There is no better time to be a consumer than today. With an endless choice of products, few limits on in-store availability or location, and an abundance of information, consumers can own their own shopping destiny. While these same trends provide brands and retailers with a plethora of opportunities to reach shoppers, keeping their attention and loyalty is the hardest it has ever been.
It will take smart bets and consistency for brands to earn their consumers’ business and keep them coming back for more. Take a look at why the devotion to the consumer, cross-channel activities, and unique experiences will be necessary factors to stand out in the modern retail crowd:
Consumer Loyalty is Priceless
As consumer loyalty reaches all-time lows, if actually obtained, it is one of the most valuable assets for a brand to have. Not only do pleased, loyal customers make repeat purchases, they also spend more. The loyal top 10% of customers spend three times more per order than the lower 90%, and the top 1% of customers spend five times more than the lower 99%.
To make up for the challenges in consumer trust, brands and retailers are turning to their customers to advocate for them. Throughout the purchase journey, from advertising to photos on the product page of their website, they are beginning to prioritize content created by real people. Beyond this user-generated content, companies are also innovating with ways to connect their shoppers to each other through brand communities (like LEGO’s Idea’s community) and events (like Lululemon’s in-store workout classes) to keep shoppers interested, united, and invested.
Omnichannel is No Longer a Choice
Today’s purchase journey no longer takes place on the same straight road it used to, but on an inter-connecting highway of touchpoints. Activities ranging from product discovery to research to conversion, can occur in any number of places, from the traditional store to your social media feed. Because of consumers’ reliance on not just one avenue of purchase, brands and retailers need to continue to prioritize seamless, omnichannel shopping experiences in 2020 and beyond.
Although e-commerce has become a cornerstone of the retail landscape, the fact remains that a majority of sales still occur in-store. An example of omnichannel success is the adoption of buy online, pick up in-store options by many major retailers: shoppers may see a product they like while scrolling Instagram, decide to make the purchase through a laptop, drive to pick up the product at a physical store, and again use their phone to confirm the purchase. Using BOPIS and curbside pickup offerings, retailers are finally realizing the importance of their store footprints as valuable online signals. Retailers benefit by offering a cohesive, omnichannel shopping experience, saving on shipping expenses, and getting consumers in store where they are likely to make additional purchases. On the other hand, shoppers are able to physically see and feel a product before taking it home, get it in their hands faster, save on shipping fees, and, if necessary, return or exchange products right away.
Personalization is High Risk, High Reward
As retail becomes more data-driven, brands and retailers are dipping their toes into personalization in a variety of ways. Online, this might look like product recommendations or curated homepages. In-store, it can take the shape of digital fitting rooms, product customization, or store associates that can pull up information on previous purchases or saved items.
When done right, personalization can provide a special experience for shoppers, but, if done incorrectly, it can push them away. In fact, according to our annual research, 44% of US consumers say they get frustrated when retailers fail to provide relevant personalized experiences. Even with this risk, it is high on the priority list for companies everywhere, but they have a long way to go to meet consumer expectations. Less than 20% of shoppers say the product recommendations they see are relevant. In recent research, Gartner predicted that 80% of marketers who have invested in personalization will abandon their efforts by 2025 due to lack of ROI, the perils of customer data management, or both — brands and retailers may look to other, more proven strategies to provide efficient, enjoyable shopping experiences.
Due to the ever-changing and unpredictable nature of the modern customer journey, brands and retailers can struggle reaching consumers and turning them into customers. But beyond that, what is the most challenging, and also the most valuable, is building loyalty and convincing those customers to return. By engaging with customers authentically and providing convenient, personalized, and omnichannel experiences, brands and retailers can do what it takes to stand out from 2020’s crowded retail landscape.