A customer who has a positive shopping experience with a retailer will come back for more, a new study suggests, which seems obvious enough. But the research, conducted for the ICSC (International Council of Shopping Centers), found that a single in-store purchase translates into additional spending via the retailer’s online platform, and vice versa.
The new ICSC study, “Halo Effect II: Quantifying the Impact of Omnichannel,” builds on the results of the global retail real estate trade group’s 2018 research on the symbiotic relationship between consumers’ in-store and online shopping behavior.
“Our first Halo report demonstrated the positive correlation between having both a physical and digital presence as it relates to Web traffic and brand awareness,” ICSC president and chief executive officer Tom McGee said. “This follow-up report puts a dollar amount on that relationship. What we found is that consumers take advantage of the channels available to them and it has a positive impact on total sales. Simply put, consumers want a great experience, whether it is online or in the store.”
The new study analyzed $31 billion in consumer spending from more than 41 million unique credit and debit card transactions from 2016 though 2018, according to ICSC, which says that the halo effect, or the influence one shopping experience has on another, was calculated from the total net value of purchases starting in stores and ending in online transactions (and vice versa) in five-day increments.
The study found that an initial online purchase will result in additional net online and in-store spending of $171 over a 30-day period. A customer who starts with a $100 in-store purchase, meanwhile, will go on to spend an additional $163 over a 30-day period, on average.
In its report ICSC suggests that physical stores offer customers the human interactions they cannot get online, while allowing retailers to gain knowledge about their shoppers that can enable them to provide a more personalized experience, wherever the customer chooses to shop.
That makes sense. But another recent study, this one from the e-commerce SaaS (Software as a Service) platform BigCommerce, found that more than half of online shoppers said they had stopped shopping with a retailer due to a bad shipping experience. Would those online shoppers then be less likely to visit the retailer’s physical stores as well? Does the flip side of a halo effect occur?
If so, success in omnichannel retailing depends on always getting the customer experience right, both in stores and online.