Last year we examined the emerging retail apocalypse and explored the benefits of personalized marketing as a solution. In this blog we focus on what’s driving the changing face of the industry and how retailers are responding.
Innovative use of technology by retailers like Amazon have instigated a significant shift in consumer behavior and demands and the decline of once industry-leading brands such as Sears has led to what’s being called a ‘retail apocalypse’. Traditional retailers who have been slow to establish a digital presence have found themselves grappling to maintain market share as digitally mature competitors are engaging consumers on an increasingly personal level.
And while, according to Forbes there are indications that the retail apocalypse might not be as ‘apocalyptic’ as initially feared; for example 2019/20 holiday sales in the US were strong in brick and mortar stores and 3,500 new retail doors opened in 2019, the number of retail doors that closed is still significantly higher.
The empowered consumer
Current research shows that most consumers still prefer to shop at brick and mortar stores, but often make product selections from research conducted in digital channels. Furthermore, consumers expect to be engaged by brands across multiple channels, particularly mobile.
Research in the 2019 Salesforce ‘State of the connected consumer’ report tells us that 84% of consumers say the experience a company provides is as important as its products and services. And 73% say one extraordinary experience raises their expectations of other companies.
With the rise of intriguing new shopping experiences, shorter attention spans and more product choices than ever before, consumers are increasingly demanding personalized engagements. And most importantly, they want to be recognized as individuals across all channels.
However, what we’re seeing is that while brands globally are focused on digital transformation and understand the vital role of personalization in delivering great experiences for connected and discerning consumers, they are challenged with identifying customer engagement strategies that align with their specific audiences, business goals and digital maturity. Quite simply, this is a moving feast with many different components.
Mobile is the enabler of a connected marketing strategy, representing the marketer’s most intimate link to the customer. What began in the late 1990s with simple SMS offers has matured to a world where mobile searches eclipse desktop searches (since 2015) and mobile advertising spend in the U.S. surpassed all other online advertising modes to dominate in 2018. A key reason for this growth: Consumers have gone from spending minutes a day to as much as five hours of use per day on their smartphones. In fact, in 2018, worldwide, consumers spent two-and-half more time on their mobile devices (primarily smart-phones but some also use tablets) than on desktops or laptops.
The importance of mobile
We know that there will always be demand for physical retailers. But there has also been a blurring of the digital and offline worlds over the last five to ten years, largely due to mobile. It’s where consumers spend most of their time and is the channel they most want to engage through.
Transforming customer engagement – focusing on a ‘market of one’
Surviving in this modern retail landscape is about creating moments of magic between brands and consumers. That is, delivering exceptional experiences that leaves customers feeling recognized and valued. Where B2C has morphed into B2Me, a mobile-first strategy that includes personalization is central to achieving this.
Technology can be harnessed to make each customer feel as though their experience was designed just for them, but it must be underpinned by a robust customer engagement strategy that identifies roles, responsibilities and processes. We’ve seen first-hand how deep personalization on mobile has made all the difference for clients such as McDonald’s, White Castle and 7-Eleven.
Much of the change happening in the retail world is being driven by rapidly evolving consumer expectations. The only way to remain relevant is to move to a more meaningful 1:1 model of connecting with consumers.
In our next blog we’ll go deeper into how data and Artificial Intelligence can be harnessed to transform your retail customer experience.