Almost a third of retail sales influenced by the use of digital devices

While the online store is important as a sales channel, it is even more important that Swiss retailers rely on the use of digital technologies offline. 83% of Swiss people generally use a smartphone, iPad or laptop when shopping. For one in five consumers - and even one in three millennials - channels such as YouTube and Facebook have a medium to major influence on the purchasing decision. This is shown by the study "The digital consumer" of the auditing and consulting firm Deloitte.

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 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.

However, 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 pick-up or delivery or contact 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. This is because 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 offline."

The digital influence factor[i] shows the extent to which the use of digital devices influences retail sales in stores. Retail sales in Switzerland amounted to 93.9 billion Swiss francs in 2016. Online sales accounted for CHF 6.5 billion (7 percent) and stationary sales for CHF 87.4 billion (93 percent). 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 is therefore 29%. By way of comparison, it is 30 percent in Germany and as much as 56 percent in the USA.

"Digital devices have a considerable impact 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 just an extended sales channel is therefore underestimating its importance and scope," continues Konstantin von Radowitz.

Search online, buy offline

The 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 the retail sector 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 decisions

The 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. Among millennials, this figure is almost one in three.

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 websites: The 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 solutions that make stationary shopping as simple and efficient as possible: In terms of payment, these include mobile payment or self-checkout machines.
• New technologies: Augmented 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.