Online to offline: The new frontier for single-channel retail

Linah Maigurira / December 2019

The retail industry is going through a transformation that is driven by customers who expect a seamless experience between online and in-store. These customers are looking for tools that can make recommendations or better help them find what they need.

Consumers are increasingly turning to online channels to make purchases that they traditionally would have made in brick-and-mortar stores. The former reality of retail, where everything was anchored around the physical store and foot traffic directed retail decision-making is changing. This shift is in large part due to the fact that digital technology has changed how we interact with the world.

Today’s consumer shops “anytime and anywhere” on smartphones, tablets, and laptops. The advent of the smartphone has had tremendous impact on how consumers shop and interact with brands. In South Africa, where 98% of sales still take place in a brick-and-mortar store, marketers underestimate how much pre-sales behaviour takes place online.

Digital is a critical touchpoint before a store visit and South African consumers do not lag behind their global counterparts when it comes to researching products online before making a purchase offline.

In South Africa, where 98% of sales still take place in a brick-and-mortar store, marketers underestimate how much pre-sales behaviour takes place online.

How South African consumers shop

In Google's 2019 Consumer Shopping Research Report with Ipsos,1 we found that over 65% of South African consumers are using mobile to research online prior to making a purchase. Furthermore, they shop, on average, seven categories concurrently in a week. Another insightful callout: over 40% of South African consumers check online whether a product is available in a local store before visiting a retail location.

For marketers, this presents a huge opportunity as well as challenges. How can we keep the consumer experience simple and seamless? How do you reach and stay with someone with a non-linear user journey? How can we leverage new technology in a profitable and scalable manner?

How to reach your customers at the right time

Without automation and machine learning, it would be very challenging to buy media that reaches the consumer at the right time throughout the shopping journey. And at peak marketing times, such as Black Friday, optimising your media mix for optimal reach across digital and offline channels is crucial.

Machine learning offers retailers the chance to fulfil the need to follow the customer along her journey. Artificial intelligence (AI) is deeply transformational, and it is allowing us to prepare for a future where everyone is connected and has higher expectations. With this in mind, Google has developed Local Campaigns, to connect omnichannel consumers with businesses nearby.

Local Campaigns combines the advantages of machine learning and AI. The retailer or business provides basic info such as a logo, store locations, trading hours, and in-store promos. These are served to potential customers when they find themselves near the retailer's physical location. The system also generates automatically optimised bids, ad placements, and asset combinations to maximise online presence.

Product information within Local Campaigns enables advertisers to showcase in-store promotions to entice users to visit their stores. Similar to circulars or pamphlets, advertisers have the control and flexibility to select the products that appear within the format.

Harnessing the power of data

Retailers who combine Google data with their own data in smart marketing campaigns are reaping the benefits. One example is a local omnichannel retailer that has an online site and brick-and-mortar superstores across South Africa.

This mass retailer uses Google Cloud to link its existing data about online and offline shoppers to optimise its omnichannel marketing investments. As a result, the retailer has experienced a 15X increase in the performance of Google Ads, and discovered that 55% of its in-store purchases began on a mobile device. This has, among other benefits, allowed the company to reduce inventory carryovers by 50%, and has improved its demand planning.

Consumers will choose whichever journey suits them best but this shouldn't worry you if ensure you’re present at the moment they are near your location. This is why an online to offline strategy is so essential. Not having an omnichannel offering could cause you to miss out on 20-30% of potential buyers in select categories.

From omnichannel to single channel strategy

The fundamentals of shopping remain simple: the consumer wants a product, wants to investigate it, and wants to buy it. Luckily, retailers have far more data than they think they do, particularly if they choose to use their existing data to first understand their customers, and then to market to them. To reiterate, the future belongs to retailers who own the pre-store experience.

If you connect the systems that make this possible through the cloud, it binds all your channels together. This transforms your marketing strategy from an overwhelmingly complex “omnichannel” approach into what is, essentially, a single channel that you can easily manage.

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Linah Maigurira

Linah Maigurira

Retail Industry Lead Google Sub-Saharan Africa

Sources (1)

1 Google/Ipsos, Global Retail Study, Online survey, South Africa online population 18+ who shopped in the last week (n=496), Mar 2019