Purchasing Channel Versus Decision Making Channel

94% of retail sales are still generated at brick and mortar stores. This stat is usually referenced to defend traditional retail when people see Amazon increasing their revenue from 2009 to 2013 by $50 billion, and state that the death of the traditional retail store is a foregone conclusion. The big effect that the internet makes on shoppers is not on their purchasing channel, it’s where they make their purchasing decisions that has changed.

This is why most consumers know what they want before they show up at the store. The reaction between stimulus and purchase is not going to the store, but the customer accessing the internet with questions like “how do I keep diapers from leaking through the night?”, “what kind of jeans is Beyonce wearing” and “what will remove crayon marks from my wood dining table?”  Even if TV advertising is the stimuli, the internet intercepts the purchase funnel at some point.

You wouldn’t think this insight has been made if you were to review most multi-channel retailer’s today. Online marketing efforts are still overwhelmingly focused on driving sales online. A big part of the problem is calculating how much revenue is driven offline from online advertising. Since online advertising’s effect on online sales is easier to measure, it has a bigger budget.

There is a change coming to the marketing departments of multi-channel retailers and that is, all advertising for retail stores will soon be online (the day is coming when TV and the internet are one in the same, and those ads will be scrutinized with the same criteria as online ads). Regardless of which channel the customer chooses to purchase from it will all be from digital advertising.

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