How digitalization is shaping the Swiss retail trade
Editorial
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July 3, 2017
Digitalization has had a significant impact on customer behaviour in the Swiss retail sector in recent years. The sale of products is increasingly shifting to the internet, resulting in high growth rates in online business: in 2016 alone, the value of goods purchased online in Switzerland increased, increased by 6.1% to CHF 6.5 billion. Although the online share of total retail sales is still relatively modest at 7%, the trend is clearly pointing upwards, although the impact of digitalization on consumer behaviour goes far beyond online retail. In a representative online survey of 2,000 people living in Switzerland, 83% of respondents stated that they generally use digital devices (smartphone, iPad, laptop, etc.) when shopping, either before, during or after their visit to the store. The devices are used to purchase products, search for information (e.g. price, product comparison), submit reviews, arrange a pick-up or delivery date or get in touch with customer service. "Digitalization has significantly changed consumer behaviour in the retail sector in recent years. Anyone thinking only of online sales is underestimating the development. The boundary between online and offline customers is becoming blurred. As a result, in-store retail sales are also heavily influenced by digital devices and online channels," says Konstantin von Radowitz, Head of Consumer & Industrial Products at Deloitte in Switzerland. "There is often talk of the increasing importance of online sales. But retailers should also focus more on the use of digital technologies in the offline area. "The digital impact factor shows how strongly the use of digital devices influences retail sales in stores. Retail sales in Switzerland amounted to CHF 93.9 billion in 2016. Of this, online sales accounted for CHF 6.5 billion (7%) and stationary sales for CHF 87.4 billion (93%). Of this CHF 87.4 billion, CHF 25.5 billion was influenced by the use of digital devices (see shaded area in the figure). The digital influence factor in Switzerland therefore amounts to 29%. By way of comparison, it amounts to 30% in Germany and as much as 56% in the USA. "Digital devices have a considerable influence on in-store sales: The proportion of stationary sales that are digitally influenced (CHF 25.5 billion) is almost four times as high as the pure online sales (CHF 6.5 billion) of Swiss retailers. Anyone who views online as merely an extended sales channel is therefore underestimating its importance and scope," continues Konstantin von Radowitz.Search online, buy offlineThe ROPO effect ("research online, purchase offline") is the best example of this. It refers to customers who find out about a product online and then buy it in a store. The ROPO effect appears to be particularly pronounced in Switzerland. This is indicated by the still relatively low share of online sales in retail as a proportion of total sales (7%) and the widespread use of digital devices before going into the store. Visibility on online channels is therefore very important for retailers, as it has a direct influence on customer frequency in the store. Those who find the right information online are also more likely to visit the store.The growing influence of social media on purchasing decisionsThe influence of social media on purchasing decisions is also increasing: For one in five consumers, channels such as YouTube, Facebook, Instagram and blogs have a medium to large influence on the purchase decision. Konstantin von Radowitz comments: "The more consumers get information about products online, the more often they turn to social media. Retailers should therefore not only focus on their own digital channels such as websites and apps, but also work on their social media presence."What should Swiss retailers focus on?The potential for Swiss retailers to optimize the customer journey with the help of digital technologies is huge. The following aspects are central to this:- Mobile websitesThe focus should not only be on the online store. It is crucial that the online presence supports the visit to the store, for example with individualized information on the product range, details on availability, reviews or even price comparisons. Digital solutionsthat make stationary shopping as simple and efficient as possible: In terms of payment, these include mobile payment or self-checkout machines, for example. New technologiesAugmented reality or indoor navigation, for example, can be used to enhance the customer experience - both offline and online. It is then no longer "just" about buying a product, but about the entire experience surrounding the purchase.https://www.youtube.com/watch?v=zhII9oor32k
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Digitalization has had a significant impact on customer behaviour in the Swiss retail sector in recent years. The sale of products is increasingly shifting to the internet, resulting in high growth rates in online business: in 2016 alone, the value of goods purchased online in Switzerland increased, increased by 6.1% to CHF 6.5 billion. Although the online share of total retail sales is still relatively modest at 7%, the trend is clearly pointing upwards, although the impact of digitalization on consumer behaviour goes far beyond online retail. In a representative online survey of 2,000 people living in Switzerland, 83% of respondents stated that they generally use digital devices (smartphone, iPad, laptop, etc.) when shopping, either before, during or after their visit to the store. The devices are used to purchase products, search for information (e.g. price, product comparison), submit reviews, arrange a pick-up or delivery date or get in touch with customer service. "Digitalization has significantly changed consumer behaviour in the retail sector in recent years. Anyone thinking only of online sales is underestimating the development. The boundary between online and offline customers is becoming blurred. As a result, in-store retail sales are also heavily influenced by digital devices and online channels," says Konstantin von Radowitz, Head of Consumer & Industrial Products at Deloitte in Switzerland. "There is often talk of the increasing importance of online sales. But retailers should also focus more on the use of digital technologies in the offline area. "The digital impact factor shows how strongly the use of digital devices influences retail sales in stores. Retail sales in Switzerland amounted to CHF 93.9 billion in 2016. Of this, online sales accounted for CHF 6.5 billion (7%) and stationary sales for CHF 87.4 billion (93%). Of this CHF 87.4 billion, CHF 25.5 billion was influenced by the use of digital devices (see shaded area in the figure). The digital influence factor in Switzerland therefore amounts to 29%. By way of comparison, it amounts to 30% in Germany and as much as 56% in the USA. "Digital devices have a considerable influence on in-store sales: The proportion of stationary sales that are digitally influenced (CHF 25.5 billion) is almost four times as high as the pure online sales (CHF 6.5 billion) of Swiss retailers. Anyone who views online as merely an extended sales channel is therefore underestimating its importance and scope," continues Konstantin von Radowitz.Search online, buy offlineThe ROPO effect ("research online, purchase offline") is the best example of this. It refers to customers who find out about a product online and then buy it in a store. The ROPO effect appears to be particularly pronounced in Switzerland. This is indicated by the still relatively low share of online sales in retail as a proportion of total sales (7%) and the widespread use of digital devices before going into the store. Visibility on online channels is therefore very important for retailers, as it has a direct influence on customer frequency in the store. Those who find the right information online are also more likely to visit the store.The growing influence of social media on purchasing decisionsThe influence of social media on purchasing decisions is also increasing: For one in five consumers, channels such as YouTube, Facebook, Instagram and blogs have a medium to large influence on the purchase decision. Konstantin von Radowitz comments: "The more consumers get information about products online, the more often they turn to social media. Retailers should therefore not only focus on their own digital channels such as websites and apps, but also work on their social media presence."What should Swiss retailers focus on?The potential for Swiss retailers to optimize the customer journey with the help of digital technologies is huge. The following aspects are central to this:- Mobile websitesThe focus should not only be on the online store. It is crucial that the online presence supports the visit to the store, for example with individualized information on the product range, details on availability, reviews or even price comparisons. Digital solutionsthat make stationary shopping as simple and efficient as possible: In terms of payment, these include mobile payment or self-checkout machines, for example. New technologiesAugmented reality or indoor navigation, for example, can be used to enhance the customer experience - both offline and online. It is then no longer "just" about buying a product, but about the entire experience surrounding the purchase.https://www.youtube.com/watch?v=zhII9oor32k
