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Comment: Is it time for offline to go offline?

Monday March 19th 2012

With rapidly changing technologies, is there such a separate channel as 'offline'? By Andrew McClelland

For many multichannel retailers, e-commerce is now generating a significant portion of the overall revenue for the business. Argos’ figures show that around 40% of their sales now originate from online and there are several others reporting that online accounts for around 20%. Physical stores still bring in the lion’s share of the yearly revenues, but I think a question mark is starting to be raised over whether the term ‘offline’ is appropriate any more.

Over a very short period of time, technology has radically altered the way that retail works, both for retailers and consumers. The platforms, channels and contexts through which brand interaction occurs have multiplied and become more complex, and the proliferation of smartphones and increasingly tablets have led to the phenomenon of the ever-connected consumer who can engage with brands at any time and in almost any place.

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In that sense alone, the idea of ‘offline’ even being possible anymore becomes contested but this is primarily from a consumer’s perspective. When viewed from a retailer’s perspective the boundaries between online and offline are already so blurred that the term may already have been consigned to the past.

At the Retail Business Technology Expo at Earl’s Court recently, many of the exhibitors were showcasing products that are based around integrating systems together and introducing elements of tracking and analytics that are so fundamental to the online experience. In an advanced store’s IT infrastructure, no system exists in isolation but communicates with all others, leading to highly reliable and current information on stock range, location and availability as well as allowing for models of customer profiles and behaviours to be developed, which help to inform how staff interact with them.

Of course, this level of information would not be possible if the store’s systems were only integrated locally; a whole network of stores providing data in real time leads to the ability for shop-floor staff to access those systems and respond to customer queries quickly and accurately, presenting that customer with a very positive experience in the process.

Mobile phones, with their ever-increasing functional range and capabilities, may be on the way toward becoming major payment portals if NFC and tap-to-pay methods become widely adopted by consumers. If they were to become common, would paying in-store through a mobile phone have to be classed as an online payment?

Obviously some stores are further ahead than others in their deployment of technology, but in the eyes of consumers and retailers alike, many are already too connected for ‘offline’ to survive as a concept for much longer.

Andrew McClelland is Chief Operations & Policy Officer, IMRG