
So, if you are in online retail you are going to face competition. As more and more stores use technology to lure people back into the real world environment, there will be pressure on online retailers. Indeed, it’s possible we may already be at the peak of online retail success.
How online retailers can fight back
The key reason people like online shopping is its convenience. However, in terms of experience, it is pretty poor. All you can really do is sit at home, balance your laptop on your knee and buy a few things. It might sound comfortable, but nowhere near as enjoyable as touching things, having a visual, auditory and olfactory experience in a lovely store, and doing it all with your friends, having an enjoyable time.
If you run an online store, then it is the experience you need to focus on. People already get the convenience of online shopping. That’s a given, these days. What people want to lure them away from real-world shopping is a multisensory online experience. Gentle background music as they wander around an online fashion store could work. So too could additional imagery – instead of just product images, photos of the products being used, or the environment in which they are likely to be used would help. You can’t (yet) add smells to your website, but you can use words that evoke memories of smells and atmospheres. Instead of typical perfunctory copy on your online store, you need creative writing that engages emotions.
Online retailers need to act. After several years of extensive growth in Internet shopping, there are signs that this is slowing down. There is increased resistance to online shopping because it lacks the experience of a real-world store. Not only that, but real-world retailers are fighting back, making their stores more convenient and less prone to queues. That means people will be tempted back into stores after a dalliance with online.
If you sell things online, it’s time to start improving the experience that people have in your store. The real-world is about to compete with you more than before.