Many retailers worldwide may be dramatically underestimating the impact that digital is having on their businesses, according to Deloitte Report

Published: 8 March 2016

The retail industry is being transformed by digital technology, and this change is happening globally, according to the new report from Deloitte, “Navigating the New Digital Divide: A Global Summary of Findings from Nine Countries on Digital Influence in Retail.” The report explores the digital preferences of consumers globally, with a specific focus on how the use of tech devices impacts in-store shopping behavior. A follow-up to our last U.S.-focused study on this topic (released in May 2015), this report expands the scope of our research to include eight additional retail markets.

“The research suggests that there is already a gap between consumers’ digital behaviors and expectations, and retailers’ ability to deliver the desired experiences,” says Kasey Lobaugh, principal, Deloitte Consulting LLP and the report’s lead author. “We refer to this gap as ‘the new digital divide,’ and it poses a critical challenge to retailers. In order to stay relevant in today’s marketplace, retailers must understand the evolving digital needs of their customers and improve their ability to anticipate and shape the needs of tomorrow.”

The report's findings are based on extensive surveys of more than 2,000 consumers in each of nine key global retail markets: Australia, Canada, China, Germany, India, Mexico, Netherlands, United Kingdom and United States. The study analyzes more than two million data points, identifies trends across all markets, and compares the results among mature and developing markets.

Three major trends emerged from the survey findings:

• There is no single path toward digital adoption. While all countries studied are heading in the direction of increased technology adoption, the progression sometimes moves at a different pace or follows a different route, depending on the country. In some cases, emerging markets may skip adoption stages experienced previously by developed markets.
• One digital “size” does not fit all consumers. Even within the context of a specific market, digital behavior varies based on personal context – who the consumer is, what stage they are in the shopping process and what they are looking to buy. In addition, categories matter because consumers use digital tools differently based on product type.
  
• Consumers are demanding different digital tools and features to execute their own shopping journeys. Consumers are using digital to make decisions and plan their spending in ways beyond the control of retailers. The use of third-party social media, for example, has an impact on shopping and buying decisions. Simply creating a proprietary app is unlikely to reshape or contain consumer behavior.

“The Chinese market is becoming more sophisticated when it comes to digital,” said David Lung, Managing Partner of Consumer Products and Retail Industry, Deloitte China, “with 59 percent of internet-connected consumers’ in-store sales influenced by digital. When social media is used before or during the shopping journey, Chinese customers are 20 percent more likely to make a purchase. Retailers who want to capture more sales in China could pursue digital investments that address the needs and desires of the market and reinforce their brand image online. ”

Further, the report provides in-depth analysis of each of the nine markets, offering various insights about the countries and how they compare. For example:

• Among developed markets, consumers in the United States are most influenced by digital; with 49 percent of in-store (offline) sales were influenced by digital device usage.
• Also among developed markets, the Netherlands, Germany, and the U.K. have high digital and mobile usage rates, but paradoxically lower levels of digital influence on in-store shopping.
• Smartphones accounted for nearly all (85 percent) of the digital influence in India, suggesting that few consumers in that country are using devices such as desktop computers or tablets to pre-shop their store visits.
• Chinese consumers are highly influenced by social media when they shop, with 36 percent of connected consumers using social during the browse/research phase and 50 percent using social media to get validation for purchases from their personal networks.
• Worldwide, consumers are still in the early stages of embracing the concept of “buy online, pick up in store” (BOPUS). The data on usage patterns implies that this shopping approach will become more popular, with more options, over time.

The study presents a snapshot of the influence that technology has on today's retail customers. While there are cultural and economic differences between the countries, the study suggests that all of these markets are aligned and quickly heading down a similar path.

The report concludes, “Retailers who fail to get ahead of these trends could face real threats to their long-term success.”