Online shoppers fundamentally disrupt retail

As digital disruption continues to upend retail and global consumers are more empowered than ever, retailers are struggling to remain relevant, according to the PwC ‘Total Retail Survey 2016’.

In PwC’s most comprehensive Total Retail survey to date, they asked nearly 23,000 online shoppers around the world about issues ranging from mobile shopping to social media influence to innovation at retailers. Their answers reveal the changing behaviours that will drive the next retail revolution.

The speed of technology adoption has raised the stakes for both retailers and their consumer packaged goods partners.

“It is nothing short of a revolution, and the stakes have never been higher for retailers and consumer goods companies. Our Total Retail survey results, together with 2015 fourth- quarter retail results around the world, point to 2016 as a watershed for many of the trends that have been percolating over the past few years.

“From the unmistakable desire to be a member of a specialised retail community to buying more on their mobile phones, from becoming more reliant on social media to demanding a more service-focused and knowledgeable store employee, global consumers are pushing the boundaries of what shopping means,” according to the survey.

PwC’s Global Retail and Consumer practice, in conjunction with PwC’s Research to Insight (r2i), administered a global survey to understand and compare consumer shopping behaviours and the use of different retail channels across 25 territories: Australia, Belgium, Brazil, Canada, Chile, China/Hong Kong, Denmark, France, Germany, India, Italy, Japan, Malaysia, Mexico, Middle East, Poland, Russia, Singapore, South Africa, Spain, Switzerland, Thailand, Turkey, the United Kingdom and the United States.

Many retailers are betting that the desire for community among shoppers will only get more pronounced. Many of the most innovative of these initiatives bridge the physical and online worlds.

For example, the upscale US department store chain Nordstrom, with a well- deserved reputation for innovation, created strong engagement with customers through the popular social media site Pinterest.

Store items that are frequently “pinned” on the site are physically highlighted with a red tag bearing the Pinterest logo and prominently displayed in the store. So with no need for any formal sign-up or customer membership details, Nordstrom used the social activity surrounding its products to create an informal “in the know” community, while building a greater understand.

The survey notes that for those retailers with the wherewithal to invest, there is plenty of room to become known as a leading innovator.

If 2015 was the year of mobile, it was also the year of social media. While social media is still in its nascent stages as a driver of online purchasing, its growth in both pure  social-driven retail sales and referral  traffic is undeniable, outpacing all  other online channels. When looking at the top 500 retailers in the US for example, the $3.3 billion in sales from social shopping in 2014 marked a 26percent increase from 2013, according to the Internet Retailer’s Social Media 500. This growth is well ahead of the roughly 16pecent growth rate for the overall e-commerce market in the US.