Technology is forever altering the practice of mass market ­retailing.

Jeffrey Woldt, technology, mass market ­retailing, Amazon, Kantar Retail, Anne Zybowski, J.D. Power and Associates, Jacqueline Anderson, J.D. Power

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Inside This Issue - Opinion

Mass retailing reshaped by power of technology

March 11th, 2013

Technology is forever altering the practice of mass market ­retailing.

Amazon and other Internet-based merchants are mounting a significant challenge to brick-and-mortar chains in categories ranging from books and electronics to toys and health and beauty care. Traditional retailers have responded by augmenting their business model, taking steps that include extending store hours, developing their own e-commerce capabilities and promising to match the prices offered by Internet sellers.

Consumer research confirms the paradigm shift. A new study by Kantar Retail concludes that although e-commerce still accounts for only about 8% of total retail sales in the United States and Great Britain, the impact of digital technology on the business is “100%.”

"This past holiday season was evidence of how online retailing 24/7/365 is impacting the bricks-and-mortar world that we have traditionally understood so well," says Anne Zybowski, vice president of retail insights at Kantar.

The report states that 50% of purchases are made by consumers who first go online to access product information, read customer reviews and compare prices.

Another recent study, this one from J.D. Power and Associates, assesses the impact of a specific aspect of the information revolution, social media. The work spotlights a direct link between a company’s performance in that field and such metrics as the likelihood of a consumer making a purchase. Although the industries studied (airlines, autos, banking, credit cards, telecommunications and utilities) did not include retailing, the findings have broad applicability.

"While there are vast differences among age groups in the frequency of servicing and marketing engagement [via social media], there is a consistency in the impact on brand perception and purchase intent through both types of engagement," comments Jacqueline Anderson, director of social media and text analytics at J.D. Power.

The retail game is clearly changing, and merchants that fail to adapt to technological innovations will find their competitive position compromised very quickly. At the same time, brick-and-mortar chains can’t afford to lose sight of the in-store fundamentals that result in a fulfilling customer experience.