While there’s plenty of chatter about the demise of traditional retail shopping and the dominance of the e-commerce environment, the reality of today’s retail commerce is not quite so binary. Salesforce’s latest report offers a look at an increasingly complex environment with changing consumer expectations and preferences and complex buying behaviors.

A complex retail environment

Salesforce’s third edition of its “Connected Shoppers Report” draws input from 10,614 respondents from Asia Pacific, Europe, North America, Latin America, the Middle East and Africa. The report’s results are especially timely for the holiday season as retailers ramp up their product offerings, staff, marketing and commerce efforts outreach.

Retailers take the holiday shopping season very seriously, often working months in advance to ensure they can meet consumer needs. In September, Target for instance, announced that it would be looking for more than 130,000 seasonal staffers to help meet consumer demand this year (up from 120,000 in 2018). They’re not even first to the gate — Kohl’s began hiring for this holiday shopping season in July.

Here are some of the key findings of the report and how retailers — both online and off — are likely to be impacted as we move into 2020.

Retailers, brand and online marketplace battle for wallet share  

A digital transformation in retail means that consumers have more choices — and more access — than ever before when it comes to discovering, evaluating and purchasing products they’re interested in. The digital landscape is increasingly blurring the lines between retailers and brands, impacted also by large online marketplaces like Amazon, eBay and Alibaba which, according to the report, represent 47% of online shopping. Retailer websites represent 26%, but brand websites or apps are on the rise representing 18% of the traffic for online purchases.

Consumers point to different reasons for shopping through retailers, brands or via an online marketplace.

“When we hear about the ‘death of retail,’ what’s really being talked about is the death of traditional retail,” says Conor Donegan, Senior Manager, Research and Content for Salesforce. “But retail, itself is far from dying,” he says. “It’s going through transformation.”

Yes, retailers today need a digital presence, Donegan says, but he adds, “They can also drive a lot of value if they bridge digital channels to their existing physical locations — think of the store as an experience hub or a fulfillment hub, in addition to its historic role as a purchase point.”

Shopping evolves as consumers define new terms of engagement

Shopping today, Salesforce suggests, is no longer an event but a process. While, in the past, the retail experience involved checking out at a counter through an interaction with a clerk in real time, today consumers can engage in a 24/7 buying cycle.

The process has become more complex, Salesforce reports, and has moved to “a full spectrum of activities — including research and discovery, browsing and buying, receiving service and becoming a brand advocate”— all activities that can occur online and off. The report identifies four key shifts in shopping behaviors:

• From discrete to embedded. Shopping today doesn’t involve a planned outing; consumers can shop with the click of a finger or a voice command from the comfort of their homes or offices.
• From linear to fragmented. Today’s consumers have a wide range of touchpoints through which they can make their purchasing decisions.
• From analog to digital. Even in-store experiences can be highly digital, the report notes, using the example of the Apple Store where associates help customers use in-store apps and iPads to augment their physical shopping experiences.
• From product to experience. Retailers are drawing consumers to their brick-and-mortar locations not through product, but increasingly through unique experiences that can’t be replicated in another environment, or online. In fact, “83% of consumers say the experience a company provides is as important as its products.”

Consumers are also increasingly responding to individualized shopping experiences — 69% expect companies to understand their unique needs and preferences. The top five traits of their most-loved brands include catering to their unique needs (No. 1) and understanding who they are (No. 5).

There are some key differences in shopping perspectives based on generation.

Shopper journeys move to the edge  

The days of merely pulling consumers into owned physical and digital spaces are over according to the Salesforce report. They point to “shopping at the edge” as the new normal: the increasing engagement in digital destinations that include social media, messaging platforms, voice assistants and other channels.

A wide range of nontraditional touchpoints is emerging impacting discovery and evaluation, buying and service.

This shift to new purchase channels is most predominant among younger consumers — Gen Zers are 3.5x more likely than baby boomers to use tools like messaging apps and voice assistants to “shop”; over half of Gen Z respondents have made purchases directly from an app, a trend that is likely to continue.

Yet despite these new digital options for consumers, brick-and-mortar stores still hold appeal.

Stores remain critical for discovery, experience and fulfillment

For those retailers that have been dreading the impact of digital on their physical retail footprint, there may be good news. Although retailer bankruptcies have been big news over the past few years, respondents indicate that they have been impacted by these closures — and not in a good way. The No. 1 reason they still value the in-store experience: to touch and feel products before they make a purchase. But there are other drivers that can compel consumers to retail locations.

“We may be glued to our smartphones, but we still live our lives in the physical world,” says Donegan. “So shopping, browsing in an aisle, etc., are always going to exist.” But, he adds: “Online shopping has brought shoppers new expectations for tailored, real-time experiences.”

This is particularly true for Gen Z, Donegan says. “Our data shows that in-store experiences are big draws for younger shoppers. So, product demonstrations, classes, meet-and-greets, ad other tactics can both draw in these types of customers while also making them feel special, thereby fostering more brand loyalty.”

Today’s retailers have the opportunity to use digital to drive traffic to their stores, as well. Donegan points to geofencing as a good example of this. “With a shopper’s permission, stores can use a beacon to send push notifications or personalized offers to shoppers when they’re in a specified proximity of a physical stores,” he says. That kind of permission, of course, requires trust, he notes, “and very clear and transparent guidelines on how their location is and isn’t used.”

An interesting holiday dichotomy

Among the interesting findings from this study is the likelihood for growth in both in-store and online experiences during the 2019 holiday season: “83% of consumer plan to shop in-store this season, but two-thirds also plan to buy more from online marketplaces.” It’s not an either-or experience; for today’s shoppers it’s some combination of both. They’ll take their inspiration from a range of digital and traditional sources with, not surprisingly, some key differences based on generation:

As the holiday shopping season kicks into full gear and retailers begin to think about what 2020 might bring, “The Connected Shoppers Report” can provide some interesting glimpses into changing consumer preferences and practices that can be leveraged to engage with consumers wherever they are.

Salesforce is a YPO global strategic partner.