As UK etailers are poised to see a 16% rise in sales by the close of 2014, we’re reminded that retailers were the first to bear witness to the rise of the digital consumer and the first to realise that today this includes everyone. The ordinary challenges retailers faced have been compounded by an increasingly global market place that can be accessed by anyone, anywhere at anytime.
The average UK household has more than 11 media- enabled devices under one roof, and the convergence of all these channels now means that product engagement and research is happening in real time. For example around 60% of Generation X and 65% of Gen Y now use a tablet, re-confirming that multiple device usage is still on the rise.
As this further drives the fragmentation of people’s attention, their shopping behaviour continues to evolve. Two thirds of 18 to 24 year olds confess to openly sharing personal data with retail brands, and 36% of them do it in exchange for promotional discounts. So retailers are now in a unique position to pool large volumes of consumer data and use it to mould their communications in real time.
Technological developments such as 4G, public
Wi-Fi and superfast broadband (which BT believe has contributed an extra £225m in the UK’s online spend this year alone) have led to the emergence of new ideas and trends that capitalise on this new found data haven. Showrooming (the practice of browsing in-store then finding the best price online) has surged, with retailers estimating that it steals 32% of revenues from their high street stores. In addition 57% of smartphone users admit to browsing online while out shopping These examples highlight a period of empowerment welcomed by consumers, but also presents a real opportunity for retailers, if they can overcome their fear and embrace the consumer-driven change.
After all there is still a competitive advantage to be grabbed, and we can’t help feeling this lies hidden in
the rising expectations of the digital consumer. Choice, Convenience and Price have been the traditional battle- ground for retailers, a throwback to catalogues. But a great retail experience still finds loyal customers. So what is the online shopping experience of the future, and how should this differ from the traditional retail model many try to emulate online?
Here at The Agency we believe that the most successful retailers of the future need to do four things.
1. Always remain aware of the changes in consumer behaviour and the evolution of their expectations. Retailers must seek to know every aspect of their customers’ shopping cycle. This includes when they shop, where they shop, why they shop and how they shop – by device.
2. Connect with people at the best time and place.
Most retailers initially opposed the idea of shoppers showrooming. But there is no way to prevent it. Retailers who embrace showrooming, using it to promote in-store discounts, price matches or even exclusive high street ranges have seen a surge in sales and embarked on successful loyalty programmeswith their customers. But why stop there? Marketing automation tools and real-time data mining is helping retailers deliver a designer shopping experience.
3. The most successful retailers will be integrated and optimal. Every consumer touch point will deliver
a seamless, relevant and potentially unique brand experience. Retailers must choose the right path for their web and mobile channels. Responsive websites, separate mobile sites and app development are just the beginning.
4. Retailers still need to be mindful of their own promotion. It’s not just about product and price, it’s about being found – easily. By optimising consumer touch points for smartphones, tablets and in-store, they are more likely to appear on search engines and be shared among online communities and social networks. To support this move, Google Adwords has shown that mobilealready accounts for 38% of paid search clicks in the UK and 26% of all paid search spend.
Daunting as it may seem, we believe for many, adhering to the above principles will prove the difference between successful growth and obscurity, not just in etail but in retail as a whole. All retailers need to embrace etail, just as all consumers are now digital consumers.
In recognition of this we have found that many retailers have already started to break down the walls between their sales, marketing and IT departments, allowing
them to develop a common integrated approach to communications and technology. But while this process is heavily data centric (we have seen 61% of UK retailers increase their analytics budgets in 2014) a retailer’s
future advantage won’t just rely keen pricing systems, timely emails and predictive data models. We must
never underestimate the impact of creativity for brand engagement, reputation and customer service. Ultimately to provide cross channel shopping experiences that today’s digital consumer is coming to expect. In short a bespoke designer shopping experience.
(Sources: Google, Webtrends, eConsultancy, Institute of Direct & Digital Marketing, eMarketer, The Telegraph, Mobile Commerce Compendium)