Report from NRF: The Revolution is Over

Jan. 14, 2013

At a Sunday afternoon session of the NRF’s Big Show happening this week in New York City, an IBM executive suggested that not only is the move to digital shopping a revolution rather than an evolution, but also that the revolution is over. New research found that, though 84 percent of consumers made their last purchase in-store and only 14 percent did so online (via a PC or mobile device), where they are going to make their next purchase tells a different story. Of the 84 percent, 56 percent will go back to the store, 35 percent are undecided and 9 percent are going online, “never to return,” said Jill Puleri, vice president, global industry leader for retail for IBM Global Business Services. Even worse, Puleri said, the 56 percent who will go back to the store are 55 and older. The 9 percent moving online are 18-34, every retailer’s golden demographic.

“Are we overstating things by saying retailers must reinvent the way they buy, market and service their customers? That’s not what the data is telling us,” she said. “That’s not what the market is telling us either.”

Puleri used the example of showroomers—young consumers armed with smartphones who come to the store only to research products before buying online—who retailers have been treating as the enemy. But they shouldn’t. IBM’s research showed that a full quarter of showroomers planned to buy in the store they visited until something preventable got in the way. Retailers must find a way to accommodate this growing segment, she said.

“It turns out these supposedly unprofitable, disloyal, useless customers are also incredibly active consumers,” Puleri noted. “Fifty-eight percent visit an online community more than once a day. More than half are writing reviews. And guess what? They’re positive reviews. So, we’re talking about a sophisticated, global, affluent and most importantly influential customer base. This is not the enemy. They are advocates and you should be bending over backwards to make sure the experience they have with you is worth sharing.”