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Online Sales are Driving Retail Investment, Survey Says

Online sales were expected to capture 11.6 percent —or $394 billion—of all U.S. retail sales in 2016, according to a projection by Forrester research firm, but instead “digital touchpoints” commanded an estimated 49 percent of U.S. sales.

That finding is at the heart of a report, titled “The State of Retailing Online 2017: Key Metrics, Business Objectives and Mobile,” released by the National Retail Federation’s Shop.org division and Forrester. The report found that retailers are focusing their efforts and investment on ways to “enhance customer experiences” online. More than half of the retailers surveyed—54 percent—listed mobile commerce among the top three initiatives in 2017. Other key initiatives for the year include marketing, site merchandising and omni-channel efforts, the report found.

“Smartphones are driving retail sales more than ever, and retailers have found that even modest investments in mobile initiatives can result in huge returns,” said Artemis Berry, NRF vice president for digital retail, in a statement. “This is no longer a new way to reach customers, but it has certainly become a highly effective method and one that boosts the level of customer engagement across the brand.”

The retailers surveyed said m-commerce sales—or sales using a mobile device—increased 65 percent over last year. Nearly half (47 percent) of online traffic came from smartphones and 30 percent of online sales were made using a smartphone.

Rather than investing in emerging technologies such as virtual and augmented reality, retailers said they were looking to enhance customer experience. And for many—45 percent surveyed—m-commerce spending “transformed their overall digital customer experience.” Many said they were looking to invest in new customer service features such as live chat.

“Today’s customers are empowered with information and technology,” Forrester Vice President and Research Director Fiona Swerdlow said. “To grow, retailers know they have to operate with a customer-obsessed mindset to deliver the experiences that consumers now expect at every touchpoint. It’s about having all aspects of the business—stores, mobile, merchandising, customer service, fulfillment and more—work together to deliver total value to your customers wherever they are, at any time.”

The report surveyed 74 companies in October 2016. Companies included apparel and accessories, footwear, general merchandise, home furnishings, personal care, and sporting goods retailers.