Adobe Digital Dialogue

November 30, 2017 /Digital Marketing /

Retailing 2018: the mobile customer is king

Rapid change in the dig­i­tal mar­ket­place may give some retail­ers anx­i­ety, but a clos­er inspec­tion reveals how close retail­ing remains to its roots.

As retail exec­u­tives take stock of the impact tech­nol­o­gy is hav­ing on their busi­ness and the chal­lenges they face, an old adage may come to mind: the more things change, the more they stay the same.

Dig­i­tal tech­nol­o­gy has trans­formed con­sumer behav­iour and dis­rupt­ed busi­ness mod­els, yet retail­ing has not fun­da­men­tal­ly changed.

Under­stand­ing cus­tomers and stay­ing ahead of the com­pe­ti­tion have always been essen­tial for suc­cess, and the sector’s dig­i­tal trans­for­ma­tion is not so alien when viewed in this con­text.

As exec­u­tives pon­der their chal­lenges for 2018, the cus­tomer, as always, is at the cen­tre of their think­ing.

A key aspect of the dig­i­tal rev­o­lu­tion is the val­ue con­sumers now place on ‘the expe­ri­ence’. That expe­ri­ence is mea­sured not just against bench­marks set by oth­er retail­ers, but across all dig­i­tal inter­ac­tions with prod­uct and ser­vice providers.

Across the region and glob­al­ly we know that cus­tomers don’t dis­tin­guish between cat­e­gories when it comes to set­ting their expe­ri­ence expec­ta­tions. An opti­mum cus­tomer expe­ri­ence on a util­i­ty or gov­ern­ment site may well set that customer’s bench­mark when shop­ping for clothes or elec­tron­ics online.

This is new: inno­va­tion best prac­tice is no longer sec­tor- or cat­e­go­ry-spe­cif­ic.

Under­stand­ing the expe­ri­ence fac­tor

The expe­ri­ence fac­tor has been ele­vat­ed to a new lev­el in the dig­i­tal con­text. The customer’s con­cept of expe­ri­ence tran­scends the prod­uct or ser­vice; it includes every touch point that makes up the cus­tomer jour­ney.

Suc­cess­ful retail­ers have always been in tune with cus­tomers’ needs. The dif­fer­ence now is the nuance of those needs and expec­ta­tions.

The phys­i­cal in-store expe­ri­ence is still a very impor­tant chan­nel for prod­uct pur­chas­es, but online engage­ment has become the most impor­tant influ­encer for that in-store pur­chase.

At least 40 per cent of online shop­ping starts on one device or shop­ping chan­nel and ends up on anoth­er. That means the final trans­ac­tion is influ­enced by a customer’s cross-chan­nel, cross-device jour­ney. If that jour­ney is less than seam­less the cus­tomer may abort their inten­tion to buy.

Retail­ers need to be high­ly aware of the grow­ing role of mobile in the omni-chan­nel mix. Accord­ing to Adobe’s ADI Retail Indus­try Report for Q2 2017, traf­fic via mobile for US retail­ers will over­take all oth­er devices by Q4 2017. Mobile-first shop­pers have stepped for­ward uni­ver­sal­ly, but there is par­tic­u­lar growth in Asia Pacif­ic. 44% of con­sumers in our region are cur­rent­ly using mobile shop­ping apps – the high­est rate in the world.

Hyper omni-chan­nel retail­ing

We tend to talk about omni-chan­nels as if it’s a new thing, but it’s not. If you take an ana­logue view of omni-chan­nel retail­ing, that might include adver­tis­ing in the Sat­ur­day paper, per­haps a dou­ble-page spread of the lat­est deal, prob­a­bly sup­port­ed by TV and radio ads, and pos­si­bly a time­ly let­ter-box cat­a­logue place­ment. Retail­ing has always been omni-chan­nel; what’s dif­fer­ent is that it’s now hyper omni-chan­nel.

Cus­tomers are now exposed to a huge num­ber of chan­nels across mul­ti­ple tech­nol­o­gy medi­ums such as social media, and those inter­ac­tions pro­vide much greater inti­ma­cy along the jour­ney.

Retail­ers con­stant­ly need to rethink how they struc­ture their offer­ings in the dig­i­tal age. This means man­ag­ing con­tent across chan­nels as well as design­ing their organ­i­sa­tions – peo­ple and process­es – for suc­cess.

Yet the core skills of know­ing your prod­uct, know­ing your com­pe­ti­tion and know­ing your mar­ket remain as vital as ever.

Key dif­fer­ences for exec­u­tives include the speed at which they now need to make deci­sions to deliv­er con­tent and expe­ri­ences across devices at scale and speed. Tools such as data ana­lyt­ics have become vital addi­tions to their armoury in this quest.

This chal­lenge is not lost on retail­ers, and exec­u­tives in all retail cat­e­gories are already mak­ing real­ly smart invest­ments.

As you look to the year ahead, it’s impor­tant to not feel over­whelmed. While the retail land­scape may seem like it has vast­ly changed, it may sur­prise many to learn that, while e-com­merce has been grow­ing by 20 per cent a year for a decade, online shop­ping still accounts for just 8.5 per cent of glob­al retail spend­ing.

Retail­ers know what’s com­ing and they are pre­pared. Mobile is wide­ly seen as a bridge between the dig­i­tal and phys­i­cal worlds. Adobe’s 2017 Dig­i­tal Trends in Retail report found 79 per cent of retail­ers believe that “under­stand­ing how mobile users research and buy prod­ucts” will be “very impor­tant” for them over the next few years.

Asked about the pri­ma­ry way their organ­i­sa­tions will dif­fer­en­ti­ate from com­peti­tors over the next five years, mak­ing the cus­tomer expe­ri­ence as “easy, fun and valu­able” as pos­si­ble ranked num­ber one, with 34 per cent of respon­dents cit­ing this as the sin­gle most impor­tant dif­fer­en­tia­tor.

Out of a range of tech­nolo­gies includ­ing AI, voice inter­faces, the Inter­net of Things and evolv­ing pay­ment mech­a­nisms, “engag­ing audi­ences through vir­tu­al or aug­ment­ed real­i­ty” is seen as the sin­gle most excit­ing prospect.

For the year ahead, I would nom­i­nate the fol­low­ing three pri­or­i­ties for retail­ers: under­stand how your cus­tomers want to engage with you; devel­op inter­nal skills and resources to ensure you are equipped to meet those needs; and under­stand the entire shop­ping jour­ney, regard­less of how cus­tomers spend their mon­ey with you.

Down­load Adobe Dig­i­tal Insights 2017 Hol­i­day Shop­ping Pre­dic­tions and learn about the total fore­cast­ed online hol­i­day rev­enue bro­ken down by day and device, top gifts on con­sumers’ wish lists this hol­i­day sea­son and the best days for buy­ing based on dis­counts and out-of-stock risks.

Digital Marketing

Join the discussion