Are you familiar with the halo effect, thanks to which the opening of brick-and-mortar stores stimulates online sales?
On the sidelines of MAPIC 2021, the international commercial real estate trade show in which we will be participating from November 30 to December 2, we invite you to analyze the influence of physical stores on shoppers' online purchasing behaviours and to discover how to benefit from it.
Halo effect: from in-store experience to online purchase
The halo effect refers to the increase in sales on one channel (in this case a brand's e-commerce site) that results from the opening or presence of another sales channel (brick-and-mortar stores). It is thus considered that the success of the activity in the stores is synonymous with the success of online sales, and vice versa.
"Each opening of a physical store has a positive impact on the generation of online sales in the wake of it", says Didier Gasté, our CEO.
The store is not only a point of sale, but also a place of experience. Trying on clothes, price or availability of items, queuing at the entrance... These are all reasons why a shopper may choose not to make an immediate purchase when visiting a store.
In some markets or geographic areas, retailers are increasingly investing in building flagship stores, which not only act as physical stores, but also offer consumers a brand experience and a sense of integration into the brand's world. Here, the halo effect promotes the brand's positioning with its target audience.
In this regard, a recent study by the International Council of Shopping Centers (ICSC) found that opening physical stores generally increases online traffic for retailers by an average of 25%.
Store location also plays a role, creating strategic stores in high-visibility areas, benefiting from a more pronounced halo effect, with online traffic increasing on average by 32%. Similarly, closing a physical store is equivalent to losing 8 to 16% of its online traffic. This is largely due to the unconscious impact of store closures on shoppers, as a large majority (estimated at 84%) continue to shop in-store.
Now, discover the Spaycial method for managing the halo effect!
How to integrate halo effect analysis into your business with Spaycial?
Increase your incremental sales by tracking the halo effect
Keeping your physical stores, even in times of crisis, is a growth lever for your business: thanks to halo effect tracking, you can generate additional revenue through the acquisition of new shoppers from physical stores. When they come with the intention to spend at your store and make a first impression, this experience naturally leads them to your e-shop, which is an additional way to boost your incremental sales.
At Spaycial, we help you monitor the halo effect. In particular, we have seen the impact of visits to several brand stores in shopping malls on purchases made the following days and on the e-commerce sites of these same brands.
Benoit Mouret, Head of Product at Spaycial, explains with two examples that "over the past year, 44% of online purchases at Mango were made within 14 days of a first purchase in a shopping center. This figure rises to 50% for Maisons du Monde."
Make your presence in a shopping center profitable
It's equally important for retailers to understand that having a store is important, but it can be costly. So, is it wise to close your store in light of the uncertainty related to the impact of the COVID-19 pandemic? Nothing is less certain, because the influence of the store experience on sales growth on the Web is real.
For instance, knowing that a shopper visited your shopping center, did not make a purchase but made a purchase on the website of a store present in the center the same evening, allows you to deduce and measure the impact on your sales. The interest of such an approach for you as a retailer is also to know what decision to take regarding the reopening, the development or the reorganization of your physical stores.
Integrating the halo effect in your global strategy allows you to better estimate the profitability of your physical stores and helps you determine the means to offer a unique, differentiating and seamless shopper experience to get the most out of your physical and online presence.