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Why marketers shouldn't be too quick to switch to virtual-only strategies

Crawford Davidson, managing director, Go Inspire Group, shares insight on data relating to the balance between online and offline shopping and how it will evolve in the future across different retail sectors.

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December 12, 2019

By Crawford Davidson, managing director, Go Inspire Group

In a world of same-day deliveries, it is easy to presume all aspects of our purchasing habits are rushing down the same inevitable path toward a totally virtual existence.

Ordering take-away food online has grown 300% faster than dine-in traffic in the past five years. So, while clearly there is a growing appreciation for knowing that home-delivered Vietnamese Pho is just a few clicks away, what if other retail areas were heading in a different direction?

By 2020, restaurants that don't offer online food ordering and delivery will lose over 70% of customers — so it's important for businesses to keep up with the times. But does this mean that dining is going to become an entirely remote experience? With 76% of consumers stating they are likely to dine at a restaurant if they had previously enjoyed an online delivery from there , a savvy combination of digital and bricks and mortar marketing should be viewed as a tool to attract more customers.

At Go Inspire, we decided to dig deeper on this topic and commissioned some research about how the balance between online and offline shopping would evolve in the future across different retail sectors. We had a third party ask 1000 respondents how they predicted their shopping habits may evolve in the next five years. The data clearly maps out the pace of the 'online drift' in five years time for a total of 13 different studied retail sectors.

To gain a better understanding of the population's expected shopping trends and preferences, the research also made a distinction between responses across different age demographics. This allowed us to shine a light on trends among Generation Z respondents (aged 18-24), who make up an increasingly large portion of the purchasing population.

Developing a clear understanding of digital natives' preferences, while being sure to stay clear of stereotypes, is key to any businesses hoping to cater for the 'customers of the future'. The results took the form of a percentage score which indicates either an increase or decrease in online purchasing preference between now and 2024.

In many areas, the predicted shift toward online shopping was confirmed. Mobile phones, computers and electronics, for instance, will increasingly be bought online, with a 9% increase in online purchases for this category. Sports equipment and clothing will also see a 6% rise in online purchases among the general population, and an even more significant 11% increase from the Generation Z proportion of respondents.

Importantly, while these results demonstrate an expected increase, the pace of this increase is far less dramatic that the frequently presumed rate. Similarly, online purchases are often spurred by a trip to the store — so maintaining all marketing channels is important.

Businesses falling under these categories should adapt their marketing efforts accordingly — recognizing the growing importance of online mediums but being careful not to abandon all traditional forms based on assumptions of a rapidly evolving online retail domination.

In fact, some of the retail categories studied actually showed signs of a reversal in online shopping for that particular product category. More concretely, a negative percentage score indicated not just an indifference toward the online shopping movement, but an actual resistance in the form of a revival of in-store purchases.

Most significantly, fresh foods and non-perishable foods are expected to see the largest decline, with a 12% and 9% fall respectively. Seemingly, there is still a clear appreciation for the act of pushing a shopping trolley around supermarket aisles and personally selecting items off the shelves. This also applies to the younger generation of respondents who predicted a 4% increase in their own offline food shopping. Also showing similar future trends are gardening products, shoes, alcohol, household products and personal hygiene products.

Against all expectations, some categories show a remarkable reticence to move online and a clear tendency to move towards bricks and mortar shopping.

How should marketers respond to these results? Firstly, it is crucial businesses do not presume that their retail sector will be swept up in an 'online drift' at the same pace as other industries — or at all! Evidently, even younger shoppers show a willingness to continue the traditional shopping experience and transferring all marketing efforts to fit a presumed preference for digital commerce would not only be ineffective but also detrimental to the business.

Furthermore, the role of non-digital channels such as direct mail in prompting in-store and online purchases should not be underestimated and left out of the equation. Businesses should also consider that even though busy modern lives often tend well to online shopping, these decisions may only be a result of practicality, rather than a reflection of actual consumer preferences.

Brands are encouraged to use the findings of this research and their own customer data to re-evaluate the balance between online and offline sales channels over the next five years, with an awareness that their clients may not necessarily follow the same purchasing trends as the rest of the purchasing population.