The end of 2016 marked a year of inflection for US retail. According to Forrester Research, close to 60 percent of all sales will be influenced by or occur online. The evolving digital revolution has created a modern omnichannel shopper that is informed, empowered and on the move. Being relevant to this shopper makes digital non-negotiable. Here are three reasons why manufacturers need to embrace and accelerate digital now.
Amazon is big and getting bigger
More than half of online consumers in the U.S. now begin their shopping journey on Amazon. If that’s not convincing enough, then consider this: 44 percent of the American population is now within 20 miles of an Amazon fulfillment center. Needless to say, Amazon’s $100 billion in annual sales and surging growth rate make it too compelling for manufacturers to avoid. But this isn’t an Amazon-only phenomenon. Other retailers like Wal-Mart are also making their own moves to strengthen digital, making it imperative for manufacturers to understand and leverage this channel shift.
Conventional channels are slowing down
Conventional retail is at an inflection point. Changing shopper behavior is forcing them to reconfigure their proposition, in some cases even closing physical stores. This is making an impact on B2B and B2C manufacturers that depend on conventional channels. And continuing to solely do business on conventional channels may result in compression in sales for many.
Many competitors are already doing it
Several brands and manufacturers have made announcements about embracing and accelerating online. High-end brands such as Prada have announced plans to increase sales on digital. Under Armour has been investing heavily in fitness apps as a way to sell directly to consumers online. And there are others who are taking similar decisions.
Embracing digital will no longer be a choice for manufacturers but a vital ingredient in being more relevant to customers.