Category: Marketing

Retailers Turn to Hybrid Cloud and AI to Meet Shifting Consumer Behaviors

Posted on by shopkick

As the pandemic has transformed the nature of work with more employees working from home than ever before it has also changed how consumers shop according to new study from IBM and the National Retail Federation. 

The new global study of over 19,000 titled “Consumers want it all” revealed that hybrid shopping which mixes physical and digital channels in shopping journeys is on the rise as a result of shopping habits consumers adopted out of necessity that are now becoming routine. 

Of those surveyed, almost three quarters (72%) said that they use retail stores as all or part of their primary purchase method. The reasons they gave for visiting a store include touching and feeling products before buying them (50%), picking and choosing their own products (47%) and getting products right away (43%). 

However, 27 percent of respondents said that hybrid shopping, where part of their shopping journey is conducted online and the other half takes place in a retail store, is their method of choice. When it came to the generation most likely to be a ‘hybrid shopper’, Gen Z consumers lead the way when compared to other age groups. 

VP of research and development and industry analysis at the National Retail Federation, Mark Matthews explained in a press release how hybrid shopping represents a fundamental shift in consumer behavior, saying: 

“While many surveyed consumers still place high value on the traditional in-store shopping experience, they also now expect the flexibility to build their own shopping journey – according to the behaviors prevalent to their age range, available tools and the product category they are looking to purchase. This ‘hybrid’ approach is a fundamental shift in consumer behavior.”

Growing importance of sustainability

While adoption of hybrid cloud, AI and other technologies can allow retailers to create bespoke hybrid shopping experiences, IBM’s new study has also revealed that they’ll need to keep sustainability in mind to retain and grow their customer base. 

Purpose-driven consumers that choose products and brands based on their own values like sustainability are now the largest segment of consumers surveyed (44%) according to the study. At the same time, 62 percent of respondents are willing to change their purchasing habits to reduce environmental impact which is up from 57 percent two years ago. 

Half of respondents said they are now willing to pay an average premium of 70 percent for sustainability which is roughly double the premium from 2020. Still though, there is a gap between intention and action with only 31 percent of respondents saying that sustainable products made up most or all of their last purchase. 

Dglobal managing director of IBM Consumer Industries, Luq Niazi provided further insight on the study’s findings and the growing importance of sustainability to consumers, saying: 

“The survey shows over the last year, sustainability became increasingly important to consumers, though there’s still a gap between their intentions and actions due to lack of information in the buying process. Increasingly, it’s becoming essential that retail brands demonstrate sustainable choices and options in each step of the customer experience.  At the same time, hybrid shopping has taken hold in most categories, particularly in home goods and apparel; and while stores continue to play the predominant role in grocery, hybrid shopping is growing in these categories too.”  

We’ve also rounded up the best ecommerce platforms and best shopping cart software

This article was written by Anthony Spadafora from TechRadar and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com. 

Retailers Turn to Hybrid Cloud and AI to Meet Shifting Consumer Behaviors

Posted on by shopkick

As the pandemic has transformed the nature of work with more employees working from home than ever before it has also changed how consumers shop according to new study from IBM and the National Retail Federation. 

The new global study of over 19,000 titled “Consumers want it all” revealed that hybrid shopping which mixes physical and digital channels in shopping journeys is on the rise as a result of shopping habits consumers adopted out of necessity that are now becoming routine. 

Of those surveyed, almost three quarters (72%) said that they use retail stores as all or part of their primary purchase method. The reasons they gave for visiting a store include touching and feeling products before buying them (50%), picking and choosing their own products (47%) and getting products right away (43%). 

However, 27 percent of respondents said that hybrid shopping, where part of their shopping journey is conducted online and the other half takes place in a retail store, is their method of choice. When it came to the generation most likely to be a ‘hybrid shopper’, Gen Z consumers lead the way when compared to other age groups. 

VP of research and development and industry analysis at the National Retail Federation, Mark Matthews explained in a press release how hybrid shopping represents a fundamental shift in consumer behavior, saying: 

“While many surveyed consumers still place high value on the traditional in-store shopping experience, they also now expect the flexibility to build their own shopping journey – according to the behaviors prevalent to their age range, available tools and the product category they are looking to purchase. This ‘hybrid’ approach is a fundamental shift in consumer behavior.”

Growing importance of sustainability

While adoption of hybrid cloud, AI and other technologies can allow retailers to create bespoke hybrid shopping experiences, IBM’s new study has also revealed that they’ll need to keep sustainability in mind to retain and grow their customer base. 

Purpose-driven consumers that choose products and brands based on their own values like sustainability are now the largest segment of consumers surveyed (44%) according to the study. At the same time, 62 percent of respondents are willing to change their purchasing habits to reduce environmental impact which is up from 57 percent two years ago. 

Half of respondents said they are now willing to pay an average premium of 70 percent for sustainability which is roughly double the premium from 2020. Still though, there is a gap between intention and action with only 31 percent of respondents saying that sustainable products made up most or all of their last purchase. 

Dglobal managing director of IBM Consumer Industries, Luq Niazi provided further insight on the study’s findings and the growing importance of sustainability to consumers, saying: 

“The survey shows over the last year, sustainability became increasingly important to consumers, though there’s still a gap between their intentions and actions due to lack of information in the buying process. Increasingly, it’s becoming essential that retail brands demonstrate sustainable choices and options in each step of the customer experience.  At the same time, hybrid shopping has taken hold in most categories, particularly in home goods and apparel; and while stores continue to play the predominant role in grocery, hybrid shopping is growing in these categories too.”  

We’ve also rounded up the best ecommerce platforms and best shopping cart software

This article was written by Anthony Spadafora from TechRadar and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com. 

Predictions 2022: Entering a New Era of Hybridization for Retail

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The retail sector is in “a momentous period of change” with the pandemic sparking mass market disruption for both big heritage brands and small, local businesses. The evolution of the traditional retail experience has presented marketers with a ripe opportunity to re-examine their strategies and rework their offerings, to create a more connected experience in-store and online. 

As part of The Drum’s Predictions 2022 Festival, Carina Moran, head of strategy at Yahoo UK, considers how marketers can create a more seamless shopping experience in keeping with the changing demands of consumers. As we move from pandemic into longer term endemic, some consumer mindsets may have reset but many new and lasting behaviors have emerged. Marketers need to accept the challenges brought on by the pandemic and understand where to go from here. 

“The biggest challenge induced by the pandemic is that consumers are now mandating convenience from retailers,” says Moran. But marketers shouldn’t fear delivering convenience; they can meet consumer needs with exceptional service by focusing on quick delivery and turnaround times; providing free and easy returns; and simplifying the shopping experience across touchpoints. 

“Consumers are also expecting engaging, entertaining and tangible interactions with brands,” says Moran. “And since the surge in online shopping during the pandemic, if these demands are not met, consumers are not hesitant to shop elsewhere.” 

The type of customer who shops online has changed and now encompasses a much wider range – with baby boomer consumers continuing to purchase three times more online than they were pre-pandemic. The closure of the high street during lockdowns prompted new users to explore online options and this rise in online shoppers will only continue to increase demand and create a new standardized norm for convenient high-quality experiences. 

With so many options, consumers may appear more fickle-minded now than before, meaning marketers need to work harder to earn their attention. 

New challenges to overcome

With this surge in online purchasing, brands and retailers must now consider how consumer behavior around trying on and returning items has been impacted. “We’re buying more online and our bedrooms now also act as our changing rooms,” says Moran. “But we’ve adopted the attitude that if something doesn’t fit or work out, we’ll just send it back.” 

According to Retail’s CBE, the number of returns for online purchases ranges between 15-30%, meaning that a fifth of all purchased online goods are returned. Logistically, this is a nightmare for retailers as it is time-consuming and costly dealing with returned items and having to restock digital shelves. “It also poses a big question around sustainability with this way of shopping and how to sustain this approach,” adds Moran. 

“One of the biggest limitations to online shopping is that you can’t see the product in real life,” says Moran. “74% of people said that was one of the benefits of purchasing items in-store. People do miss the tangible in-store experience particularly after a year of being locked up inside.” 

Embracing hybridity and new technology

“The typical shopping journey now involves both brick-and-mortar stores and digital interactions,” says Moran. “We’re entering a new era of hybridization. Consumers want to be able to browse anywhere, buy anywhere, and have their orders fulfilled anywhere, and retailers need to be able to deliver on all three of these at scale in order to survive in the current climate.” 

Marketers should consider modernizing their physical locations through embedded digital touchpoints to create a space that advertises the brand and allows for easy omni-channel engagement. The aim is to combine how consumers interact online and in-store to help them discover new products, conduct product research and make product purchases – whether it’s in the physical or virtual space. 

“Really good in-store experiences need to become high touch, sensory experiences,” says Moran. 

Shoppers already use their phones when physically shopping, so installing purchase-enabling technology in-store and utilizing existing smart solutions like QR codes will help connect the two experiences. 

With the rise in new tech innovations such as virtual reality (VR), augmented reality (AR), artificial intelligence (AI) and extended reality (XR), retailers can offer more immersive digital experiences for shoppers and get them to try products digitally. 

“Marketers need to make experiences in-store and online feel as personalized or personal as possible, so that the tech feels like a convenient add-on for customers,” says Moran. 

Times might be changing for retailers but there are plenty of opportunities and possibilities for marketers to seize. With the change in cookies and access to more first party data, marketers can be more autonomous with the data that they are extracting online and can use this to both understand consumer online behavior and weave this into in-store activations. 

“We need to make all aspects of the user’s journey shoppable and seamless,” concludes Moran. “Customers are not limited to one screen or one experience. We need to think in the same way they do if we want to scale up and reach them – and use smart data to create a combined and aligned approach.” 

  

This article was written by Olivia Atkins from The Drum and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Loyalty Programs: The New Pillar For Next-Gen Customer Engagement

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Following the global shakeups caused by the Covid-19 pandemic, 2021 found the business world hyper-focused on innovation. According to a report by Celerity, “63% of leaders stated that Covid-19 made their organizations embrace digital transformation sooner than they had expected and were making greater investments in technology as a result.” 

Loyalty programs are among the technologies that have seen an increase in adoption due to this newfound focus on digital transformation. MarketsandMarkets forecasts that the global loyalty management market size will grow from $8.6 billion in 2021 to $18.2 billion in 2026. Considering the emerging value of the loyalty management industry, it’s pivotal to understand the underlying trends so that companies can build a relevant and successful concept for their program. Because just like the business world in general, loyalty programs have also been affected by the pandemic. 

My company, Antavo, recently surveyed over 320 corporate respondents from all regions of the world and analyzed the data from over 25 million member actions tracked via our platform. We published the Global Customer Loyalty Report 2022, which allows us to see through the eyes of loyalty program owners and to identify important trends not just for loyalty programs but also for post-Covid-19 customer retention in general. 

Redefined Engagement, Tiers And Technology

After examining companies’ motivation behind running (or planning) a loyalty program, we found out that “increasing customer engagement’’ ranked first, indicating that companies wish to use loyalty programs as more than an incentive to generate more sales, and they are actively seeking ways to have more touchpoints with customers. Customer sentiment backs up the assumption that it’s worth focusing on engagement: According to Gallup, “Customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue and relationship growth over the average customer.” 

As for the engagement itself, loyalty programs offer a wide range of options: gamification, badges, tiers, birthday surprises, early access privileges — and the list goes on. Tiers, in particular, were proven to be popular. Still, consider doing more than just the default three groups (bronze, silver, gold tiers). For instance, consider adding a VIP tier that requires annual buy-in by spending loyalty points. Also, offering early access to sales events and new product drops is an excellent high-tier reward. 

The Importance Of Performance Tracking

Loyalty programs helped keep customers engaged during Covid-19, but does this actually result in a positive ROI for companies? High-profile examples, such as Amazon Prime or Starbucks Rewards, demonstrate that loyalty programs can be — and are — profitable. However, it’s hard to draw a conclusion for the majority of loyalty programs. In our report, only 32.8% of respondents offering a loyalty program reported that their organization measures the ROI of loyalty. Interestingly enough, 93.1% of those who do measure ROI indicated they had a positive ROI. If anything, this data should provide strong motivation for loyalty program owners to start tracking their program’s performance. 

Of course, this presents its own conundrum: What metrics need to be tracked to consider a loyalty program successful? Recurring revenue and customer lifetime value are seemingly obvious answers, but ROI isn’t the only indicator of good performance. Being able to increase the number of participants and refine the segmentation using loyalty data collected from members is also a sign of success, just like the number of active referrals or the activity rate on social media. In the end, it all comes down to what KPIs each brand wishes to pursue. 

Shifting Toward A More Emotional Loyalty Model

With digital transformation in full swing across the globe, businesses have more channels to reach their customers than ever before. However, the question of how to build loyalty is just as important as where to build loyalty. 

To put it simply, in an age where customers have access to a huge selection of web shops and retailers, a brand has to catch customers by the heart, and not the wallet, because discounts are now less effective than rewards that have an emotional component to them. According to Capgemini, “86% of consumers with high emotional engagement say they always think of the brands they are loyal to when they need something, and 82% always buy the brand when they need something.” 

But what are business leaders thinking about emotional loyalty? In our survey, only 20.7% of existing program owners classified their program as more emotional than rational, while 53.6% of companies in the process of launching or relaunching their program specified that their program would be more emotional than rational, signaling that in the future, much more loyalty programs will focus on generating emotional loyalty. 

It’s worth highlighting that emotional loyalty isn’t a zero-sum game. You can still have transactional elements, like coupons and collection in your loyalty program — just remember to add a couple of features and rewards that emphasize emotional attachment. For example, provide invitations to member-only events celebrating the anniversary of your brand, privileges that make the shopping journey smoother, such as private concierge and dedicated customer support, or input opportunities for product and service development.

In Conclusion

To sum it all up, the world of loyalty programs is changing behind the scenes at worldwide organizations that prioritize customer loyalty. So businesses that wish to capture the attention of customers should adapt their strategies to focus on engagement, tiered program structures and emotional loyalty. 

This article was written by Zsuzsa Kecsmar from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

3 Ways Retailers Can Leverage Analytics to Optimize In-store CX

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The brick-and-mortar retail industry is finally embracing its digital transformation moment. After years of lagging technological adoption, retailers are exploring their options when it comes to improving the retail experience on all levels. 

This seismic evolution hasn’t gone unnoticed by some of the world’s leading digital giants. Recently, Mastercard and Verizon Business announced a joint venture to revolutionize shopper payments, contactless exchanges, and consumer personalization by leveraging 5G-powered technologies. The partnership promises to bring innovative thinking to retailers and enable them to scale up their services and solutions. 

But 5G tech is just the tip of the retail digital transformation iceberg. Yet another powerful component already being considered by brands is retail analytics. In fact, the analytics landscape is booming — and in North America, it’s expected to exceed $8 billion in revenue by 2027, according to Global Market Insights. Regardless, nearly three-quarters of companies surveyed by Deloitte admit they don’t use “a single, common set of tools and methods across the enterprise for accessing and analyzing data.” This hampers their ability to form data-driven insights, even if they’re adept at collecting it. 

What’s the cause of this glaring gap? There are many. First, plenty of brands don’t feel like they have the resources to make sense of the analytics they accumulate. Second, some leaders haven’t learned that mined data can unlock brilliant ideas that can help with everything from operational efficiencies to consumer habits. 

A final reason for not using predictive analytics in retail falls on a lack of internal cheerleaders and supporters. Without upper management and store-level digital champions, team leaders don’t understand how to integrate data insights to boost the in-store experience — and they often fall back on old models. After all, if the people above them aren’t invested in analytics, why should they be? 

The good news? Each of these obstacles to improving the retail customer experience by leveraging retail data analytics is far from insurmountable. And if you’re in the retail field and are eager to use the data you already assemble, you have choices. Below are some strategies that will help you offer a fresh and modern in-store experience with help from data:

1. Evaluate data to shed light on consumer buying habits

Customers often behave in predictable ways. For instance, they might gravitate toward certain shelves regardless of what’s on them. Or they might make purchases cyclically — but not necessarily on a cycle that would be obvious to you. 

Data analytics helps you understand what’s happening beyond simply the buy-sell process. The more you understand about your customers (think basket sizes to ordering trends), the better your ability to forecast revenue. And you can often collect the data you need through point of service software that’s already integrated into your checkout process.

2. Use retail data analytics to map out your staff scheduling

It’s a tough job market for retailers. Many promising candidates are opting out of part-time and full-time work as a part of the post-pandemic “Great Resignation,” as well as other factors. Consequently, your ability to staff your store precisely is more critical than ever. 

Data can help you understand your customer traffic flows to avoid both overstaffing and jams. As an example, you might realize your meat counter is busiest between 4 p.m. and 6 p.m. on Mondays and Thursdays. This small bit of information can allow you to pinpoint where to put your people and the hours they should be working. Additionally, counters and beacons can feed you real-time information on customer dwell times and foot traffic counts to ensure your team members are always where they’re most needed. 

3. Let data inform your personalized shopping campaigns

Buyers love to feel like they’re getting a one-of-a-kind retail experience. You can make them feel unique by using analytics to construct recommended journeys that feel intuitive and individualized. At Sephora, for instance, personalization has become a brand mainstay. Through the beauty store’s app, customers can book appointments, virtually experiment with products, and receive customized recommendations. 

Here’s the bottom line: Don’t underestimate the powerful advantages of hyperpersonalization. There’s a reason the process has been associated with increased sales across the retail sector. Plus, personalizing customers’ experiences might decrease sales and marketing outlays by up to 20%, increase conversations by up to 15%, and improve worker engagement by nearly one-third, according to McKinsey. 

Digital transformation is blossoming in the retail sphere. Retail analytics can help companies effectively expand their customer relationships and revitalize a sense of consumer trust. All it takes is a willingness for retailers to learn how to better use the data that’s already at their fingertips. 

Scott T. Reese is CTO at Harbor Retail 

This article was from Retail Customer Experience. News Features and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

3 Early Warning Signs Your Marketing Plan Needs a Tune-up

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Marketing plans don’t last forever, particularly in these fast-changing times. Beware the signs that your plan needs to spend some time in the shop. 

Businesses invest a significant amount of time and money in creating comprehensive marketing plans. They set ambitious goals, lay out strategies, and execute a plan to achieve them. In fact, they may be so focused on the end game that they fail to pay attention to what’s going on around them–that is, until they feel their plan crumbling and wonder why. 

Many companies figured out how to pivot their businesses to survive a global pandemic. Others, despite experiencing the accompanying tectonic movement in marketing, believe they can just wait it out and then resume with their pre-pandemic tactics. Those shifts, however, have reshaped how brands market to their customers and clients forever. 

If you think your business is doing OK with its current marketing plan, you may be missing some critical early warning signs that it needs a tune-up. Take off the blinders and watch for these three important clues.

1. Your Customer Retention Rates Are Falling

It’s easy to blame the ever-mutating pandemic and its aftermath for falling customer retention rates. The fact is that customer priorities have been irrevocably altered by these events, and your marketing plan needs to reflect them. 

When you can no longer keep customers coming back like you used to, don’t blame them. No matter how successful your marketing plan used to be in achieving retention, it’s no longer doing the job. Recognize that you aren’t doing something they need in order to stay loyal to your brand. 

The past couple of years has had major marketing trends related to artificial intelligence (AI), chatbots, and automation. However, with these trends and the pandemic, there will be a need to add more personalization and human connection so customers feel in touch with your brand. In 2022, think about the ways you can help your customers feel a human element to the service so they don’t want to leave. 

2. You Aren’t Attracting New Customers Like You Used to

It may take fewer resources to retain an existing customer than to attract a new one, but if your lead generation is deteriorating, sit up and take notice. Examine all the strategies your current marketing plan uses to find new customers. Then analyze why they’re no longer working. 

Two key factors may be in play. First, your prospective customer’s wants and needs have likely changed, and they’re no longer finding your content because it’s no longer relevant to them. Second, your brand’s life cycle has reached a new stage, which means you’ll require new growth strategies that combine credibility, visibility, and authority. 

You’ll have to explore new markets, target audiences, and product offerings. Those opportunities may require adjustments to your core business as well as your marketing plan. But it’s a one-two punch that may give you the burst you need to grow. 

3. You’ve Lost Your Online Credibility

There’s a variety of techniques and tips to boost your online credibility. Not only do you need to offer information, products and services that target groups find personally relevant, they need to trust your brand to deliver what you promise. Without that combination, your brand is in trouble. 

Your marketing plan must acknowledge and adjust to market realities. How will you know whether it’s a hit or miss? Start by checking your search rankings. 

If you aren’t findable, it’s likely because your content simply isn’t relevant to customers and prospects. If you’re talking to audience members with scripted messaging, you need to be talking with them about their problems and solutions in ways that encourage unscripted dialogue. 

You’ll need to revise your content marketing strategies to rebuild credibility and get those clicks, shares and likes moving again. Discover how to engage with audiences reshaped by their own new realities. That’s the secret to making your brand relevant and credible with them again. 

Marketing Plans Must Be Nimble and Quick

The days of multi-year marketing plans are long gone. Audience priorities, desires, problems, and solutions are mutable at best and capricious at worst. Foundational tactics for differentiating your brand from your competitors are more enduring, but only a nimble marketing plan that responds to changing dynamics quickly will succeed. 

Admitting your marketing plan has a problem is the first step. Adjust accordingly and monitor hits and misses. And always watch for the early warning signs that could mean it’s ready for a tune-up. 

This article was written by John Hall from Inc. and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

71 Percent of Americans are Driving Less Due to Rising Fuel Prices

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Shopkick is Giving Away $10,000 in Kicks to Ease the Pain at the Pump 

The average price of a gallon of fuel has increased by approximately 47 percent ($1.36) since last year, and consumers are feeling the impact. According to recent data by Shopkick, a leading shopping rewards app, nearly all (99 percent) consumers have noticed an increase in gas prices, and 86 percent have been affected by the recent surge. Of those impacted, 71 percent are driving less, 59 percent have tightened their budget, 28 percent are purchasing less fuel, and 7 percent are entirely unable to buy fuel.

To fully understand how rising gas prices are affecting Americans and discover ways to help, Shopkick surveyed more than 36,000 consumers between March 17-20, 2022.

Key Findings Include:

  • Consumers are Getting Less Fuel: Before the spike in gas prices, 87 percent of consumers would fill their tank all the way up, and now, only 59 percent fill it completely. Thirty-one percent of drivers are now choosing to only fill their tank halfway when getting fuel, compared to 10 percent previously.
  • Cost Concerns: An overwhelming 95 percent of consumers are worried about rising gas prices, and 62 percent saying they are extremely worried. When asked how much additional money in their wallets would help consumers feel more secure while fueling up, 24 percent say between $21-$40, 23 percent say $41-$60, 12 percent say $60-$80, and 13 percent say $81-$100.
  • Cutting Back on Non-Essentials: In the last month, the majority (72 percent) of consumers have altered their spending habits for non-essential purchases, with 64 percent cutting back and 31 percent skipping non-essential purchases altogether.
  • Less Frequent Trips: Gas prices may be rising, but 56 percent say they are not shopping online more frequently now than they were before. However, 74 percent of consumers have cut down their frequency of trips to the store.

To help out the Americans impacted by high gas prices, Shopkick is launching a nationwide fuel sweepstakes – giving 100 users $100 (25,000 kicks each) to use at the pump. Between March 24-28, 2022, every Shopkick user who earns just one kick by Monday, March 28th will automatically be eligible and entered to win. Trying to avoid driving and save money? Shopkick makes it easy to earn kicks, even from the comfort of your home.

How to earn a kick: 

  • Watch videos at home
  • Shop online through the app 
  • Walk into a store
  • Scan items in-store
  • Shop with a linked card
  • Submit a receipt

“Inflation and rising gas prices are causing financial concern across the country, especially as 46 percent of consumers are required to drive to work every day,” said Brittany Billings, EVP, strategic markets & marketing at Shopkick. “Our user community is at the center of all we do at Shopkick, and we recognize the economic challenges many are facing. We decided to create this giveaway to support them through this hard time and help fill up their tanks stress-free.”

To participate in the Shopkick Fuel Sweepstakes, consumers can download the free Shopkick app on iPhone or Android devices. 

Shopkick Fuel Sweepstakes entry ends on 3/28/22 at 11:59 pm PST. One hundred winners will be selected and awarded 25,000 kicks each. Winners will be contacted and announced following the contest end date. Find the full contest rules: here

Cultivating Loyalty Is More Challenging Than Ever: Here’s What Customers Want And Brands Should Know, According To The Latest Data

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Coke or Pepsi? Visa or Mastercard? Uber or Lyft? Apple or Android? Think about the brands you are loyal to. Does that allegiance extend to the exclusion of ever buying or using rival brands? Why or why not? What is it about commodity or luxury products and services that keep you faithful – and what would tempt you to switch?

Companies are working hard to understand this and it’s not easy. Both Gen-Z and Boomers have significant purchasing power (in 2020, consumers 65+ upped their online shopping by 53%), yet these generations sit on opposite sides of the preference and behavior spectrum (and individuals in those cohorts vary just as wildly). Legacy brands have armies of nimble D2C challengers nipping at their heels. The rapid shift to a new and permanent 1:1 economy is dizzying.

How do brands drive and maintain customer loyalty in the midst of ever-changing, oftentimes unpredictable market forces and shifting consumer demographics? To better understand what’s driving loyalty today and learn more about the ways in which consumers and brands are reacting to change, I spoke with John Hendricks, founder and CEO of ERGO.

John thinks a lot about the loyalty topic as some of the world’s largest brands such as American Express, Delta, Blackrock and Ameriprise have used his company to build long-term relationships and loyalty with consumers through the power of modern email newsletters. Together, we examined some of the latest data from Prosper Insights & Analytics.

Gary Drenik: Traditionally, we think about value (price relative to quality) as the main driver of loyalty. But are dollars and cents the only way for brands to compete and build customer loyalty?

John Hendricks: Brand loyalty is completely psychological, equal parts rational and emotional. On the rational side, there’s no getting past the fact that American consumers are definitely feeling the pressure of inflation. According to data from Prosper Insights and Analytics, a large percentage of consumers have noticed price increases across multiple categories from gas and groceries to pet supplies and prescription drugs.

Add to inflation the recent holiday gift-giving season, and it’s no surprise that consumers may currently be choosing cost savings over brand loyalty. Nearly one third (27%) of consumers across generations, Gen-Z, Millennials and Gen-X said they were buying more store brand/generic items due to price increases. 25% of Adults said they were doing more comparative shopping online.

Prosper – Doing As A Result Of Price Increases
Prosper Insights & Analytics

More than half of consumers across every generation except Millennials (48%) said that choosing familiar brands when buying clothes was not important.

Prosper – Familiar Labels Are Important
Prosper Insights & Analytics

On the emotional side it’s now more important than ever to make a strong impact with a solid customer experience. Household name brands (those that normally engender loyalty) will need to deliver more than discounts, rewards, and coupons. Brands can offer experiential rewards such as exclusive or early access to events or products that go beyond transactions and help drive deeper relationships and a sense of community with other customers.

Prices go up and down in tandem with economic cycles, but brands that find creative ways to offer incentives beyond fleeting discounts or irrelevant rewards will find it easier to maintain customer loyalty during tougher times or earn regular business back when wallets loosen up again.

Drenik: So, it sounds like beyond price, customer experience is a critical factor to winning and maintaining customer loyalty?

Hendricks: Absolutely. All consumers – even those in older generations – expect digital- first experiences in what’s become a highly on-demand culture. Brands that deliver speed and seamless omnichannel experiences consistently will have a long-term advantage when it comes to customer loyalty. Brands that get personalization right will also have a leg up.

However, good CX today goes beyond just selling and focusing only on triggered marketing messages. Consumers crave tangible value beyond the sale and it’s important for brands to predict customer needs and delight them with information they didn’t already know.

Transactional messages drive sales, which are no doubt important. Brands are in business to make money. However, experiences focused on relationship building and rooted in brand values will increase total CLTV (customer lifetime value), which is important for brands especially in high churn industries like technology, CPG, and financial services.

Drenik: Let’s shift gears and address the point of brand values. Many brands have stepped up in recent years to demonstrate that they share the same social values as their customers. Should we expect this trend to continue in 2022?

Hendricks: Corporate social responsibility matters. This has come into stark relief over the past two years with various social movements that have sparked conversations around sustainability, equity, and inclusion. Prosper Insights & Analytics found that a quarter of Gen-Z and Millennials will increase spending with a brand that takes a strong stand on a social issue they support.

The numbers are even more significant when it comes to environmental issues, with nearly 30% of Adults 18+ reporting that they’ll spend more with brands that are environmentally responsible.

These current numbers aren’t as high as other industry studies and again may reflect the tight financial times many consumers are in. However, these stats underscore that even during tough times, brands that maintain, demonstrate, and communicate their values can still garner a larger share of wallet and long-term loyalty. Authenticity is also key. Consumers are very good at sniffing out fake attempts to embrace Corporate Social Responsibility (CSR) by brands and that almost always backfires.

Drenik: Any final thoughts or tips about cultivating loyalty in 2022 and beyond?

Hendricks: I can’t help but come back to the importance of getting personalization right as a driver of loyalty moving forward. Us folks in the marketing technology world know how much of a buzzword it’s become, but there’s such a strong opportunity to rethink what personalization means and how to approach it in a way that provides the best customer experiences while respecting privacy. Much of this will be driven by Artificial Intelligence and we are just at the tip of the iceberg in terms of what these loyalty-driving experiences can and will look like.

Drenik: Thanks for your time and expertise, John. It will be interesting to see how things continue to unfold in the coming year.

This article was written by Gary Drenik from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Americans’ Shopping Habits Have Changed Due to Rising Prices and Stock Shortages

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82 percent of consumers have noticed price increases on everyday essentials; 81 percent say it has affected the way they shop.

Over the past year, consumers have been faced with significant supply chain issues and massive inflation, directly impacting the way they shop. In fact, 81 percent of consumers are now more likely to wait on making a purchase until there is a sale or coupon due to price increases and 79 percent would purchase the next best option if their favorite brands are sold out or low-in-stock, highlighting their wavering loyalty to brands.

Shopkick, a leading shopping rewards app, surveyed more than 20,000 consumers across the country from February 17-24, 2022 to uncover how consumer behaviors have evolved since 2021.

Key Insights Include:

  • In-Store Shopping Behavior Shift: The majority of consumers (88 percent) are still shopping for their household essentials in-store, however more than half (62 percent) say their in-store shopping habits have changed over the past year. When consumers were asked how in-store habits have shifted, 69 percent say the time of day and frequency during the week, 56 percent say their safety practices, and 44 percent say the retailers they shop at and brands they buy from.
  • Consumer Changes: For those in-store shoppers whose time of day and frequency has changed, 52 percent say they now go to the store at less busy times, 23 percent say they go to the store fewer times a week and 17 percent say they are going to the store at less busy times AND fewer times a week. The majority of consumers who say they have changed where they shop (59 percent) are now shopping at big box retailers like Target and Walmart more frequently, as well as doing more research online before making purchases in-store (43 percent) and shopping more at local, independently-owned retailers (27 percent).
  • Out of Stock Items: Out-of-stock issues are nothing new for shoppers but 80 percent have noticed that more shelves are out-of-stock or low-in-stock at their usual retailers and grocery stores than they were 12 months ago. Items they have noticed that are unavailable include meat products (53 percent), dairy products (52 percent), boxed goods (50 percent), canned goods (48 percent), toiletries (50 percent), fresh produce (30 percent), bottled water (29 percent) animal supplies (28 percent), and medicine (23 percent).
  • Limited Loyalty: Brand loyalty is wavering as the majority of consumers (65 percent) say they would buy the next best option if their go-to brands are sold out or low-in-stock, and 59 percent say they are very willing to try a new brand and do so regularly. When it comes to what influences consumers’ loyalty to brands, the majority (75 percent) say the taste, flavor or quality of the product is most important.
  • In-Store Experiences: When asked what in-store experiences are most important to consumers, the majority (62 percent) say the ability to try on, touch and see products in-person. Other important experiences include better deals and lower prices (62 percent), the ability to confirm the quality of the product (61 percent), convenience (49 percent), in-person interactions or support from store associates (23 percent), and product sampling (14 percent).
  • Online Shopping Behavior Shift: It is not just in-store shopping that has shifted, 51 percent of consumers say their online shopping habits have changed too. Of those, 76 percent say they are making more online purchases, 26 percent have signed up for more online memberships to take advantage of shopping rewards and promotions and 20 percent have tried new brands due to their go-to brands rising in price or being out of stock.
  • Purchasing Perks: There are many perks of online shopping but 85 percent of consumers say the most important is free shipping and returns. Other important advantages include fast shipping (56 percent), avoiding crowds and contact with others (43 percent), high quality products or brands (38 percent), buy online pick up in-store options (34 percent), flexible return policy (21 percent), and buy now, pay later options (14 percent).

“This survey data has revealed that consumer habits and priorities have transformed over the past year as a result of ongoing supply chain issues and inflation,” said Brittany Billings, EVP of strategic markets and marketing at Shopkick. “In order for brands and retailers to retain customers’ share of wallet, heart and mind, it is more important than ever to deliver a frictionless – and connected – online and in-store experience to ensure a positive interaction each and every time.”

What Do Consumers Want In 2022? Retail Analysts Reveal Shifting Behaviour

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What do consumers want in 2022? New research examines how customers behaviour has shifted during the pandemic, and what this means for how retailers should interact with them.

The past 18 months has reshaped the retail landscape and sent retail analysts into overdrive trying to understand how consumers behaviour has adapted and shifted during the pandemic.

What was once accepted truths about shopper’s habits have been disrupted, and understanding what this means for big or small retailers is paramount in 2022.

Capgemini’s new report ‘What Matters to Today’s Consumer’ helps unpick changes in consumer behaviour, and understand what might be temporary or more permanent shifts. It highlights how the ‘conscious consumer’ is becoming commonplace and emphasises the impact of ongoing supply chain issues and cost of living increases.

Supply chain issues set to continue

In late 2021, business leaders from a range of sectors told the House of Commons business, energy and industrial strategy committee that small businesses would bear the brunt of labour shortages and price rises until 2023.

Tim Bridges, global sector lead for consumer products, retail and distribution at Capgemini speaking via email, underlines what is at stake. “Retailers mustn’t take their eyes off supply chain challenges this year. They can spend huge amounts of money marketing but if the product availability is constrained it’s all for nothing”.

He adds that “fifty-four per cent of consumers prefer local or regional products" and highlights that a move to a more localised supply chain "not only drives brand purpose but also creates agility and flexibility to be able to deliver in supply-constrained scenarios.”

Cost of living sky rockets

Consumer spending has been a major driver of the economic recovery, but with consumer confidence dropping to its lowest level in 11 months as people worry about surging inflation and fuel bills, there are suggestions that rising living costs will slow the household spending recovery.

Bridges explores how retailers are tackling this issue. “We are starting to see two different approaches to tackling price rises. One is a move to subscription models. Here, price increases are spread out over time. The other is to let consumers decide – do they want what they’re after, or an economy option? Often, consumers still opt to pay a premium – as long as they are offered a choice.”

The holy grail – brand loyalty

Brand loyalty, the ability of retailers and brands to retain customers, is highlighted as a key to success in Capgemini’s study. Accenture also examined brand loyalty in a recent report on the impact of the pandemic, looking at how we want to consume has been shaped by the seismic shifts in how we live.

Accenture’s work notes that the pandemic encouraged consumers to look inward, “elevating concepts of relationships and responsibility and re-evaluating their priorities.

It highlighted how these "new mindsets are shaping where, what and how consumers buy, which companies must be acutely aware of as they aim to build loyalty with the consumer in 2022. Through their purchase choices, they are purposefully seeking to influence their communities and the environment, and to confirm how they see themselves in the world."

Bridges agrees, noting that as well as being aware of what is driving today's consumers, retailers must stay tuned in to what customers are saying and thinking. Consumer product companies have many more avenues today to promote brand awareness and loyalty that’s additive to the retailers selling their products. The most active channel is social media, both for promotion and for understanding consumers’ reaction in
real-time – and, therefore, being able to make adjustments just as quickly”.

Consumers know what they want

Today’s consumer expects many things for the businesses they buy from. The ethos and ethical standing of not only the product but the company is extremely important to them. In addition to aligned values, they also want convenience. Whether that’s a multi-channel experience with fast, easy delivery and fulfillment alongside straightforward, multi-payment options, the bar has been set high.

The key to success in 2022 will be recognising that these demands exist, and plotting a course to not only meet expectations, but exceed them in ways that build trust and loyalty.

This article was written by Catherine Erdly from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Ignore the doomsayers – brand purpose still beats out bombardment

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On any given day, up to 10,000 discrete advertisements bombard consumers during their waking hours. Consumers – especially the youngest generations – are expecting more from these messages than just details about the latest seasonal sale. But this begs the question: is it possible for brands to prioritize purpose-driven initiatives without sacrificing business performance?

These initiatives serve as an effective way to win customers – and as a gateway to growth. According to research conducted among C-Suite executives and consumers as part of Deloitte’s annual Global Marketing Trends Report, consumers are becoming more discerning about whether a brand supports diversity, equity and inclusion both publicly and internally. Because marketing and advertising often serve as the face of what a brand stands for, marketers have an opportunity to elevate equity inside and outside of their organizations.

Making DEI commitments in all spheres of influence is key to effective branding

In our survey of 11,500 global consumers, we found that the youngest respondents (from 18 to 25 years old) took greater notice of inclusive advertising, while non-white respondents were up to two-and-a-half times more likely to be aware of a brand prominently promoting diversity when making a purchasing decision. But it’s not enough to just market inclusiveness or diversity – our results also show 57% of consumers are more loyal to brands that commit to addressing social inequities in their actions. Appealing to the loyalties of future customers can require brands to demonstrate they are promoting equitable outcomes in all their spheres of influence: in the workforce via hiring and retention, in the marketplace using diverse suppliers, or in society through meaningful community partnerships.

The impacts of measurable DEI commitments are highlighted by high-growth brands (defined as those with annual revenue growth of 10% or more), which are more frequently establishing key performance metrics for DEI objectives than their lower-growth competitors. Notably, in our survey of over 1,000 global executives, we found that the highest-growing brands are committed to achieving equitable outcomes across all their areas of influence – workforce, marketplace and society –in ways their lower-growth peers are not.

Additionally, 27% of high-growth organizations have established equity metrics for community investments (versus 18% for negative-growth organizations) and 38% of high- growth organizations have established similar metrics for their brand messaging campaigns (versus 30% for negative-growth organizations).

These demonstrable commitments to DEI can help bolster brand visibility, prominence, and trustworthiness among its consumers – particularly its youngest demographic. An overwhelming 94% of Gen Z consumers expect companies to take a stand on important social issues. Without legitimate commitments to DEI in all spheres of influence, attempts at inclusive marketing or promotion of diversity can fall flat and appear disingenuous to consumers who are expecting more from the brands they purchase from.

Elevating equity inside and out

How can marketers avoid the pitfalls of hollow messaging and win the hearts of consumers? We’ve highlighted three actions across an organization’s ecosystem.

Firstly, ensure teams and suppliers reflect your market. Marketing teams – both internal and external – that closely reflect the markets they serve can reduce the cultural and demographic distance between the brand and the consumers they aspire to reach.

Secondly, bring a diversity of voices to the organization. Chief marketing officers should use that position of influence to continuously monitor and bring the needs of underrepresented communities to their organization – and feature those voices and faces in campaigns.

Finally, make your commitments measurable. Ultimately, no amount of messaging can help a brand overcome the hurdle of being labeled disingenuous. One way to solve for this is to make sure your DEI goals are not just checking a box but creating real, measurable outcomes.

In the end, future generations and increasingly diverse communities are expecting more from the brands that they support. Simultaneously, the highest-growing brands are reducing the cultural and demographic distance between the makeup of their teams and the markets they aspire to reach. Marketers can help their organizations not only hone their messaging but also support their company’s transformation to a more equitable, diverse and inclusive organization, thereby underpinning their brand messaging with authenticity.

Christina Brodzik is a principal at Deloitte Consulting.

This article was written by Christina Brodzik from The Drum and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Three Ways The Future Retail Store Will Change

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The fundamental role and purpose of retail stores are changing. Digital transformation forced brick-and-mortar outlets to evolve as more of the path to purchase shifted online. Now, as e-commerce expands, retailers are
reimagining the functionality of stores and tapping into digital tools to keep those stores relevant.

Physical retail will remain the largest and most important channel for the foreseeable future, but how space is leveraged will transform. In Euromonitor’s recent Commerce 2040 virtual event, Jason Goldberg, chief commerce strategy officer at Publicis, noted that stores are no longer a singular touchpoint in the shopping journey; now, stores play several roles, becoming platforms that serve multiple missions and stakeholders.

Recently, retailers have reduced footprint entirely or used physical outlets to support online fulfillment operations or branded experiences. Personalized, immersive and collaborative concepts will advance the store experience of
tomorrow.

Check in before check out

A hallmark of the future store will be identifying the customer at check in rather than check out. Historically, stores have not been equipped to detect the identity of a shopper until payment, limiting the ability to personalize in- store shopping trips.

In the future, facial scanning will recognize customers upon entry, enabling retailers to tailor the in-store experience based on personal information and purchase history. As of 2021, one-third of global digital consumers are open to companies using facial recognition software to personalize in-person interactions, according to Euromonitor International’s Voice of the
Consumer Digital Survey:

This sentiment is strongest among younger cohorts—40% of millennials are comfortable using this technology to power more personalized interactions. Leveraging facial recognition across the store will allow associates to assist consumers with product choices in the context of what they own , for example.

Experiential ticket entry

Retailers will leverage technology to remove the hassles of shopping for mundane items while tapping into the innate desire and curiosity to test and try before buying. For products that require more consideration, such as furniture or electronics, physical retail will shift from stores where products are sold to a stage for immersive brand experiences.

In recent years, consumers adopted a minimalist mindset, prioritizing experiences over continued accumulation of products. In fact, 46% of global consumers would rather spend money on experiences rather than things, and this percentage increased 10 points in the last five years, according to Euromonitor. Creating unique engagements have the potential to generate new revenue streams. For example, consumers could go to a sports-themed experiential center and compete against top athletes in an alternate reality experience. Retailers looking to capitalize on this concept will need to create a playground-like atmosphere that ensures the experience matches the price tag.

Community collaborations

Brick-and-mortar outlets can become places where store associates and shoppers come together to design and co-create products. This in-store experience will emphasize onsite product customization for the end- consumer. Shoppers may be able to pick specific colors or textures for shoes, clothes or accessories to create the ultimate one-of-a-kind product.

Retailers that focus on community collaborations could also drive sustainability and target values-based buyers. Globally, 32% of consumers will buy from brands that support social and political issues that align with their values and 27% will go so far as to boycott brands that do not, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2021. This store concept presents the opportunity to bring consumers employees and local experts together to collaborate on circular projects that repair or upcycle previously purchased items.

“The store will become more of a hub of a community in the future,” Emily Xu, chief marketing officer of Mitchell Gold + Bob Williams, said during Euromonitor’s event. Xu noted that this type of in-person experience could be used to teach consumers about concepts like sustainability.

The retail store of tomorrow

Stakeholders operating across retail need to rethink long-term strategies. While the first wave of digital disruption was about how stores could compete with e-commerce, this next wave will be about integrating and uncovering synergies. Data will be key to providing the necessary business agility to do so.

“If you cannot move quickly on the real-time prescriptive recommendations that are coming to the store or restaurant, it is all for naught,” Barry Thomas, head of international customer marketing and future of commerce at The Coca-Cola Company, emphasized during the aforementioned event.

In the future, retail outlets will be multidimensional, with stores simultaneously operating as transactional, fulfillment, engagement and branding spaces.

This article was written by Michelle Evans from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.