Despite Europe’s sluggish economy, online sales are thriving. Between 2008 and 2011, eCommerce in Europe has grown an average of 18.6% per year compared to an average 10.3% in the US.  Many European retailers are slow to adopt online retail, fearing it could be the death of brick-and-mortar stores. But their fears are unfounded. Online retail simply makes it easier for consumers to find the right product, making it easier for them to buy. And when you do online retail right, those consumers will buy from you.

Let’s look at how online retail makes buying easier from the consumer perspective to understand why European retailers should embrace it, not fear it.

Online, consumers guide each other to the perfect product

The digital shopping experience, whether online or mobile, has become more social than ever. Social bridges the interaction gap for retailers online when done right, replicating online the face-to-face conversations with store representatives and other unknown consumers people have in stores.

Digital retail makes consumer knowledge collective. Are you choosing your next mp3 player? You’ll get a democratized recommendation for loudspeakers and other accessories that other buyers have also acquired – the products they “voted for” with their wallets. It’s like asking another shopper in the aisle if they’ve tried a product, except now the “aisle” is the retailer’s entire customer base.

Looking for a new refrigerator for your kitchen? Like me, you probably did not graduate as a refrigerator expert. Online, you can look at what other consumers are saying and choose accordingly based on their product ratings. Reviews “socialize” the product by adding customer testimonials and using consumer wording, not marketing nor technical terms. For retailers and brands, our data shows that well-informed consumers reading other shoppers’ reviews, questions, and answers show a 153% lift in conversion over those who don’t read other shoppers’ remarks. So conversing with each other not only helps you find the right product for your specific needs, but encourages you to actually buy it.

Digital retail lets consumers filter conversations to the most relevant opinions

Conversations on retail sites can get more specific. In the previous example, a retailer’s entire customer base was in the aisle. But online, you can filter this large group down to the opinions you relate to most.

Say you only want opinions from your friends rather than strangers. Using Facebook’s open graph, you can reveal whether any of your Facebook friends have Liked the product you’re looking at, written a status about it, purchased it, or reviewed it.

Or what if you only want opinions from people like you, who share your needs? Online, you can filter consumer feedback by relevant criteria such as geography, age range, family status, etc., and display only the most relevant opinions from customers like you. At Sephora for example, you may choose your hair and skin color to see testimonials from people like you when looking for the ideal shampoo or nail polish.

Online retail helps consumers buy offline, too

Most European retailers now report that traffic in-store is decreasing while online traffic increases. And it is a big problem for many, given that the ratio of people buying online is still 30 to 50 times smaller than in store. Take a well-known apparel brand in France, catering to 15-24 year olds. This demographic is a particularly well-connected online and the retail site sees high traffic, yet conversion online is an average of 1.5%, meaning only 3 consumers out of 200 buy when they visit the site. The retailer’s offline conversion, however, is much higher at 15%. With over 400 stores in over 20 countries, it’s important for the retailer to create a common strategy for both online and offline operations, and use the higher online store traffic to generate web-to-store traffic and in-store sales.

These consumers who research online and then buy offline are called ROBO shoppers. Both the online retail and offline retail worlds can co-exist, not just for the sake of it, but for strategic aims that maximize the selling power of both channels.

For example, as you shop online, the benefits of digital retail previously discussed help you find the right product for you. But say you’d rather pick up the product on your way home from work than wait for it to ship. Retailers are finding ways to drive you to their store, versus buying somewhere else. Options like pay-online, pick-up in store are becoming more common. Customer loyalty programs also encourage online researchers to buy from the retailer’s physical locations.

Furthermore, customer and product data gathered online can help guide offline selling. Online, retailers can track which items shoppers view, what customers say about them, which are the most popular and which are the least, etc. This data helps them understand how to sell in the offline world – which products deserve endcaps, which to call out with signage, what in-store representatives should say about the product.

Movie theatres have faced several innovations many thought would kill the industry. VHS, DVD, HD, on-demand, internet streaming – each was proclaimed by many to be the nail in theatres’ coffins. Yet the theatre industry kept innovating, kept surviving.

Online retail isn’t a killer of traditional stores – it’s simply a call for them to innovate. And in this case, it’s also the weapon for innovation. Connecting the online retail experience with offline stores is the retail industry’s 3D glasses. You’ve simply got to keep innovating.

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