Shopping experiences continue to evolve, sometimes very rapidly.
In the wake of repeated retail store closings and industry-changing acquisitions, such as Amazon buying Whole Foods, retailers must meet the challenge of the new environment by exploring opportunities to deliver outstanding product research and buying experiences. While some may fail to adapt, retail brands that persist will need to do a better job in five key areas.
Connecting physical and digital experiences
Retailers must recognise that the customer journey is no longer linear, but has become an omnichannel, fluid experience. Therefore, brands should create seamless experiences that connect touchpoints between desktop, mobile, and in-store engagements.
How can you accomplish this? By taking a customer-centric view of the entire journey. As you strategically build an omnichannel approach, ask your team questions such as:
- How do our consumers research their buying decisions? Which channels are involved?
- Where do they make most of their purchases—online or at the store?
- How do we integrate digital channels with point-of-sale, inventory management, and customer support systems so data is shared?
- How do we create a journey that can be picked up anywhere through a persistent customer profile connected to previous engagements?
It’s important to view your web and mobile properties as a means to inform and inspire store shopping. As some retail brands face challenging times relative to their brick-and-mortar presence, they must focus on ways to improve foot traffic. They can do that with a healthy dose of customer data. Data must inform the decisions brands make, so integrating online and offline data in a way that drives store visits is crucial.
Addressing the direct-to-consumer disruption
A trend is developing. Innovative brands are following the lead of Apple and Tesla by taking their products directly to consumers, therefore optimising the number of players involved in their delivery channel. Due in part to tighter margins and easier customer access through mobile and desktop, a direct-to-consumer (DTC) model can be appealing for certain brands.
How do retailers adjust to this trend? First, they must improve data sharing with their suppliers. Brands want to know more about their customers, which is why some have chosen to deploy a DTC model. Sharing customer intelligence with supply chain partners can help improve product development and help prevent profit margins from shrinking further.
Next, retailers must do a better job of connecting the consumer experience with brands to the experience offered in store. Apparel retailers that sell merchandise to outdoor enthusiasts, for example, should closely align both their online and in-store messaging and content with the excitement and enjoyment of outdoor activities.
Mastering the art and science of attribution
A significant challenge for retail marketers is understanding how their efforts contribute to buying decisions. Which channels influence purchases? What messaging resonates the strongest? How much impact does content personalisation provide? Marketing attribution can answer these questions to a degree.
Retailers must find an effective way to assign credit to marketing activities that leads to actions such as purchases. Attribution is a tricky proposition—71 percent of respondents in a January 2017 study indicated that attributing social and content to revenue is a top challenge in proving return on investment.
So, how do retailers succeed at attribution? There is no easy answer to this question, in terms of process. Retail marketers can design either a unique model based on customer data or follow an established model. What is important, though, is how to apply the attribution model to generate stronger synergy between the brands they carry and the shopping experiences they offer—both online and in store.
Adapt to a voice-activated shopping model
Voice-enabled devices have the potential to significantly disrupt the retail shopping experience, though it will likely take some time. These experiences can change the shopping dynamic from a web-based, visual process to a voice-based one. It’s not surprising to see the developing battle between Google’s Home, and Amazon’s Echo, given their ability to simplify product selection and delivery.
I don’t expect voice-activated shopping to become a standard for all verticals, but retailers, especially smaller retailers, will need to find a way to leverage this technology and keep the domain from becoming monopolised by larger brands.
Improving the in-store experience
Late last year, one study found 44 percent of retail executives in Germany, Japan, the UK, and the US claiming that improving in-store experiences was a strategic priority for the year. As mentioned previously, seamlessly connecting the digital experience with brick-and-mortar visits is critical to a successful in-store experience.
As technology such as voice-activated devices and interactive kiosks allow for greater shopping sophistication, retailers should also focus marketing efforts around building excitement about being at the store.
How can retailers improve in-store experiences? For one, they should provide store associates with technology, tools, and information that can enable them to provide value to the brick-and-mortar shopper. A recent report indicated that “retailers are expanding the use of mobile technology by giving associates mobile devices and apps with specific aims to use them for customer identification, customer engagement, associate training and task management, point of sale (POS) and payments.” This will surely improve the in-store experience.
As a rule, retailers will need to migrate to the “store of the future.” What does this store look like? First, it will likely have a smaller footprint. The pressure to optimise space is leading some retailers to reduce inventory for the sake of lower overhead costs.
From there, the image of the store of the future varies. For instance, a remarkable 24-hour convenience store concept is being developed in China. It has no staff and no registers, is completely mobile, and will self-drive to a distribution center or deliver goods to customers.
The wonderful thing about the store of the future is two-fold: one, it will rely heavily on technology, which can help with tight profit margins, and two, there will be little limitation on the creativity used to develop concepts.
In closing, it will be important for retail brands to embrace change. We are in a period of both great upheaval and great opportunity. Retailers should be open to leveraging technology, particularly marketing technology, to meet their customers’ expectations. As this retail disruption continues, the brands that survive will find ways to improve shopping experiences, expand or maintain margins, and provide consumers with the most satisfying post-purchase and loyalty-building interactions.