New research shows retail predictions for the importance of different channels.
A new research report from PAC reveals what major European retailers think will be the key trends in digital and physical channels in the next 3-5 years. They asked 200 CxOs working in European retail businesses with over 500 employees to give their view on the future of omnichannel retail. The survey was conducted in May 2015, and the findings make for interesting reading since they reveal significant differences between European countries.
Diversity across Europe
Trends vary significantly between countries, so marketers should not mistakenly treat Europe as a homogenous market. Embracing digital technologies varies significantly by region. In the Nordic countries two-thirds already are selling through mobile channels, whilst in Italy less than a quarter of major retailers think mobile is important. Similarly in Germany 85% of retailers thought the physical branch will become more important, where as in Britain only 23% believed it would retain its position as number one channel.
Online and physical more important
A considerable majority thought that online shopping would become increasingly important as a channel for their retail business in the next 5 years, whilst only a tiny 4% thought it would be less important. An obvious trend perhaps. But interestingly a whopping 73% also thought that the physical branch would become more important- It can be easy to forget as digital marketers that the bricks and mortar store remains extremely important for most retailers, and will continue to do so for the foreseeable future. New tech trends such as beacons may serve to increase the importance of the physical store as they can improve the shopping experience and give personalised offers that could be extremely effective at encouraging purchases.
Half thought mobile will become more important, which is highly likely given over half of web traffic now comes from mobile.
For more insight, see our post on Online retail growth rates in the UK and US.
Obstacles to creating an ominchannel strategy
When asked about the biggest challenge to the development of their omnichannel strategy, European retailers gave an interesting mix of answers. Developing a long-term channel integration strategy came top of the list, which reflects the difficulty of developing such a strategy, especially when the rapid pace of change in digital may mean that the skills of the department are behind where the market is already at.
Making changes to the organisations structure was also rated as a major challenge. Again this is a tricky area, and our recent research into digital skills discovered that many marketing departments are weak in some areas of digital marketing, and recruiting for the right digital skills is frequently a challenge for managers. Our managing digital transformation guide can help by offering useful advice on how to increase the impact of digital marketing with your organisation.
Key trends in the next 5 years
When asked about their plans for omnichannel investments in the next five years, European retailers revealed an interesting set of priorities. When it came to investments they were planning for this year, webshop solutions and online payment solutions came top, highlighting the growing importance of ecommerce for retailers. A big trend for 2020 is the increasing importance of big data in the long term. Although only 7% had already invested in dig data analytics, over half (55%) planned to invest in big data in either the next 2 years or the next 2-5 years. So expect to big data to be a big trend in the next 5 years, with increasing investment and retailers using their data ever more effectively.
For more insights into the future plans of European retailers over the next five years see the full report from PAC.
If you are a retailer looking to assess your omnichannel strategy see our Multichannel retail proposition audit and competitor-benchmarking template from multichannel retail strategy specialist Chris Jones.
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