Canadian Retailers: Physical Stores Remain Key Customer Engagement Tool

Retailers focusing on brick-and-mortar storesIn this marketing world of online, mobile, and social media, customers have, thanks to rapidly changing technology, a myriad of choices at their disposal that they can use to make a purchase.

While online and mobile have changed the marketing world, 70% of Canadian retailers say more than half of their sales occur in physical stores.

According to a new study released today by Deloitte and Tulip Retail titled, Retail’s Omnichannel Omnichallenge, retailers in Canada are building omnichannel strategies based on the foundation of brick-and-mortar stores.

Through loyalty programs and sales associates, the study shows that retailers are investing in strategies to drive and maintain store traffic for sustainable growth across all channels.

Of respondents surveyed, 70% currently have loyalty programs, while 40% plan to spend more on these programs over the next 12 months.Retailers driving store traffic

What’s more, retailers are acknowledging sales associates’ importance in stores, with 62% saying the role of associates is to build long-term customer relationships; 61% say they should give advice and recommendations; and 54% say they should provide personalized services.

“We’re seeing retailers start to build the basis of an omnichannel strategy with in-store initiatives, but many are confused on how to start the process,” said Ali Asaria, CEO of Tulip Retail. “With these types of logistical roadblocks, retailers are slow to get their omnichannel plans off the ground, which presents even more challenges as consumers’ shopping habits continue to evolve.”

When asked who is in charge of making omnichannel decisions, survey responses varied across departments with no clear leader:

33% say operations

19% say IT

14% say marketing

13% say strategy

12% say digital/ecommerce

The study also found supply chain operations and lagging IT capabilities as major stumbling blocks for implementing omnichannel strategies. Ineffective marketing, lack of executive consensus, budgetary constraints, and resource limitations are slowing down effecting a major omnichannel change, according to the study.

“Leadership is critical to building an effective omnichannel strategy that integrates a network for physical stores and ecommerce along with convenient options for delivery and returns,” said Jennifer Lee, National Retail and Omnichannel Leader for Deloitte in Canada. “Clear ownership accelerates progress so retailers can prioritize the project that will have the most impact, delegate the right internal resources and then grow a team to deliver a memorable brand experience.”

Nearly half of Canadian retailers surveyed said they now compete with Internet-only retailers through price-matching. To keep consumers spending their money in Canada, retailers are focusing on the following key initiatives:

Developing knowledgeable in-store sales staff: While less than 40% of retailers provide sales associates with mobile technology, they are seeing value in equipping associates with technology to effectively execute the in-store retail strategy

Defining a brand experience: 53% of respondents believe building a more recognizable brand will enable them to stay competitive with Internet-only retailers

Investing in the store of the future: 51% are deploying in-store initiatives to drive sales; 47% are planning ship-from-store distribution

Leveraging analytics and customer relationship management: Almost 30% are investing in analytics to build customer loyalty

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