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Omnichannel Retailing - US - May 2019

Covered in this report

This report examines the interplay of the online and offline shopping environment, including how consumers shop both online and off, and how retailers are responding to changing behaviors to provide a unified and consistent experience across both physical and digital touchpoints. The focus of this report is on tangible goods; digital media, travel, entertainment, insurance policies, and other intangible products are not the main subjects of this report.

This report builds on the analysis presented in Mintel’s Online Shopping – US, June 2018 as well as its ecommerce library of reports launched in 2018.

"There are a few common elements of omnichannel retailing that include integration across devices as well as putting mobile at the center as the connective tissue that merges stores and digital channels. Brick and mortar retailers also have an advantage over online-only retailers because their stores are a huge asset that most of the leaders are capitalizing on as they look to make the store experience more enjoyable and fun. What omnichannel really boils down to though is elevated convenience for today’s channel-agnostic shoppers."
- Diana Smith, Associate Director - Retail & Apparel

This Report looks at the following areas:

  • The state of the retail
  • Defining omnichannel shoppers
  • Drivers and barriers
  • Key trends
  • The role of technology

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • 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

                                          • Omnichannel is not a trend, it’s the “way we shop”
                                              • Figure 1: Shopping method, February 2019
                                            • Four out of five consumers are multichannel shoppers
                                              • Figure 2: Multichannel shopping, by generation, February 2019
                                              • Figure 3: Multichannel shopping, by household income, February 2019
                                          • The Market – What You Need to Know

                                            • 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

                                                      • Retail industry continues to post gains
                                                        • 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
                                                        • 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

                                                      • Five sectors encompass three out of four retail sales
                                                        • Figure 9: Percentage of total retail sales by kind of business, 2018
                                                      • Clothing and accessories top digital sales
                                                        • Figure 10: Share of ecommerce sales, by product category, 2016 and 2018
                                                    • Market Factors

                                                      • Economy
                                                        • Macroeconomic indicators mostly positive for retail industry
                                                          • Figure 11: Consumers’ plans for tax refunds, February 2019
                                                          • Figure 12: GDP change from previous period and consumption expenditures, 2007-18
                                                          • Figure 13: Disposable personal income change from previous period, January 2007-January 2019
                                                          • Figure 14: Consumer confidence and unemployment, 2000-March 2019
                                                          • 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
                                                              • Figure 16: Population by generation, 2018
                                                            • The youngest generations are also the most diverse
                                                              • 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
                                                                    • Figure 18: Devices used to access the internet, February 2019
                                                                • The Consumer – What You Need to Know

                                                                  • 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

                                                                                • Online for browsing, stores for purchasing
                                                                                  • Figure 19: Shopping methods, by shopping scenarios – Net, February 2019
                                                                                • Opportunity to drive impulse purchasing online
                                                                                  • Figure 20: Shopping methods, by shopping scenarios, February 2019
                                                                              • Shopping Method by Item

                                                                                • CPG categories lag when it comes to multichannel shopping
                                                                                  • Figure 21: Multichannel shopping versus single-channel shopping, by item, February 2019
                                                                                • Searching and buying channel preferences closely mirror each other
                                                                                  • Searching
                                                                                    • Figure 22: In-store versus online shopping, by item – Part one, February 2019
                                                                                    • Figure 23: In-store versus online shopping, by item – Part two, February 2019
                                                                                    • Figure 24: In-store versus online shopping, by item – Part three, February 2019
                                                                                  • Buying
                                                                                    • Figure 25: In-store versus online buying, by item, February 2019
                                                                                  • Shopping for replenishment purposes more likely to be confined to one channel
                                                                                    • Figure 26: Online searching versus buying, by select items, February 2019
                                                                                • Channel Drivers

                                                                                  • In-store wins on everything but price and convenience
                                                                                    • Figure 27: Channel drivers, February 2019
                                                                                    • Figure 28: Channel preferences for customer service, product quality and reliability, by age, February 2019
                                                                                  • Both channels have merit when it comes to speed
                                                                                    • Figure 29: Channel preference for speed, by age, February 2019
                                                                                  • Stores move toward experiential retailing
                                                                                    • Figure 30: Everlane Cashmere Tour event social media promotion, December 2018
                                                                                  • Shoppers go online when looking for convenience and a better deal
                                                                                    • Figure 31: Channel preference for speed, by age, February 2019
                                                                                • Omnichannel Shopping Behaviors

                                                                                  • When it comes to digital tools and tech, younger consumers lead the way
                                                                                    • Figure 32: Engagement with/interest in omnichannel offerings, by age, February 2019
                                                                                  • Use of tech
                                                                                    • Leading with digital to transform physical
                                                                                      • Figure 33: Use of in-store digital devices, February 2019
                                                                                    • Cashierless tech
                                                                                      • Figure 34: Amazon Go demonstration, May 2019
                                                                                      • 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
                                                                                          • Figure 36: Purchasing online and picking up or returning to a store, by parental status, February 2019
                                                                                      • Use of Mobile

                                                                                        • Nearly four in 10 shoppers consult their mobile device while shopping in-store
                                                                                          • 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
                                                                                          • Figure 38: Reasons for using mobile device in-store, February 2019
                                                                                          • Figure 39: Reasons for using mobile device in-store, by generation, February 2019
                                                                                        • Store associates increasingly empowered with mobile devices
                                                                                          • Figure 40: Interaction with tech-enabled store associates, February 2019
                                                                                      • Attitudes toward Omnichannel Offerings

                                                                                        • Channel consistency matters
                                                                                          • Figure 41: Attitudes regarding pricing strategies by channel, February 2019
                                                                                        • Younger consumers will share personal information to get customized recommendations
                                                                                          • Figure 42: Attitudes regarding personalization, by age, February 2019
                                                                                      • Attitudes and Behaviors toward Buy Online, Pick Up In-store Services

                                                                                        • Consumer interest is there, but BOPIS not seen as a mandatory
                                                                                          • Figure 43: Engagement or interest in option to purchase online and pick up in-store, February 2019
                                                                                          • Figure 44: Important factors when deciding whether or not to buy online, November 2018
                                                                                        • Saving money and time are key benefits
                                                                                          • Figure 45: Top five motivations to use buy online, pick up in-store services, February 2019
                                                                                        • Satisfaction is high
                                                                                          • Figure 46: Walmart grocery pickup direct mail, April 2019
                                                                                          • Figure 47: Buy online, pick up in-store shopping experience, February 2019
                                                                                        • Retailers are testing various approaches to BOPIS
                                                                                        • Delivery Preferences

                                                                                          • Delivery options expand to meet consumers on their terms
                                                                                            • Figure 48: Delivery preferences, February 2019
                                                                                          • Consumers want flexibility and choice
                                                                                            • Figure 49: Interest in delivery enhancements, February 2019
                                                                                          • Young men most open to new forms of delivery
                                                                                            • Figure 50: Interest in delivery enhancements, by gender and age, February 2019
                                                                                        • Preferred Types of In-store Experiences

                                                                                          • It’s all about elevated convenience and fun
                                                                                            • Figure 51: Reasons for shopping at a physical store, February 2019
                                                                                          • Event-based experiences can draw audiences to stores
                                                                                            • Figure 52: Ikea Facebook ad, May 2019
                                                                                            • Figure 53: Types of in-store experiences, February 2019
                                                                                          • Technology and social opportunities can draw younger consumers to stores
                                                                                            • Figure 54: Select types of in-store experiences, by age, February 2019
                                                                                          • Nearly all omnichannel shoppers can be reached with five types of experiences
                                                                                            • Figure 55: TURF analysis – Types of in-store entertainment, February 2019
                                                                                        • Key Players – What You Need to Know

                                                                                          • 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?

                                                                                                  • Large retailers with deep pockets have an advantage when it comes to omnichannel
                                                                                                      • Figure 56: Walmart Big Game Commercial – Grocery Pickup – Famous Cars (Extended Cut), January 2019
                                                                                                  • Key Challenges

                                                                                                      • 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?

                                                                                                            • As one door closes, another opens
                                                                                                              • Emerging forms of commerce
                                                                                                                • Delivery by drones
                                                                                                                  • AI continues to shape...everything
                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                    • Data sources
                                                                                                                      • Sales data
                                                                                                                        • Fan chart forecast
                                                                                                                          • Consumer survey data
                                                                                                                            • TURF methodology
                                                                                                                              • Direct marketing creative
                                                                                                                                • Abbreviations and terms
                                                                                                                                  • Abbreviations
                                                                                                                                    • Terms
                                                                                                                                    • Appendix – The Market

                                                                                                                                        • 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
                                                                                                                                        • Figure 59: Households, by presence of own children, 2008-18
                                                                                                                                      • More people are living alone
                                                                                                                                        • Figure 60: Single-person households, 2008-18
                                                                                                                                        • Figure 61: Median household income, in inflation-adjusted dollars, 2007-17
                                                                                                                                        • 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
                                                                                                                                        • Figure 64: Total US retail sales excluding gas stations, at current prices, 2010-18
                                                                                                                                    • Appendix – The Consumer

                                                                                                                                        • Figure 65: Table – TURF Analysis – Types of in-store entertainment, February 2019

                                                                                                                                    Omnichannel Retailing - US - May 2019

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