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Ecommerce grows over physical commerce in US

The gap between ecommerce and physical commerce has shrinked in 2016, as retailers seek to leverage better fulfillment options, local advertising tools, offline attribution and omnichannel tools.

This conclusion is provided by a new eMarketer report, US Holiday Ecommerce Preview 2016: Mobile to Fuel Explosive Ecommerce Growth.

Mobile is bridging the divide between physical and digital commerce, a trend that should accelerate in 2016 holiday season. Some 45% of shopping trips include some mobile shopping, according to a Facebook IQ study of US internet users conducted in September 2015.

Various barriers, including siloed inventory systems, poor offline attribution and primitive location advertising, have limited the actual online-offline integration. RetailNext measured year-over-year drops in US retail foot traffic each month of 2016, peaking with a 9.9% drop in May 2016.

Many retailers have improved their inventory systems and fulfillment options in 2015. Most large retailers now offer the option to buy online and pick up in-store, although 42% of retailers overall surveyed by Boston Retail Partners in April 2016 offered it, and only about half of those reported delivering a decent experience.

In addition to in-store pickup, better integration of inventory systems allows retailers to ship directly from stores, between stores or directly from manufacturers. All of these innovations have allowed ecommerce to become a viable shopping option right up until Christmas or Hanukkah.

Multichannel Merchant reported that 54% of US retailers and business-to-business (B2B) merchants it studied had a cutoff date of December 21 or later for holiday deliveries in 2015. In 2014, that figure was 38.9%. In fact, 3.2% of respondents in 2015 were able to fulfill online orders as late as Christmas Eve.

Retailer improvements in real-time inventory management open up new possibilities for local product advertising with the express aim of driving foot traffic. US mobile local ad spending is expected to increase to USD 12.8 billion in 2016, according to BIA/Kelsey, and much of this will occur during the holiday season.

These direct response ads with offline calls to action have benefitted as consumers shift their browsing behaviour to mobile devices. Mobile accounted for 58% of search clicks and 40% of search ad spending in retail and consumer goods in North America in Q2 2016, according to study by performance marketing agency Merkle.

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