How the entry of new technologies and the evolution of consumers are redesigning the retail experience? A general view by Axel Heyenga of Adobe.
This is a time of profound transformation for the retail industry.
The entry of new technologies and the evolution of consumers, now more demanding than ever, have led to rethink the way in which customers are engaged and driven to buy. Let's see what are the first significant signs that something new is appearing on the horizon:
- Thanks to the Amazon effect, more and more companies are creating value out of aggregation (acquisitions, partnerships, marketplaces, etc.). Aggregate demand allows platforms to collectively negotiate better conditions. Data confirms this: 40% of online retail is going to be transferred to marketplaces by 2020.
- Subscription plans are also very popular: the customer pays for a subscription fee to receive a series of products directly at home. 25% of Millennials have received a “subscription box” in the last month.
- Customers expect more and more convenience and customization. 80% of respondents to the 2018 Consumer Expectations Survey believe that companies should provide personalized services, both online and offline. On the other hand, only 55% of companies feel mature enough to provide them.
- Consumers are connected, and increasingly integrated strategies between online and offline are required, so that users can seamlessly switch from one channel to another. Just think that 28% of consumers already buy online and pick up at the store. Moreover, mobile traffic (smartphone+tablet), with 54% of the users, has eventually surpassed desktop traffic.
- We are moving in the direction of conversational commerce (smart assistants, shareable experiences, etc.). 40% of Millennials have make voice purchases (in this sense, for companies to be able to be found by voice search is a big step forward!) and 59% of them willingly provide their e-mails or share a brand’s post in exchange for a better online experience.
The ABCD method
Retailers need to focus on four key elements.
1) Give customer an Adaptive experience
Brand loyalty is a continuous journey, especially when it comes to young consumers. In order to win them over, even brands with a strong tradition need to ask themselves if they are aligned with their values (e.g. environmental sustainability) and create experiences that can keep up with their expectations.
2) Be wherever they love to be
Technology allows you to interact with your customers across different touchpoints, both online and in store, to offer them the right content and products at the right time of their consumer journey.
3) Help them filter Choices
In the overabundance of goods in the market, data analysis is essential to guide your customers’ choice with relevant purchase suggestions.
4) Differentiate through immersive experiences
Technologies such as AR, VR, etc. enter the field to create increasingly engaging experiences.
But the starting point must be the data. There are four types of data that are indispensable:
- The customer’s interests
- Their status quo
- Their characteristics
- Their communication preferences
With this dataset, you can predict consumer behavior, understand which messages are the most relevant for them, and how they prefer to be engaged.
However, it is essential for brands to own the data. Knowing context data is certainly important, but it is First Party Data that makes the difference in the interaction with your customers: it provides the starting point to understand which is the best offer to make or the most effective action to take.
The benefits of this method were reported in an independent research by Forrester: we are talking about a 36% turnover growth rate.
What should retail brands be doing
1) Redesigning the retail experience
Retail brands need to focus on experiential shopping, both online and in-store, and to be where the consumer is.
2) Optimizing the customer journey
The experience must be enjoyed perfectly, regardless of the user’s screen size or location.
3) Scaling customization
It is advisable to use the power of AI, and of Machine Learning in particular, to analyze large amounts of data and anticipate the consumer’s wishes, make targeted purchase recommendations and guide them by filtering their choices.
Content is an asset that companies have in abundance, but still cannot manage profitably enough. With the support of data and AI, they can be precisely connected to consumers, to guide them through the touchpoints, up to conversion.
4) Having a limitless assortment
It is suggested to expand your store's product assortment with a digital catalogue, so that you are always ready to respond to your customers’ requests.