Retail physical stores influencing online sales

As Retailers perfectly know, store floor-space is a scarce resource and as such, it’s absolutely invaluable.

Unlike in the virtual world of online retail where space is not a factor, in brick-and-mortar stores each square foot is expected to make a certain amount of dollars – for example, according to data provided by eMarketer, a couple of years ago Apple Stores generated an amazing $4,798.82 per sq.foot, luxury jeweler Tiffany $3,132.20, while department-stores such as Macy’s made around $160/$200.

Let’s not forget that, like it or not, we are now operating in an omnichannel world, so it’s about time to stop evaluating stores purely through traditional store-sales figures – we need to add also influenced sales; these sales occur on different channels (typically ecommerce website, Mobile, etc.), but are “instigated” in-store.

In other words, the true value brick-and-mortar stores generate must be accounted appropriately because the source of value creation is becoming more and more independent from the location of value capturethe value generated by physical stores is potentially significantly bigger than just the economic value of sales that take place directly on the shop-floor; for instance, an apparently not-profitable store may actually be creating significant value as a showroom, where customers are able to discover and experience products that are afterwards purchased online – that is, on another channel.

The issue is, how to measure influenced sales?

The basic answer is, create a link between the store visit (first) and the online purchase (after); this is easier said than done, anyway:

  • some Retailers use surveys on their Ecommerce sites: they explicitly ask e-shoppers if they visited a physical store before purchasing on-line
  • some Retailers in their physical stores dispense discount-coupons to be used online, then track their redemption
  • some Retailers use loyalty data to compare store visits and online visits, accordingly infer influenced sales insights

As a matter of fact, a definitive, effective/efficient solution is still up in the air.

Andy Cavallini  –


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