Retail Trends Changing the Landscape
Retail is a fast-paced industry which must constantly evolve to meet consumer’s changing expectations. Disruptors such as the steady rise of eCommerce, the age of Amazon, the influx of more consumer data, and the increased speed of doing business means retail brands must constantly adapt or lose to more nimble players.
The Continued Rise of eCommerce
eCommerce continues to see massive growth, however brick-and-mortar stores are still vitally important. According to research by Entrepreneur, brick-and-mortar establishments sell 10 times more than e-commerce shops.
Additional statistics include:
- Overall, some 51 percent of Americans prefer to shop online, while the remaining 49 percent would rather go to a store
eCommerce is growing 3 times faster than traditional retail, with a growth rate of about 15 percent compared to 5 percent growth for brick and mortar stores
In the US, customers make an average of 19 purchases online per year, the second most in the world behind Asia
However, people spend 64 percent of their shopping cash in stores, compared with 36 percent online
As the leading giant of eCommerce, Amazon has grown from $34 billion in 2010 to a projected $303 billion in sales in 2020
However, despite the growth of eCommerce, it is forecast that in 2023, 85% of retail purchases will still be made online.
In-Store or On-Line?
Most consumers don’t shop on only one channel or another, but shop across multiple channels. An estimated 81% of shoppers conduct online research before making big purchases. A study published by Bazaarvoice demonstrated that in-store shopping behavior is significantly influenced by online research. The research showed that 82% of smartphone users consult their phones on purchases they are about to make in-store and 45% read reviews before making a purchase.
According to a Roth Capital Partners survey, as cited by eMarketer, some 43% of Millennials research online and buy in-store, 20% both research and buy in-store, 19% both buy and research online, and 13% research in-store and buy online.
In 2019, it is even more imperative that retailers master both on-line and off-line channels in order to serve consumers, provide personalized experiences, and cater to the needs of shoppers wherever they many be on the purchase journey.
Last year, the concept of connecting online-to-offline commerce or O2O gained massive interest. O2O is a business strategy designed to bring online customers to brick-and-mortar locations (or vice versa) and provide a personalized experience throughout the process. The goal is not to move consumers from one channel to another but to provide seamless access to the channel that makes the most sense for the consumer.
O2O commerce lets companies treat online and offline channels as complementary rather than competitive. For example, brands may target consumers while they are researching online with offers to bring them to their stores if the consumer is not yet ready to make a purchase. Brands may also offer in-store pickup of products purchased online, online purchase of products while at a physical store, or allow online purchases to be returned to physical locations.
Integrated online and offline experiences will only be successful and drive outcomes if the customer experience is positive and personalized. Almost a quarter (23%) of Customer Experience marketers cite ‘rising customer expectations’ as one of the top three industry trends (The Global State of Customer Experience 2017). Consumers want to be known and valued throughout touchpoint and interaction with a brand along the purchase journey. To deliver this type of hyper-personalization, brands must use data and analytics to develop a holistic customer view and gain visibility into channel engagements.
Many retailers continue to struggle to deliver these connected experiences. According to a new study by Periscope™, a McKinsey Solution, 78% of retailers lack a single brand experience across all channels, and 64% acknowledged that “a well-defined cross or multi-channel strategy” was the top innovation that would drive digital growth.
Customer Data Platforms (CDPs) are quickly gaining momentum as the most promising new marketing technology to streamline data-driven processes, develop a unified customer view, and activate these insights across channels. A report by Martech Advisor offered the following definition:
A CDP as an evolution of something all modern marketers (should be) familiar with – a marketing database. In this case, a CDP is a marketing database purpose-built for the API-driven world and ‘pick and mix’ marketing technology stacks in mind, while also allowing for the integration of offline sources and legacy database and infrastructure.
At their core, CDPs have three primary functions:
- They pull in customer data from the disparate data systems of your choice
- They match, merge and cleanse this data into a unified record for each customer
- They make these records visible to your other marketing tools to ensure the consistent treatment of customers
With this seamless customer view in place, brands can deploy customer journeys that engage uniquely at different stages in the journey, depending on the individual’s behavior. Any number of journeys can be created such as recognizing if customers have visited your website, browsed certain product categories, opened marketing emails or visited store locations.
For those retailers who offer personalization throughout the purchase journey, the four most commonly cited benefits include:
- 74% – an increase in sales
- 61% – an increase in profits
- 58% – an increase in online traffic
- 55% – an increase in customer loyalty
As retail customer journeys become more omnichannel than ever before, marketers must ensure they are collecting data and providing optimized experiences, wherever and whenever a consumer decides to purchase.