Retail-iation: How retailers should bounce back
By Sarah Hunt
5 minute read
It’s a tough time to be a retailer. Last Christmas (2018) was one the worst Christmases on record (for retail sales – nothing Grinch related), and we’re in an uncertain economic situation. Only a surge in discounting campaigns ensured the month’s overall sales were not worse than the previous year.
Despite a recent recovery and an increasing spend on pricey experiences and products like holidays and furniture, people are spending less on smaller purchases like food and clothing, and are expecting discounts as standard.
So with this in mind, what can retailers do to stay smart and beat the competition? We have three ideas:
In the past few years, we have definitely witnessed the rise of the influencer, and customers are continuing to use social networks to discover new products. In fact 43% of social media users have purchased a product after sharing or favouriting it. Social is beginning to play a more direct role in commerce. For example Facebook, Twitter and Pinterest have all released buy buttons. However these are not the only options within social – you can tweet to buy with AMEX, and Soldsie enables you to buy objects in social posts simply through commenting. Lastly retailers are investigating the opportunities for dark social. Fortunately, this isn’t about devil worshiping parties; it’s about the untraceable sharing that occurs in private apps like WhatsApp and Snapchat.
Although I’m not keen on the buzzword (Omni means ‘all’ so if you’re not using hot air balloons, it’s not Omnichannel…), Omnichannel is not showing any signs of slowing down. 8 out of 10 consumers now use a smartphone, tablet, computer or in-store technology whilst shopping, and retailers are racing to keep up with these expectations. For example, online pure-plays like Amazon and Birchbox are opening up physical stores to maximise their USPs and touchpoints on the high street. Amazon’s bricks and mortar stores make it easier to browse through placing their signature reviews front and centre, and they also use it as a showroom for their electronic products like the Amazon Echo and Fire TV. On the other hand, traditionally bricks and mortar retailers like Burberry and Rebecca Minkoff are drawing in shoppers by providing new experiences such as smart mirrors that allow shoppers to pull up product screens that show styling options as well as the other colour choices.
#3 Internet of Things
I’ve saved the best ’til last. Retailers are recognising the importance of mobile and expanding on the technology to leverage the IoT in their physical shops. There are two key routes within this. The first is through creating a better experience for customers through the use of beacons. This could include automatic checkouts as customers walk out of the shop, delivering real-time tailored promotions and creating improved layouts through analysing customer behaviour. An interesting example in this area is Target Run. This is an app that provides hyper-local personalised offers and in-store info, e.g. what is trending, when does the customer will benefit the most. The second angle is around streamlining processes. These options include inventory optimisation through shelves automatically monitoring inventory and replenishment. It’s a long way off, but McKinsey predict that IoT in retail could have an economic impact of $410 billion to $1.2 trillion per year in 2025.
The recurrent theme goes back to ‘right place, right time’ and being where the customer is, wherever they’re browsing. Retailers have recognised the key customer needs of mobile, social and seamlessness, and they know that investing in technology is a brilliant way to deliver the experience that the customer wants. But it’s a challenge to become truly channel-agnostic, and it means treating your social channels and digital experience a lot more than hygiene projects.