As online sales boom, retailers face shifting terrain

A new study shows just how important to retailers the Internet, and increasingly mobile technology, has become. According to a global survey of 30,000 consumers by IBM (IBM), during the recent holiday season 72 percent of consumers made their last non-grocery purchase at a physical store, down from 84 percent the previous year. 

"Consumers are feeling more and more comfortable going directly to the Web," said Jill Puleri, IBM retail global industry leader. "The other part is how important the idea of mobile was."

According to the company, which tracked the online performance of 800 retailer websites, 40 percent of Internet traffic came from a mobile device. Puleri attributed that to retailers getting better at optimizing sites for whatever type of device -- desktop, laptop, tablet or smartphone -- the consumer used, with buttons, navigation, images and other aspects of the interface geared to create a device-specific experience.

The challenge for retailers? Finding a proper balance between how they serve in-store customers with the growing number who are content to shop online. As IBM's findings show, that goal is a moving target, with many companies struggling to cope with how quickly the retail landscape is changing.

Take the concept known as "showrooming," in which consumers shop in a store, compare prices online and then order a product over the Internet. Even early last year, experts thought that showrooming posed a serious danger to e-commerce giants like Amazon (AMZN).

IBM's numbers paint a somewhat different picture. In one sense, showrooming was up in 2013: 8 percent of consumers employed that approach, versus 6 percent in 2012. However, in 2012 nearly half of all online purchases came from showrooming, versus 30 percent this past holiday season. That means 70 percent of online buyers skipped going to the mall altogether and went directly to the Web. In short,  showrooming could already be on the decline.

Another example is apps. "Two years ago, if you asked me, every CEO was saying, 'I need an app,' " Puleri said. But instead many shoppers still seem content to use "old-fashioned" browsers, undercutting businesses' assumptions that for consumers these days it's all about mobile.

Lots of retailers have increasingly focused on getting consumers' mobile phone numbers, with Puleri noting that 68 percent of people give vendors a secondary or false email address when they're asked to provide one. Retailers hope that sending text messages is a better way to connect with shoppers -- at least until consumers start tuning out texts as they have emails.

According to IBM, what consumers really want from retailers is convenience across every commercial "channel," whether online, phone  or in-store. According to the study, the top five features people are looking for in a retailer are (in order of importance):

  • Consistent prices across sales channels
  • Ability to track an item if out of stock
  • Tracking by order
  • Consistent product assortments across channels
  • Ability to return online purchases to a store

Retailers that want to remain effective must satisfy these demands, or pay the price.

  • Erik Sherman On Twitter»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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