{"id":2733,"date":"2018-11-17T08:57:36","date_gmt":"2018-11-17T03:27:36","guid":{"rendered":"https:\/\/www.vue.ai\/blog\/?p=2733"},"modified":"2024-08-12T10:23:08","modified_gmt":"2024-08-12T04:53:08","slug":"the-curious-case-of-halo-effect-in-retail","status":"publish","type":"post","link":"https:\/\/www.vue.ai\/blog\/retail-trends\/the-curious-case-of-halo-effect-in-retail\/","title":{"rendered":"The Curious Case Of Halo Effect In Retail"},"content":{"rendered":"Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>

Ever since ecommerce burst through the doors in the late 90s and early 2000s, online retail has been pitted against offline retail. Both the platforms were presented as arch rivals that can\u2019t mutually co-exist. Some believed online would lead to offline\u2019s doom. <\/span><\/p>\n

But in the last decade, the conversation has shifted from online vs. offline retail to unified retail business that includes all verticals. The term \u2018omni-channel\u2019 is an outcome of such deliberations. Businesses realized that <\/span>consumers want everything<\/span><\/a> and that <\/span>personalization<\/span><\/a> blended with omni-channel is the only way to go ahead in retail. <\/span><\/p>\n

While omni-channel is infused in retail, another phenomenon has piqued the interest of the industry. The \u2018Halo Effect\u2019 is making waves in retail that has put a spotlight on the role of brick-and-mortar stores. It is a trend that illustrates a positive relationship between a brand\u2019s physical stores and online channels.<\/span><\/p>\n\"\"\n

Let\u2019s dive deeper to understand what really the halo effect is and how it is transforming the retail industry. <\/span><\/p>\n

Retail\u2019s Halo Effect<\/b><\/h2>\n

Multichannel retailing is the present of the retail industry. Customers demand for omni-channel options that combine the efficiency of online retail, convenience of mobile commerce and the personal connection of traditional retail. <\/span><\/p>\n

There are a lot of statistics to support the impact of ecommerce and m-commerce on retail sales, be it in the shape of online shopping sites, <\/span>mobile sites and app<\/span><\/a>. But there was very little known about the impact of physical stores on online sales, in terms of tangible numbers and statistics. That\u2019s when various retail and consumer bodies decided to study the unexplored part of the offline and online retail bond and brought the special term \u2018halo effect\u2019 to the surface.<\/span><\/p>\n

The global trade association International Council of Shopping Centers (ICSC) recently released a <\/span>report<\/span> \u2018The Halo Effect: How Bricks Impact Clicks\u2019. It studied the correlation between a brand\u2019s store and web traffic. The findings were very interesting and eye-opening. <\/span><\/p>\n

The report states that a brand witnesses a 37% increase on an average in web traffic after they open a new store. Emerging retailers witness a staggering 45% increase in traffic, whereas established retailers experience a 36% increase. The percentage increase in the traffic to the brand\u2019s website is 27%. As the unintentional impact of opening a physical store can be seen on the online operations of the brand, the trend earned its name – \u2018halo effect\u2019 in retail. <\/span><\/p>\n

Closing a store also impacts the brand\u2019s web traffic, albeit negatively. According to ICSC\u2019s report, a brand witnesses a 4% decrease on an average in web traffic after they close a store. The percentage decrease in traffic is 9.5% in the case of apparel retail brands, 7.9% for department stores and 16.4% for home retail brands. <\/span><\/p>\n

These statistics break the long believed myth that a brand\u2019s online and offline store are competitors. It proves that investing in traditional retail has a positive and measurable impact on the online channel. <\/span><\/p>\n

Tom McGee, ICSC\u2019s President and CEO <\/span>asserted, \u201cThe clicks versus bricks debate is over. We have long suspected that there is a direct and positive correlation between having both a physical and a digital presence, and the halo effect study confirmed this\u2026 The physical store is the hub of customer experience and service.\u201d<\/span><\/p>\n

Retail And Online Stores \u2013 Allies, Not Competitors?<\/b><\/h2>\n

There\u2019s a steady rise in online-only brands that are investing in offline stores. This has happened primarily because retailers have identified the evolving role of physical outlets, which is not just limited to as a sales channel. Traditionally, the end goal of each retail platform was to generate sales. But brands are getting smart by harnessing the power of different retail verticals for different purposes. <\/span><\/p>\n

Retail outlets act as billboards, product catalogue and pick-up point for online stores that help to create brand awareness and build a positive reputation. The \u2018click and collect\u2019 feature is especially important around the holiday season that is made possible only by stores. <\/span><\/p>\n

Customers can now browse the online store, place the order and pick it up from the physical store on their way back from work. Or they can touch-and-feel the product, see how it works and then go online to place the order. If a brand fails or succeeds to connect with their customers at any of the touchpoints mentioned above, then it would impact the online performance of their brand. This is how the halo effect works.<\/span><\/p>\n

Take for instance, Huckberry, the US-based men\u2019s online retailer. Known for its active and adventurous fashion clothes and accessories for men, the online-only brand recently <\/span>ventured<\/span><\/a> into the offline space with a pop-up store. The brand is going to use that physical space to create adventure experiences for its buyers and not as a sales channel only. From demos to live programming with Huckberry partners, the retailer plans to engage with its consumers in a unique way. <\/span><\/p>\n

Warby Parker, Bonobos, Untuckit, and Casper are just a few of the many new-age brands that swear by the positive impact of physical outlets on their online business. And with each passing, more names are getting added to the list. Like mentioned above, the core purpose isn\u2019t sales conversion. It really is about supporting the online channel, bringing accountability, building trust and becoming approachable because the absence of physical store is negatively affecting the digital sales figure. <\/span><\/p>\n

Men\u2019s wellness hipster brand Hims\u2019 CEO Andrew Dudum <\/span>explained<\/span><\/a> this by stating, \u201cOur business is online, and we love what we\u2019re doing, but this is about approaching the shopping environment in a different way \u2014 it\u2019s not about purchases, but it\u2019s much more about building an amazing place for people to come and explore.\u201d<\/span><\/p>\n

Untuckit founder Riccobono too <\/span>admitted<\/span><\/a> that consumers started taking them seriously only after they opened their stores. <\/span><\/p>\n

As a retailer, one can measure the \u2018halo effect\u2019 of their brand with the help of analytics and discover patterns across all product category type, geographical areas, customer type, shopping season, and time period. \u00a0Studying and decoding consumer data would allow retailers to devise a customized retail strategy and maximise the \u2018halo effect\u2019. <\/span><\/p>\n

The Future Is Hybrid<\/b><\/h2>\n

ICSC tested all retail categories for its halo effect study before drawing to a conclusion that there exists a positive correlation between brick and click; not just a theory but a proven fact. The association discovered that the positive influence is more than 32% on emerging retailers\u2019 business. The percentage is between 26%-27% for established, apparel and non-apparel retailers. <\/span><\/p>\n

It goes to prove that the retail industry is hybrid in nature as opposed to existing in one format. And, physical stores are irreplaceable. For a long time, focus was placed on declaring one format as a winner and the other one as a runner-up. But the rising trend of halo effect in retail reflects that the growth of retail industry is purely dependent on all the mediums working together seamlessly. Their roles change, contribution percentage changes and popularity changes. But all formats are required for the retail industry to run like a well-oiled machine. <\/span><\/p>\n\n\n

Read More About<\/strong> Automated Catalog Management<\/strong><\/a> Solution<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 5<\/span> minutes<\/span><\/span> Ever since ecommerce burst through the doors in the late 90s and early 2000s, online retail has been pitted against offline retail. Both the platforms were presented as arch rivals that can\u2019t mutually co-exist. Some believed online would lead to offline\u2019s doom. But in the last decade, the conversation has shifted from online vs. offline …<\/p>\n","protected":false},"author":23,"featured_media":2735,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1523,1161],"tags":[169,168,47,23],"acf":[],"yoast_head":"\nThe Curious Case Of Halo Effect In Retail | Vue.ai Blog<\/title>\n<meta name=\"description\" content=\"The rising trend of halo effect in retail reflects that the growth of retail industry is purely dependent on all the mediums working together seamlessly.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vue.ai\/blog\/retail-trends\/the-curious-case-of-halo-effect-in-retail\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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