Top 5 Challenges in the New Retail World

Online sales may be skyrocketing (Forrester Research expects sales to hit $414 billion by 2018), but the next generation of retail isn’t just about ecommerce.

For instance, you may have noticed the explosion of subscription services since BirchBox spawned this category in 2010. There’s now BarkBox, Nature Box, GlamBox, and a variety of other “boxes” that offer curated experiences. Subscription-based commerce has revolutionized consumers’ shopping expectations while presenting organizations with several unique challenges.

As forward-thinking digital brands blaze trails in the realm of commerce and take new approaches to retaining customers for life, it’s time for marketing to catch up. Whether they’re selling a subscription box, in-person service, or customized shirt to be 3D printed at home, every innovative company needs the technology and marketing chops to own these experiences from beginning to end.

Here are the top five challenges for companies facing the new world of retail, and my advice for how to overcome them:

Choosing the right platform

First and foremost is the technical challenge. Until recently, it’s been very complicated and expensive to set up a subscription commerce business; the majority of commerce platforms on the market weren’t designed to accommodate more than simple transactions. Regardless of your business model, make sure you’re using technology that supports your business today as well as the business you want to be — one, five or 10 years down the road. 

Also carefully consider the billing implications of a subscription commerce play – and ensure that your technology platform supports this, a suitable 3rd party solution is available, or the scope of any custom development has been carefully considered.

Delivering an exceptional end-to-end experience

In the customer-first era, brands must deliver exceptional experiences from beginning to end, or risk losing their business to a savvier competitor. This is especially salient for subscription businesses — these brands must continue delivering increased value to the subscriber in order to encourage him or her to continue renewing. Some companies are offering timely promotions as subscriptions and products reach the end of their intended lifecycles, in the hopes of enticing customers to purchase again.

Personalizing the experience

Consumers want to be recognized as unique individuals whether they’re buying online, browsing in a store or getting a box delivered to their home. Many new services offer curated items based on personas and ratings. Take StitchFix or Trunk Club, which combine style surveys with a real-life stylists (Nordstrom purchased Trunk Club for a cool $350 million last year). These services are a step toward the future of e-commerce — combining physical experiences with the convenience and personalization of online shopping.

Using data effectively

Delivering truly personalized experiences at scale requires collecting information throughout the customer journey — including insights about the customer’s current context, attributes and past behavior. Increasingly powerful analytics tools help marketers predict the most compelling customer experience, and automation technologies allow marketers to deliver personalization at scale. To provide real value, companies need to obtain a cohesive view of the individual with whom they are interacting and understand behavior across different touch points.

Bridging the digital-physical divide

Consumers now expect experiences that seamlessly blend the digital and physical, which requires that brands adopt a different paradigm for brick-and-mortar versus online. Sephora, for example, recently merged its traditional and digital marketing teams and Amazon announced plans to open its first retail store. Target has opted to offer convenience in the form of free shipping, easy returns, and in-store pickup, partnering with new app Curbside to make it even easier for consumers to find, buy and pick up their stuff. Marketers can also experiment with new ways of blending subscription services and physical experiences —  like Microsoft is bundling Office 365 with a new purchase of a Surface Pro 3.

Ryan Donovan is vice president of commerce with Sitecore.