There is no doubt that the retail landscape is going through drastic changes fueled by customer interaction and expectations as well as readily available technology and actionable data points. I attended the Shoptalk 2016 event this past week to hear how retailers are navigating this new landscape and learned that while there are many retailers that are doing great things in one area, no one has truly cracked the code to figure it all out yet. But that’s okay. At this point, small changes can make a huge impact to your bottom line.
The Customer is in Control
One of my favorite quotes from Shoptalk 2016 came from Jonathan Alferness, Google’s VP of Product Management – Shopping. He said, “We don’t go online. We live online.” It’s true. Your customers are always connected, which provides a lot of opportunities but also a lot of challenges. You can’t abuse the access. You must carefully craft all interactions while letting the customer be in control.
Customers are now the Point of Sale, which means you have to meet them where and how they shop in order to remove all friction from the customer journey. Omnichannel and multichannel strategies have been replaced by a distributed commerce model as there can no longer be ANY divide between channels. Customers don’t shop in channels, they simply interact in a way that is most convenient at any given time and the distributed commerce model provides a way for them to purchase any product anywhere at any time.
This is a big win for retailers as it provides more opportunities to engage shoppers through carefully curated content and events that enhance the customer experience. This means retailers don’t have to rely on promotions to win business. The great experiences lead to longer lasting relationships and greater customer loyalty than a simple reward program or discount code ever could.
What does this mean for you?
Personalize the Experience for Each Customer
Many shoppers are turning to retailers’ sites for product information, not necessarily to transact. It’s not enough to just be online anymore. 90% of all retail revenue comes from in-store transactions and 34% of online revenue comes from mobile devices. What’s even more interesting is that at 45%, nearly half of all purchases – online or in-store – include mobile at some point. In most cases it is the first touchpoint with customers so you should think “mobile first”. Best in class mobile engagement drives traffic to stores, enhances experiences and provides data to personalize future messages.
If you don’t currently have a store, now it the time to think about adding a physical location. Real-time retail is still the most viable sales channel but it’s important to note that there are many business models, such as Bonobos, where the stores don’t carry any inventory. They exist as show rooms where customers can interact with sales associates and each other, try on or experience the merchandise firsthand, and then order products in the store or later on their mobile device or computer.
Stores are offering more entertainment options to increase loyalty – such as private gyms, parties, paint or yoga classes, live music, etc. In some extreme cases, retailers focus on these interactions while the transactions are automated, giving customers control as they can do everything from add items to their fittings room, request new sizes and checkout without needing to talk to a sales associate. Instead, the sales associate is there to enhance the experience without “selling”.
What does this mean for you?
Distributed and Conversational Commerce Level the Playing Field
Nearly every retailer competes with Amazon. But this shift in consumer behavior helps to level the marketplace as it gives you the opportunity to connect in more personal and meaningful relationships with your customers than what Amazon can currently provide. While shoppers – especially Prime members – turn to Amazon because of the convenience, the relationship doesn’t go much deeper than that. There isn’t much of an emotional connection.
You just have to think creatively while listening to your core group of customers to deliver what they want, when they want it. And, when you do that, you will have cracked the code to distributed and conversation commerce.