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The Omnichannel ‘Halo Effect’

A single retail transaction can translate into multiple subsequent transactions and significant incremental spending with that same retailer across several channels, recent research has found.

This was the conclusion of a recent study that was issued by the International Council of Shopping Centers titled, “Halo Effect II: Quantifying the Impact of Omnichannel.”

The findings reinforce ICSC’s 2018 landmark study “The Halo Effect: How Bricks Impact Clicks,” which supports what the industry had believed for years: Physical stores increase online traffic and brand awareness.

“Today’s retailers have more data on customers than they’ve ever had,” the report notes. “As experts who specialize in consumer behavior and retailers told us, each shopping channel within individual brands are making the other more effective, and that’s good for consumers.”

ICSC’s study takes the halo effect to a new level by quantifying the impact of omnichannel strategies on sales, verifying how bricks and clicks work in tandem to strengthen the relationship with the consumer, and then drive increased purchases.

The council says the study analyzed 41 million credit and debit card transactions with the help of the 1010data Co. It demonstrates how online transactions translate into physical store purchases and vice versa, ultimately boosting the bottom lines of retailers who offer omnichannel options.

“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, this follow-up report puts a dollar amount on that relationship,” observes Tom McGee, president of ICSC.

“What we found was 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.”

Following an online transaction, the average halo consumer makes 2.1 transactions in-store with the same retailer within 15 days, while the average consumer makes 1.3 online transactions with the same retailer within 15 days.

ICSC says both convergence paths yield notable supplementary sales. An additional $131 is spent in-store following a $100 online transaction and an additional $167 will be spent online following a $100 in-store purchase.

Physical and digital shopping act as extensions of each other, and consumers make purchases continuously at both locations, notably within a 15- day period, according to the center’s research.

For successful brands, a single shopping act reverberates across multiple days and purchasing platforms. Over a 30-day period, an initial $100 online purchase results in additional net online and in-store spending of $171. A customer journey that begins in-store with a $100 purchase generates an additional $163 in spending over a 30-day period.

Omnichannel strategies offer additional touchpoints for brands to meet their consumer and perpetuate the positive consumer experience that initiated the sale in the first place, the researchers conclude.

“Physical stores are where brands meet their customers and offer them what they cannot get online: human interaction,” ICSC points out. “In turn, the knowledge gained from the in-person interaction allows retailers to create an even more personalized experience for the customer along the next steps in their purchasing journey.”

As a result, 67% of click-and-collect shoppers choose to buy additional items at the store when they pick up their online purchases.

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