The digital consumer: Almost one-third of Swiss retail sales influenced by the use of digital devices

• The talk of town is online shopping, but the influence of digital devices and online channels in the Swiss retail trade extends far beyond pure online sales: The proportion of in-store sales influenced by the use of digital technology (CHF 25.5 billion) is almost four times that of the pure online sales (CHF 6.5 billion) of Swiss retailers. 
• The online shop is important as a sales channel – but it is even more important that Swiss retailers look to the use of digital technology in their offline operations. 
• 83% of Swiss consumers use a smartphone, iPad or laptop when shopping. 
• For one consumer in five – and one in three for millennials – channels such as YouTube and Facebook have a medium to large influence on purchasing decisions.

Digitisation has had a significant impact on customer behaviour in Swiss retail in the last few years. Product sales are increasingly shifting to the internet, generating high growth rates in online sales: in 2016, the value of the merchandise bought online in Switzerland rose by 6.1% to CHF 6.5 billion. Although online sales still account for a relatively modest 7% of overall retail sales in Switzerland, the trend is on an upward trajectory.

However, the effects of digitisation on consumer behaviour go far beyond online sales. In a representative online survey of 2,000 people in Switzerland, 83% of participants indicated that they used digital devices (smartphones, iPads, laptops, etc.) when shopping – that is, before, during or after a visit to a store. The devices are mainly used to buy products, to look for information (e.g. prices, product comparisons), to post reviews, to arrange a pick-up or delivery time or to contact customer services.

“The ongoing digitisation has transformed consumer behaviour in the retail sector. If you’re only thinking about online sales, you’re underestimating the impact. The difference between online and offline customers is blurring. Retail sales in store are also being heavily influenced by digital devices and online channels,” explains Konstantin von Radowitz, Lead Partner for Consumer & Industrial Products at Deloitte in Switzerland. “The talk of town is the increasing importance of online sales. But retailers should actually look even more to the use of digital technology in their offline operations.” 

The extent to which the use of digital devices influences retail sales in store is made clear by the digital influence factor¹. In 2016, retail sales in Switzerland totalled CHF 93.9 billion. Online sales accounted for CHF 6.5 billion (7% of the total), while in-store sales made up CHF 87.4 billion (93%). Of this CHF 87.4 billion, CHF 25.5 billion was influenced by the use of digital devices. Thus, the digital influence factor in Switzerland is 29%. For comparison: in Germany it is 30%, while in the United States it is a high 56%.

“Digital devices have a considerable influence on in-store sales: the proportion of in-store sales influenced by the use of digital technology (CHF 25.5 billion) is almost four times the pure online sales (CHF 6.5 billion) of Swiss retailers. Anyone who regards the online world as just an expanded sales channel is therefore missing its importance and scope,” says Konstantin von Radowitz.

Research online, purchase offline

The ROPO effect (“research online, purchase offline”) is the best example of this. This refers to customers who look up a product online and then go to the shop to buy it. In Switzerland, the ROPO effect appears to be particularly marked. This is indicated by the fact that the share of online sales in total retail sales is still relatively small (7%), while the use of digital devices prior to going shopping is widespread. Therefore, visibility in online channels is very important for retailers, as this has a direct influence on in-store footfall. If people find the right information online, they will also be more likely to go to the shop.

The growing influence of social media on purchasing decisions

The influence of social media on buying decisions is on the rise, too: for one in five consumers, channels such as YouTube, Facebook, Instagram and blogs exert a medium to large influence over their purchasing decisions. For millennials, that figure is nearly one in three.

According to Konstantin von Radowitz, “The more consumers go online to find information on products, the more often they make use of social media. Therefore, retailers should not just focus on their own digital channels such as websites and apps, but should also work on their presence on social media”.

What should Swiss retailers focus on?

Swiss retailers have a great potential to optimise customer journies using digital technology, for example via:

• Mobile web pages: Retailers’ focus should not just be on their online shops. It is crucial that their online approach encourages a trip to the shop, for instance through individualised information on the product range, details on availability, reviews or even price comparisons. 
• Digital solutions that make in-store purchases as simple and efficient as possible: When it comes to paying, these might be, for instance, mobile payment or self-checkout machines. 
• New technologies: For example, augmented reality or indoor navigation can be used to enhance the customer experience – both offline and online. Then it is not “just” about buying a product, it is about the whole experience surrounding that purchase.