Study: Omnichannel ‘cannibalization’ is a myth

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Study: Omnichannel ‘cannibalization’ is a myth

By Dan Berthiaume - 07/24/2019
Leave cannibalization to zombie movies – a new study shows sales in one channel actually boost sales in other channels.

According to a new study from the International Council of Shopping Centers (ICSC), “Halo Effect II: Quantifying the Impact of Omnichannel.” a single retail transaction translates to multiple subsequent transactions and significant incremental spend with that same retailer across channels. The “halo effect” is commonly defined as the tendency for an impression created in one area to influence another.

The study, which analyzed 41 million credit and debit card transactions in conjunction with 1010data, found that following an online transaction, the average “halo” consumer makes 2.1 transactions in-store with the same retailer within 15 days. Likewise, following an in-store transaction, the average consumer makes 1.3 online transactions with the same retailer within 15 days. Sixty-seven percent of click-and-collect shoppers buy additional items at the store when they pick up their online purchase.

Both convergence paths yield supplementary spend of an additional $131 in-store following a $100 online transaction, and an additional $167 online following a $100 in-store transaction. According to the study, physical and digital act as extensions of each other and consumers spend continuously at both, within a 15-day period.

Over a 30-day period, the study finds an initial $100 online purchase will result in an 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.

“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,” said Tom McGee, president and CEO 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.”

The findings reinforce ICSC’s 2018 study “The Halo Effect: How Bricks Impact Clicks,” which found what the industry anecdotally knew for years to be true: that physical stores increase online traffic and brand awareness.

The full report can be downloaded here.

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