Report: Omnnichannel shoppers offer highest lifetime value
Customers that browse across multiple digital environments hold the highest conversion rates — and lifetime value.
Omnichannel consumers continue to shift between devices, environments and walled gardens, or services restricted to digital members, when making a purchase decision. Based on this purchase behavior, multi-screen mobile shoppers are generating the highest lifetime value in terms of sales, according to “Global Commerce Review for Q1 of 2018,” a report from Criteo.
According to data, omnichannel consumers represent a mere 7% of all customers. Yet, omnichannel consumers are responsible for 27% of all sales.
This customer segment is being driven by mobile shoppers. In addition to making purchases while on-the-go, these customers are active across all browsing environments. However, mobile transactions are no longer confined only to mobile websites.
Apps account for over two-thirds (70%) of mobile e-commerce transactions in North America, for retailers with a shopping app. This trend extends across most world regions, as in-app sales dominate.
Almost half (47%) of all consumers in North America prefer purchasing via app, compared to mobile Web (20%) or desktop (33%). In North America, the conversion rate on shopping apps is more than three-times higher than on mobile Web. Globally, in-app transactions have increased by 22% year-over-year.
“Retailers must prioritize and optimize shopping apps, or risk leaving money and revenue opportunities on the table, as mobile transactions are no longer confined to mobile websites only,” according to the study.
Retailers need a mobility strategy going forward, especially as the mobile market continues to mature. The number of sales transactions on smartphone devices grew 22.5% year-over-year, while tablet and desktop usage declined.
The health/beauty and sporting goods industries comprised the highest share of mobile sales at 44% and 43% respectively, beating out other categories such as fashion/luxury, flowers and gifts, and home wares.
With every transaction, these omnichannel customers also share “digital fingerprints” that present an opportunity for retailers to re-engage them on future visits. Matching this online data with offline information is key to unlocking shopper intent and purchasing power, the study said.
For example, omnichannel data is key to optimizing marketing efforts. Retailers that combine offline and online data can apply over four-times as much sales data to inform their marketing strategies.
“[There are] continuing shifts from desktop to mobile shopping, as well as from retailer websites to apps. Today’s shopper is on-the-go and researching across multiple screens, requiring a cohesive, data-driven approach to intersect and influence buying decisions,” said Jonathan Opdyke, chief strategy officer, Criteo. “For retailers with physical stores, app adoption and improved data infrastructure are opening new horizons in omnichannel marketing, with online and offline blending into a seamless and measurable shopping journey.”
Kroger promos healthier eats with OptUp app, in-store nutrition techs
Kroger has big plans this summer around the utilization of in-store nutrition experts and its newly launched OptUp healthy shopping app.
Colleen Lindholz, president of the Cincinnati-based chain’s pharmacy division and The Little Clinic, said the initiative is part of an app update that will help tie a better-health-through-food program into the interactive platforms consumers are already using to navigate their shopping experiences.
“This is all in an effort to support the vision and mission that Kroger has, which is to help people live healthier lives,” Lindholz told DSN at the recent National Association of Chain Drug Stores Annual Meeting. “We’re trying to meet the customer where they are and where they want to be, whether that be in the store or digitally online.”
In stores, Kroger is piloting a program that will staff each supermarket with a nutrition technician through the agency Besomebody Paths. These “techs” will be engaging, customer-focused employees who will work to raise awareness around healthy food choices and the pair of licensed healthcare professionals — the dietitian and the pharmacist — who can help tie those healthier food choices into a comprehensive disease state management program. A total of 18 dietitians will be active across Kroger’s footprint, Lindholz said, one for each of its operating divisions.
Kroger also is building healthy food guidance into its OptUp shopping app, which launched on April 30. “OptUp takes the items you buy at Kroger on your Kroger Plus card and gives you a total [shopping cart] score that shows you how healthy your basket is,” Lindholz said. Each food item and its respective health value is loaded into the app, along with suggestions for healthier choices on similar products for their next shopping trip.
Kroger is employing an algorithm validated by the University of Cincinnati to score each item on a nutrition scale of 1-to-100. The corresponding suggestions are designed to take shoppers along their health journey at a more gradual pace. “We’re trying to help our customers make better food choices, but not go from A to Z overnight,” Lindholz said. “If I’m eating [cookies] for the last five years and that’s my snack, you’re not going to take me to broccoli or even grapes if [cookies] are what I love. What’s great about this app is it suggests items that are higher in nutrients, [but] not that much higher.”
All of this will lay the groundwork for Kroger’s future plans for its dietitians, pharmacists and the food side of its business under the “Wellness Your Way” platform. “Just like our Simple Truth brand has become a $2 billion brand, we want to tie wellness overall into one platform so it becomes seamless for our customers,” Lindholz said. “We’re working on a long-term predictive analytics tool and the power behind some of the big payers.”
Kroger did a soft launch of the platform in February and plans to introduce that platform in a meaningful way in 2019.
E-commerce grocery sales expected to continue growth
E-commerce grocery sales in the United States are projected to grow 10-times faster than in-store sales.
That’s according to Brick Meets Click’s newest sales forecast, which projected online as a percentage of total grocery sales will climb from under 5% at the end of 2017 to over 8% by the end of 2022. From a compound annual growth rate perspective, online grocery sales will grow 13% as compared to 1.3% for in-store sales (excluding the effects of inflation).
The report noted that while online grocery shopping promises to improve shopper outcomes in various ways, fulfilling the promise is still very much a work in progress, which creates challenges for growth.
- One-in-five online shoppers can’t find everything that they want to buy. In-market performance trails pure-play providers in this area slightly, but that’s likely because in-market basket sizes are considerably larger.
- What’s worse is when a customer puts an item in the cart, checks out, and expects to receive everything ordered only to find out something is out of stock. Reducing the difference between what’s ordered and what’s received is critical, especially for in-market providers, given the high frequency with which this occurs.
- Other factors also affect shopper satisfaction, including the direct and explicit cost related to using online shopping options.
For the online grocery format to grow, shopping experiences need to improve so that active online shoppers recommend these alternatives to others, Bricks Meets Clicks advised.