Retail has been used as something of a punching bag over the past decade, with headlines frequently painting the massive shift from physical to digital as a death knell for the industry. The term “retail apocalypse,” for instance, is frequently thrown out, referring to the massive shrinking of physical storefronts across North America and how this bodes for the industry at large.

In reality, the situation facing retailers is far less daunting than an “apocalypse.” In fact, it may actually offer brands greater opportunity in the future opposed to the death sentence many analysts have delivered.

In the latest report from Retail Systems Research (RSR) on The State of Online Commerce 2018, the “winners” and “losers” of the retail game were polled to see which channels they think bring the most value. By and large, the brands characterized as “winners” — those seeing steady or increased revenues from their products and services over the past year — put equal investment and faith behind both physical and digital channels for engagement, with an emphasis on success related to retail apps.

As the study — and almost every recent headline on retail — is quick to point out, much of the doom and gloom stems from the encroachment of Amazon into the larger retail conversation. But the actual threat posed by Amazon is largely being misinterpreted by brands in consumer retail. As a result, many of the “losers” in the RSR report are focusing on the wrong, outdated tactics to combat Amazon’s encroachment — price slashing, for instance — when they really need to be focused on enhancing their outreach — specifically through mobile engagement.

Misguided approach to critical business challenges




In the past, driving sales hinged on how much of a bargain one brand could deliver over the nearest competition. If you were one of a handful of retailers selling shoes at a mall, for instance, driving foot traffic hinged on spreading the word about bargains that beat the competition within relatively close physical proximity.

Needless to say, this doesn’t cut it in the digital age. Not only are the number of physical storefronts shrinking coast to coast — largely considered a course correction of inflated consumer confidence from the 80s and 90s, not a sign of brick-and-mortar’s death — but digital advertising is now where companies are placing most of their ad budget. Further to that, mobile is now the arena where most digital ad spend is allocated, with mobile set to represent 72 percent of all digital advertising by 2019.

Because physical proximity to the competition means very little on the “digital street,” mobile marketers need to do more than just slash prices to stay ahead of the competition — although location and proximity are still huge factors when it comes to mobile (more on that later).

Instead, companies that were ranked as winners by RSR had started shifting their focus (and their budget allocation) away from addressing price sensitivity and toward keeping pace with consumer-facing innovation — the top concern among winners polled. Ace among these innovations is enhancing mobile marketing via branded retail applications, which demonstrated a 54% jump in usage over the past year alone.

The best to success — especially when it comes to competing with Amazon — is for brands to enrich their apps with tailored messaging while establishing a “lifestyle” associated with the app that brings value to a user’s day-to-day beyond supplying goods. While Amazon may be the modern day equivalent of the city-center department store, Victoria’s Secret, for instance, will still hold a greater cache among consumers of lingerie thanks to their long-established and personalized mobile experience.

Giving up on mobile before even trying it out



One of the most striking disparities among the winners and losers in the RSR report is how they view their greatest opportunities. Among the losers — 62 percent — the overarching attitude seems to be that because direct sales on digital are so small compared to physical channels, investing more in mobile is like throwing money out the window.

The winners in the report, however, understand that this is the wrong way to measure the success of mobile. Shopping is still a human behavior aided by , the report explains, where each touchpoint helps drive immediate and potential sales through greater engagement. That means that when brands more in developing their mobile strategies, this fuels sales across every channel, rather than prioritizing one over another.

For brands to reach that omnichannel future that’s been forecasted for so many years, they need to adopt the holistic picture of consumer engagement that 68 percent of the winners polled by RSR are actively developing over the next year.

Unfortunately, retailers of all stripes face an uphill battle in syncing their different channels up operationally, the report finds. But when brands take an analytical approach to how they reach out to customers — leveraging many of the useful insights derived by the treasure trove of user data Localytics can deploy for customers– tying disparate retail channels can be can be done intelligently.

Learn more about how retailers are winning and losing when it comes to mobile in our latest benchmark report.





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