Category: b2b

The future of retail: 6 growing trends in retail

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The future of retail: 6 growing trends in retail

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One thing to remember about the future of retail is that it’s not a question of whether consumers are shopping online versus at a brick-and-mortar location. Instead, it’s about how internet-enabled technology will improve the consumer’s experience on all shopping paths, whether they’re on the internet or in the shopping aisle. Treating both as part of the same marketing strategy is beneficial, as evidenced by the fact that opening a new physical location increases a store’s website traffic by an average of 27%. Brick-and-mortar and e-commerce can complement each other. The future of retail will be all about blurring the line between the digital and physical space. 

Mobile will be a crucial aspect of these omnichannel experiences as it will be used as a vehicle for delivery. Already, mobile is edging out desktop in terms of internet usage, with 57% of traffic coming from mobile devices. Brands and retailers that want to market to these users need to be where they are, and that’s on mobile. Due to that, many predictions on the future of retail center around devices that travel with consumers. 

#1. Deep Learning Will Drive a Shift Towards Discovery Shopping

Deep learning algorithms that track consumer purchase patterns, preferences, location, and interest will enable retailers to provide more proactive recommendations. Even something as simple as the consumer’s facial expression could be used to determine customer satisfaction and offer guidance to improve experiences. 

This data is crucial in supporting the growing trend of discovery shopping in the digital space. In the past, consumers who shopped online typically searched based on a specific need. Now, however, they may be driven to buy based on information they see on social media or via a digital lookbook. Essentially, it’s a form of digital window shopping that allows consumers to view a wide range of products.  

These consumers aren’t looking to fill a specific need. Instead, shopping is a leisure experience where consumers browse for fun. Using data to better curate content increases the chance that these browsers will be intrigued to make a purchase. With discovery shopping, brands should focus on creating an engaging user experience which drives consumers to interact with their products in a digital space.
In a way, Amazon’s Prime Day could be considered a form of discovery-driven shopping. Consumers who follow the platform on Twitter will see notifications about deals on specific products. This drives interest and improves purchase intent. The platform also uses data to send notifications to mobile users who’ve purchased similar items before. Finally, it engages users by building up the products and not announcing the sale until the exact moment of price reduction.  

#2. Rapid Delivery Will Aid E-Commerce Leaders in the Future of Retail

Same-day delivery is no longer an added service. It’s something consumers expect. Twenty-five percent of consumers report they will abandon their online shopping cart if same-day delivery isn’t an option. Retailers enhance their distribution options to respond to this demand. They open more centers in various locations to serve a growing pool of consumers who demand immediate services. However, investing in a massive distribution network isn’t always an option. In those cases, retailers turn to one of three options: 

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BOPIS:

For consumers who must have an item on the same day they order it, offering an option to buy online and pick it up at the store is ideal. Not only does this solution satisfy the same-day delivery need, but it also gets them to go to a physical location and possibly purchase more.

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Curbside delivery:

For some consumers, the inconvenience of walking into the store and waiting in-line is enough to make them abandon their cart. However, curbside pickup, where consumers can park in a designated spot and have their items brought out to their car, resolves this issue. This is a low-cost solution which provides the benefit of same-day delivery without the added expense.

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Third-party partnerships:

Some retailers are choosing to partner with third-party delivery services like Lyft to offer same-day delivery to consumers. This is especially popular in the grocery sector, as consumers are willing to pay more to receive perishable items the same day without the need to go to the store.

As demand for same-day delivery increases, so will the options for providing this outside of traditional mail services. Partnerships are likely to expand, which will enable stores to find more unique ways to offer this feature to consumers. 

#3. Brick-and-Mortar 2.0 Will Tie the Digital to the Physical Space

While online retail is popular, it’s still only expected to account for 20% of sales by 2025. Brick-and-mortar locations will still make up the brunt of transactions, but they’ll shift to support an increased need to be digitally connected during the path to purchase. This is the beginning of brick-and-mortar 2.0 and mobile optimization is needed for its success. 

Mobile connects consumers to the internet while they’re also browsing the shopping aisle, which exponentially improves the ability to market. Retailers and brands don’t even have to invest a lot of money into proprietary apps to make this happen. They can look to third-party partnerships. 

This is one of the reasons many brands choose to work with Shopkick. Shopkick partners with brands and retailers by giving them access to our highly engaged user base, which improves in-store engagement with products. This was the case when Rimmel London partnered with us on a campaign that leveraged consumer’s mobile phones to direct them to products in the shopping aisle.

Consumers could scan participating products with their phone’s camera and receive kicks (rewards points) which could later be redeemed for gift cards. Overall, this engagement helped the brand increase its market share in participating stores by 14%.

A plethora of options is available for brands who wish to partner with third parties to enhance in-store experiences. They should seek out those with a strong base of active users to garner the best results. 

#4. Technology Will Enable More Self-Driven Customer Service

Consumers in need of assistance with a product prefer to help themselves before they seek the aid of an associate. In fact, 67% of consumers prefer self-service over speaking with a company representative, with 75% noting it’s the most convenient way to resolve customer service issues. There are many options to provide these services, which vary widely in sophistication. Here are a few:  

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Forums:

Forums are probably the least sophisticated option, but they’re still a solution for helping customers help themselves. Individuals can publicly post their questions and receive answers from the company as well as from company personnel.

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Basic FAQs:

It’s crucial that all companies have some basic questions listed and answered if they’re frequently asked the same questions. These are often the first stop for a consumer with a problem, and when their issue is covered, the fix is simple.

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Interactive FAQs:

Smarter FAQs can take consumers through a series of questions to best determine their issue and help them resolve it. These troubleshooting programs are excellent for self-service as the individual gets a customized answer without the need to reach out to customer service.

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Sophisticated chatbots:

Chatbots have become so sophisticated that often, consumers don’t even know they’re talking to a computer program. These chatbots run on data which is analyzed for context and can guide them to the best solutions for these answers. As artificial intelligence grows, these bots will only become more sophisticated and capable.

The need for consumers to have access to self-service assistance is also a boon to retailers, as they save time and labor costs in responding to customer inquiries. By providing methods where consumers can get most of their questions answered, retailers and brands build affinity and prevent poor reviews due to response delays.

#5. Direct Sales Will Increase Across All Categories

The reason challenger brands have seen so much success is that they’ve been able to cut out the retail middle man by leveraging the internet to sell directly to consumers. This isn’t a strategy that works for all brands, as the product must be unique or offer an added service. 

Russel Stover is one such brand that has a unique selling point which works to drive direct sales. While the brand offers its pre-packaged candies in the store, consumers can also visit their site and make use of their “Build-a-Box” service to create customized treats. This provides added value to the product and encourages consumers to purchase directly from the brand.
Customization will drive a shift towards direct sales for all brands. The hardest-hit categories are likely to be items that consumers either buy on a schedule, like razors and vitamins, or need assistance buying, like baby care products. Brands in these categories should begin exploring direct sale options now to prepare for the future. 

#6. Online Search Will Move Beyond the Screen

It’s estimated that by 2020, 30% of all searches will occur without screens. This is largely interpreted to feature voice search but could also include more immersive categories like virtual and augmented reality. These new types of searches could present a paradigm shift for retailers, who have relied heavily on keyword-based text searches in their digital strategies. 

While this is a difficult category to predict, retailers should begin to focus on market leaders who gain the most attention from consumers in relation to their screenless experiences. Amazon, for example, is a market leader when it comes to smart speakers, which is why brands would do well to improve their listings on the Amazon platform to prepare for voice searches. 

Augmented and virtual reality are a bit more difficult to pinpoint as so many companies are delving into these areas. However, we can expect to see some movement from major retailers. Walmart, for example, has already filed patents for at-home virtual reality shopping experiences and it’s likely other retailers are developing their own solutions.
Of course, consumer adoption will play an integral role in how lucrative these new search options become. Voice was slower to take off as consumers haven’t quite gotten over the learning curve. Virtual and augmented reality will probably face the same issues. The screenless searchers retailers will see over the next few years will stem from early adopters and their retention rates will help them determine if the avenues are worth pursuit. 
Digital experiences that work both in the store and out are the future of retail. Today’s brands and retailers are leveraging better technology to provide faster shipping and aid customers. They’re also boosting their marketing results with better direct sales options, in-store mobile experiences, and updated features like voice search and augmented reality. All of these options improve the customer experience and can be used to enhance sales along with market share. 
Shopkick aids our partners in capitalizing on the future of retail by providing an innovative app with an active user base. For more information on how our app increases shopper engagement, see some of our success stories.  

How to retain customers in retail: 4 strategies to improve retention

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How to retain customers in retail: 4 strategies to improve retention

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Learning how to retain customers in retail is critical as about 65% of a company’s business comes from existing customers. Driving revenue requires a focus on getting customers through the doors, with an emphasis on encouraging them to come back again and again. Many consumers have specific retailers that they frequent for their shopping needs, and they often choose them because of the customer experience they provide. These retailers establish strong connections with consumers that keep them returning to the store time and time again.

A business in the U.S. loses 15% of its customer base per year. Often, these losses come not because the retailer did anything wrong, but because one of their competitors did something better. Leveraging tools like personalization, incentives, activism, and exclusivity in marketing can help to improve retention rates by creating deeper connections with consumers.

The Most Common Methods for How to Retain Customers in Retail

Customer retention in retail requires a consistent, ongoing effort. Customers may begin to explore other options if they believe a retailer has become indifferent to them, so it’s crucial for retailers to avoid this. The most common ways brands retain their customers include:

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Personalization:

Data and technology provide brands with several opportunities to truly personalize the marketing message. Retailers and brands can make recommendations based on a consumer’s purchase history, habits, and personal details. This can drive interest in products and create a deeper connection.

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Incentives:

Incentives like rewards points and discounts make consumers feel appreciated for their patronage. These incentives are low-cost to deliver and can create moments that inspire affinity for a retailer or brand.

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Exclusivity:

Consumers who feel like they’re receiving an exclusive or special benefit from a retailer creates a better connection as these consumers feel they’re getting a VIP experience. Meanwhile, consumers who don’t receive the exclusive benefit are driven to seek that status due to a fear of missing out.

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Corporate responsibility:

Socially conscious marketing helps retailers give their brand personality. When making a commitment to offer aid to those in need, protect the environment, or focus on sustainability, brands are also connecting with consumers who share these values. This value alignment can easily drive repeat business for a brand while positively impacting society.

These four methods offer retailers a path to creating ongoing relationships with the consumers they serve. As competition both online and in brick-and-mortar locations increases, these tactics will be necessary to maintain market share and convert loyalty to sales.  

1. Use Data to Personalize the Consumer Experience

Data is a great way to connect with new customers, but it’s even more powerful when leveraged to drive repeat sales. This is because the brand already has access to the consumer’s preferences, shopping habits, and purchase history—all of which can be used to target consumers.

One common tactic in reaching out to consumers based on their prior retail or brand interactions is remarketing. In remarketing, brands and retailers target consumers who have visited their website before but may not have made a purchase. The website collects data from the consumer which can be used to create a unique identifier for that individual. Then, brands and retailers can create ads that specifically focus on the items consumers purchased or viewed in the past. The results are extremely powerful. In fact, one European auto parts retailer reported a 161% rise in conversion rates by implementing a remarketing campaign, while also reducing their overall programmatic costs.

The high conversion is a result of leveraging warm leads and repeat customers. Marketers know it’s much easier to convert a consumer to sale if they are already familiar with the product or retailer. By using this strategy along with existing consumer data, marketers can personalize the message and keep customers coming back.

2. Leverage Exclusivity With Membership-Based Incentives

Exclusivity triggers a psychological need in consumers and is an effective marketing technique. Consumers want to believe they’re within an inner circle, or receiving benefits that others aren’t. In some cases, consumers are even willing to pay a premium to enjoy this exclusivity.

Amazon Prime is an excellent example of exclusivity in marketing. By paying an estimated $119 per year, consumers enjoy the benefits of free shipping, access to digital content, exclusive sales and other incentives. More than 62% of Amazon customers are members of Amazon Prime. In addition, Prime members spend nearly double what their non-Prime counterparts spend, averaging about $1,300 per year. This program is probably one of the most popular retailer-specific rewards programs in the world. Amazon managed this by:

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Providing real value:

Amazon Prime members have access to several exclusive benefits. The free shipping option alone will easily pay for itself after only a few purchases. In addition, these individuals gain access to music, movies, and television shows that they’d have to pay for otherwise, which makes this an appealing platform even for those who don’t do a lot of online shopping.

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Offering flexible membership:

While the $119 price tag may be a little steep for some consumers, they offer members the option to pay on a monthly basis, which makes the cost less intimidating. They also offer some specific programs that individuals can take part in, like Amazon Student, which provides additional discounts.

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Holding annual events:

One annual event that provides Prime with its biggest boost in participation is Prime Day. Every year, the retailer holds a single day of deals targeted at Prime customers which are announced on social media. In 2018, the retailer reported over 100 million products sold following the 36-hour event.

Retailers and brands that wish to inspire loyalty through exclusivity should look to Amazon’s Prime program as an example of how a retailer rewards program should work. By offering added value to the shopping experience, Amazon inspires consumers to return to their online store and enjoy the exclusive benefits their membership provides. 

3. Use Third-Party Mobile Rewards to Reach New Customers

Sometimes, retailers and brands don’t have their own in-house loyalty programs. Either they don’t have the resources to create or manage one, or they’re unable to see how a loyalty program would significantly benefit their business. In that case, retailers and brands turn to third-party options like Shopkick to incentivize consumers and reward them for shopping.

When eBay wanted to expand its presence and drive sales specifically in the mobile commerce space, the online retailer decided to contact Shopkick. Through the Shopkick app, eBay rewarded consumers for viewing its mobile site and interacting with products. Additionally, Shopkick showcased some of eBay’s top products to drive awareness, and provided kicks (rewards points) to consumers for taking actions like installing eBay’s mobile app or purchasing products. Overall, eBay saw a 6% app install rate and a 62% increase in new audience visits.
Working with a third-party app like Shopkick allows brands and retailers to reach new consumers, as these apps come with built-in databases of highly engaged users. The incentives encourage consumers to interact with products and establish positive brand and retailer affinity. In addition, these mobile rewards provide a better return than standard discounts and sales, as they do not require the retailer to immediately take a loss on the product, or dilute margins. Instead, these incentives are fueled by rewards points that consumers can later redeem for gift cards.  

4. Align With Customers Through a Cause

Retailers can reach their target markets by aligning themselves with causes that are important to the consumers they serve. Sharing a passion for protecting the environment, improving society, or helping those in need can enhance a brands reputation and build a sense of humanity. Whole Foods is one retailer that has used its activism to align with its target market.

Whole Foods’ Environmental Stewardship initiative focuses on leading the way when it comes to green initiatives. To support this, they’ve taken steps to eliminate food waste, implemented solar energy programs at 60 of their stores, rolled out a fleet of electric delivery vehicles, and developed green building standards for locations. All of these efforts solidify Whole Foods as a leader in “going green,” and for this reason, consumers who consider this a priority choose to shop with them. Whole Foods’ cause-based marketing works because it:

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Provides real results:

When sharing details regarding an activism program, it’s important to show real results and statistics that indicate the company is making progress. When sharing its results, Whole Foods specifically highlights the efforts they’ve taken to improve the environment and reach their sustainability goals. This underlines that the campaign isn’t just a marketing initiative; it’s about making a real difference in ways that matter.

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Gets consumers involved:

Individuals who follow brands or retailers because of their activism are always looking for new ways to contribute. By providing initiatives that help people get involved on a personal level, retailers can spread the message and widen their efforts. Whole Foods offers tips and tricks for individuals who want to reduce their carbon footprint and get involved in sustainability efforts in realistic, everyday ways. This helps the company align the individual consumer to their cause.

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Offers support at a community level:

Focusing on local communities is important in sharing activism efforts, as individuals want to see how these programs impact them directly. Whole Foods works with local organic producers and farms to further their sustainability efforts and reduce their carbon footprint. This is beneficial for the communities they serve which helps to drive interest in their stores.

Activism-based marketing must come from a genuine place to create a connection with consumers. When the message is real, actionable, and effective, consumers are far more likely to align themselves with a brand or retailer and make future purchases with them.
Options for retaining customers in retail should center on connecting with them through added value. Apps and programs that offer incentives can help to build customer affinity and expand the brand or retailer’s reach to new consumers. Meanwhile, cause-based marketing aligns those consumers with companies that support the things that are important to them. The ability to retain customers is crucial in retail which is why brands should consider proven options in building mutually beneficial relationships.  
Shopkick aids our partners when they’re looking at options for how to retain customers in retail by providing a unique and engaging shopping app. To see how our program has helped other brands and retailers, review some of our success stories.