AND is better than OR for shoppers.

We founded and built Locally based on a simple premise: Online-to-Offline shopping is a real thing.

Consumers are consistently engaged in a particular shopping behavior: researching products online before purchasing at a nearby store. But solutions for retailers or brands to optimize that journey were practically non-existent.

When we started Locally in 2013, the Yellow Pages was still a popular advertising vehicle for local retailers. Stores would spend hundreds to thousands of dollars every month with little more than an address line to show for it. But the alternative, not being included in a printed directory, was risky.

Today, just an address is woefully inadequate for the always-online shopper. Imagine referring someone to a movie theater’s location without any information about what’s playing. No one is going to head to the theater based on that information alone. But that’s largely the experience for consumers when it comes to retail; store locators do little more than refer the shopper to an address with no information about what’s in stock.

Online-to-offline shopping needs to be optimized for consumers. It’s helpful to shoppers to find the address for a store nearby, but it’s even better to dive deeper, show them what is in stock at nearby locations, and even allow them to reserve an item for pickup. Online-to-offline is the way consumers in 2022 shop—Locally simplifies that journey.

Location referrals are good, but shoppers need more.

What this means is no matter how accurate a location referral is, it will never be as valuable as a hand-off to an accurate selection of merchandise, style, category, brand, size, color, etc.

And, no matter how closely we can get a shopper to where the product is in stock, we will always see higher conversion when handing them off to a waiting package (BOPIS or ROPIS) or a same-day delivery.

The goal for multichannel or omni-channel selling should be to create an experience for shoppers that is agnostic to all channels. When one channel crashes into or neutralizes the other, it’s ineffective for the seller and frustrating and confusing for the shopper.

Let’s look at how this applies to retail:

For local brick-and-mortar shops, the application of this idea is straightforward. The more information an online shopper has about where to purchase products nearby, the more likely they are to go to a local store. Even better for retailers, most shoppers will make more purchases than they originally planned once they arrive.

Choosing to give shoppers NO information online about the products you have in-stock is the “or” argument. “Come into my store or you won’t be able to know what I carry.” Especially since Covid, which reshaped the entire retail landscape, shoppers have only become more likely to avoid a store that provides no information about products and inventory.

Would you go to a restaurant with zero information about the menu? Would you go to a hotel without confirming they have available rooms? This logic hasn’t been applied in the retail world up to this point. That is rapidly changing.

Instead of making shoppers exclusively choose either one option or another, retailers should choose an “and” strategy. The “and” solution recognizes that shoppers aren’t set on one channel. They shop online. They shop offline. They sometimes choose a combination of the two. Frankly, shoppers aren’t concerned with the notion of channels at all. They want to shop, and they want options in how they do that.

How does an “and” strategy apply to brands?

Brands are often in a more favorable position than retailers. They have a solid footing in local stores through their wholesale accounts and they have largely been the beneficiary of shoppers increasingly using the internet to research purchases. Direct-to-consumer (DTC) sales have grown remarkably for brands over the past decade. So much so that DTC represents a new profit center for many brands, including many Locally clients.

But is this really an “and” solution or even a win for brands? Not really. It means that brands have achieved success through both sales channels individually—but the greatest success comes when they bridge the gap between the two channels. Instead of taking an “online or offline” approach for each shopper, brands should take an “online and offline” approach.

Let’s consider a super-popular, premium brand that has been successful with an “and” strategy: Apple. Apple knows that virtually all product research is done online. But as shoppers move toward a transaction, Apple has created a frictionless set of channel-agnostic options to complete the purchase: shipped to home or office, local pickup, and local delivery.

Apple’s goal is for you to buy their products however you want. Need it now? Local delivery. Want to see it first? Local pickup. Have time to wait? Ship to home. Freedom in the shopping experience has been key to Apple’s success.

BUT…

“Apple is vertically integrated.” “Apple is horizontally integrated.”

Yes. But these are business distinctions that shoppers just don’t care about. They want to buy merchandise in a way that is convenient for them. They may want it shipped. They may need help with assembly. They might like installation service. They may want to try on the product before buying it. Perhaps they want ease in the return process. Isn’t it better to give shoppers every option up front instead of trying to predict what path they’re most likely to choose?

There are literally dozens of possible inputs affecting a purchase. And while adding more obstacles and conflicts may seem to buoy one channel over another for a single sale, it will likely actually backfire in the long run. Because forcing a shopper down a single path just makes an alternative purchase more appealing. Go beyond single sales; give shoppers online-to-offline options to build loyal customers.

Let’s consider the channels:

Our most successful clients see an online-only conversion rate of up to 4%. They also enjoy lots of enthusiastic organic traffic coming to their website, the top of the marketing and sales funnel.

Those same brands see conversion rates closer to 90% when someone visits a local store to buy their products, assuming the local store has the selection in stock.

These are popular products and brands that have achieved a high level of brand affinity.

Peeling all this back a bit, how did these online brands actually achieve brand affinity with shoppers? In almost every case, the most popular brands had their start in brick and mortar. High conversion rates and organic traffic emerged from the brand awareness created at the neighborhood level. Even Amazon (who is responsible for half of all online sales) has struggled to create brand loyalty purely online.

Brands that sell online AND direct customers to local stores, taking out deference to one option or the other, will reach more shoppers and sell more products.

On the other hand:

Brands that believe that their biggest opportunity to consolidate sales into online channels seem to do the exact opposite. By suppressing online-to-offline purchasing, they create new opportunities for emergent manufacturers who suddenly have the attention of the very same brick-and-mortar retailers that created all of the initial brand enthusiasm in the first place. A loss of local market share virtually always ends in the loss of sales across all channels.

Boiled Down:

• Over 95% of shoppers research products online.

• But, 85% of purchases are still happening in local stores.

• Those stores have in-store conversion rates of up to 90%.

• The best brand website barely reaches 4%.

• The average online basket is around one item.

• The average in-store purchase is around three items.

The bottom line is clear; letting shoppers decide how they want to make their purchase is the best way to grow sales, build brand affinity, and create a loyal dealer network that sees brands as partners.

And, to truly optimize the shopper’s journey, expanding past basic, Yellow-Page-style location referrals is critical. Giving shoppers more information and more choices in shopping grows sales online AND offline.

Want to speak to someone at Locally about “and” sales and marketing solutions? Let us know below.