Like on-demand movies and music, consumers today expect retail on-demand. They are willing to pay more for a fast and efficient shopping experience. This trend is driving retailers to use a variety of innovative offerings, from digital dressing rooms to innovative mPOS technology, to enhance the customer journey.
A recent survey report for the Economist Intelligence Unit (EIU) on digitizing retail stated that the customer journey is the key to differentiation and as a result, the primary objective of 42% of Retail Executives is to “improve the customer experience.”
One opportunity for differentiation is impulse buying among digital shoppers. Purchasing items on a whim, whether on-line or in-store, challenges retailers to focus on mobile as well as in-store experiences. This 360-degree customer engagement has the power to separate successful retailers from the rest of the pack. So how can business models be reimagined to focus on these on-demand priorities?
Deliver on Impulse
We can all recall a moment where necessity succumbs to the thrill of a new purchase – whether buying new clothes or splurging on the next, innovative device. While impulse buys are a common part of the shopping experience, delivering on impulse buys can be a retailer’s biggest challenge.
Flash Sales: Creating a niche in this market, several start-ups such as Zulily focus on flash sales as their primary retail model. By using technology, they tap into the thrill of shopping and provide a memorable experience regardless of the shopper’s location. This retailer’s “treasure hunt” online environment is cashing in on demands from impulse shoppers by providing instant gratification in new and transformative ways.
“Buy Now” Social Media Placement: Retailers that primarily run a brick-and-mortar operation can utilize these digital strategies. For example, retailers can drive more conversions online through “buy now” options on their website and in social applications. This turns casual browsing into one-click purchases for shoppers unknowingly seeking new products.
Pop-up Stores: By creating a limited time offer, pop-up stores expand traditional in-store experiences. They provide customers with easy-to-access products and drive impulse shopping at the same time.
Virtual Markets: As retailers strive to meet newer and more complex customer demands, impulse shopping often transcends a shopper’s physical location. This trend, while often focused on e-commerce within the comfort of the customers’ home, can also be reimagined as virtual, on-demand stores. Take Peapod for example. Like many grocers, they are leading the shift to online shopping by providing fast and reliable delivery services.
However, they aren’t stopping there. Unlike traditional grocers, the company is also setting up “virtual” markets in high-traffic areas. Similar to pop-up shops, these virtual locations increase the convenience of buying groceries by going to places customers visit every day such as bus stations, public spaces and subway stations. As food trucks and eating on the go has transformed the restaurant industry, mobile grocery trucks bring convenience to customers regardless of location.
In an environment where services such as Amazon Prime and Netflix have elevated customers’ expectations and preferences for instant gratification, retailers need to think beyond in-store experiences.
Meeting customers where they are is transforming business models in many industries. As the EIU study notes, “in the current era of digital transformation, the only stable state is one of constant transformation.” Reimagining retail as an on-demand service, not bound by location, will mark the next great transformation. As retailers seek to catch up to evolving customer demands and expectations, it will be critical for leaders to think outside of the store to differentiate the customer journey.
Lori Mitchell-Keller, global general manager, Consumer Industries, SAP