How eCommerce Will be Breaking the Rules on Proximity Impact to Retailer Identity

For Some Things, Size Does Matter…Distance to the Shopper is One of Them!

The last 30 years of my career has been spent almost totally focused within the business of both quantitatively and qualitatively defining the dynamics behind shopper choice. That journey has taken me from one of the first shopper panels of the 80’s to the today’s highly sophisticated, one-to-one shopper targeting analytics.

During this journey, I have seen millions, even billions spent on attempts to discern the path to purchase and what motivates a shopper to choose one retailer over another. Was it the way that retailer marketed? Was it the selection? How about presentation of the shelf or display? The store layout? Or was it just good old customer service?  After all the spending and the copiously performed research, the one factor that always prevailed is pure proximity of a store to that shopper’s location when the decision is made to buy.

There are a wide range of studies that measure the impact of proximity, and making things even more complicated is that the conclusions don’t align. Some studies say proximity’s impact is overstated, while others say that it is a primary factor of shopper choice. What does prevail is that once the shopper has decided on the retailer (For example: low price retailer vs. upscale, etc.) proximity does become an important influencer on the path to purchase decision. Then came eCommerce. 

Proximity’s Impact on a Retailer’s Identity

The one fact that cannot be disputed is that proximity has been inextricably linked to any given retailer’s brick and mortar brand. If that were not the case, there would be no such thing as the neighborhood market or locally targeted assortments. Everything from highlighting that the produce is brought in by community farmers to ensuring that the home town’s hot sauce or potato chip is proudly displayed, they are linked back to brick and mortar proximity. Think of the world of eCommerce, proximity is omni-present…measured not in miles, but in the inches between fingertip to keyboard. The local consumer goods and products can now be enjoyed anywhere in the world.

Statistics say from FMI and Nielsen, the grocery eCommerce business will boom to over $100 Billion by 2021. Using and average of about $50 per shopping basket means approximately 2 Billion brick and mortar shopping trips will soon be disappearing. So, in the very near future, the old Yellow Pages advertisement, “Let your fingers do the walking”, will become more relevant than ever. Grocery eCommerce  4-5 years from now will equal the size of H.E.B and Costco combined, and all of those baskets are up for grabs. Waiting on a strategy, or embarking on a flawed one, is simply not an option. The train has left the station, and there is no turning back.

Getting into the eProximity Game

• eProximity Means Offering an Actual Purchasing Capability — Almost all of the total revenue represented by top 10 grocery retailers is enabled to allow shoppers to both plan a trip, and then seamlessly buy that trip online. After all, they have the financial resources to build highly custom UI’s. But remarkably, only 43% of revenue represented by the next 65 retailers are leashed to hard wired, SaaS solutions that do not enable seamless plan/buy experiences. Even more surprising, 17% of that revenue has no eCommerce capability at all. The time to enable a buying solution is not now…it was yesterday. One proceed forward, however making sure they do all of their homework first.
• eProximity Means a Seamless Shopping Experience — Introducing the pitfalls of “Island Syndrome,” an environment where the shopper must navigate through multiple clicks and sign-in’s to complete their shopper experience. Simply stated, “Island Syndrome” kills eProximity. Brick and mortar proximity is naturally linked to convenience, and nothing should change in the world of eCommerce. A shopper should not have to go to one place to plan, another to buy, one to clip coupons, another to view recipies. It  should be a  seamless shopping experience focusing on customer convenience. 
• eProximity Means Mobility — Today’s shopper is a moving target, which obviously adds to the challenges of staying within close proximity. Therefore, eCommerce solutions must, and I could not emphasize more the word MUST…include a seamless mobile solution. Shoppers who are on the go want to seamlessly link what they do at home with what they do in a coffee shop, with what they do in brick and mortar, and on and on. A mobile application just can’t stop at an isolated solution to view deals and coupons anymore. It must seamlessly link the shopper to all the omni touchpoints.
• eProximity Means Targeting — In reality, getting closer to the online shopper will become both easier and more effective than what was ever possible in brick and mortar….and at the same time more important than ever (think about those 2 billion brick and mortar trips that will be vanishing). Because of the ease of eShopping, those retailers who sow the right seeds will reap exponential benefits. Doing it right means A) targeting that is seamless between all the devices that the shopper uses to either plan or shop, B) They will apply advanced science behind the data (MWG recently developed a partnership with dunnhumby for that reason), and C) They use a non-rigid technology architecture (we use Micro Services) to drive an agile approach to targeting through UI, email, mobile app, and propensity targeting like the MWG’s “Did You Forget?” at checkout. 

The Near and the Far of Shopper Proximity

One of my most vivid memories of my very early youth was the day my Dad threw us all in the family sedan and took us to this cool place with wooden floors that had the baker, the butcher, the milk man, the produce guy and the fish monger all under one roof. It was the opening day of the local A&P. This marked the wonderful moment in my life when having to endure my Mom dragging me through the various shops on Market Street in Newark, NJ on Saturdays came to an all not too soon abrupt end. Watching Abbott & Costello movies was a far more fun Saturday pastime, and A&P became my instant savior (Side Note….Lou Costello was born in Paterson, NJ, home of A&P’s first corporate office.) That was the same year that A&P was the largest retailer anywhere in America, hands down. But in a relatively short period of time A&P went from the biggest to being non-existent. With my reader’s permission, I will stay with this New Jersey theme by saying that when it comes to the eShopper, Springsteen’s famous lyric “glory days….well they’ll pass you by…glory days…in the wink of a young girl’s eye” has more relevancy to the eShopper than Bruce’s very own worn motorcycle jacket!