Rebuilding Retail Relationships: 3 Rules for Winning the Digital Customer

Treat me like the unique person I am. Be there when I need you. Tell me what you stand for. Is this a wish list from an online dating profile… or what consumers expect of today’s retailers?

A new report, Shopper-First Retailing: The New Rules of Retail from the Actions, Voices, and Eyes of Today’s Consumers, recently published by Publicis.Sapient and Salesforce, examined what matters to the modern digital and in-store shopper. The research combines survey data from 6,000 people across six countries, insights from 500 million shoppers worldwide and mystery shopping visits to more than 70 stores. This report explores three shopper-first mandates that focus on how retailers can win today’s digital customer.

Shopper-First Mandate #1: Make It Fresh

Customers interacting with a retailer or brand expect to have a fresh experience, regardless of their point of interaction. For example, 69% of store customers expect to see new merchandise. This point also holds true for marketplaces and ecommerce organizations. Data shows that 59% of bestselling products change each month, creating a sweeping product catalog churn of 32%. In addition, 75% of site search queries are new each month.

These findings imply that that all merchants must focus on freshness. There are many ways organizations are creating fresh products and experiences. The research found an increase in brand partnerships and customized products. Think of American Girl’s full-scale personalization of its dolls or Puma’s cross-brand collaborations with influencers like Rihanna and likeminded brands such as M*A*C Cosmetics.

Unfortunately for traditional brands and retailers, marketplaces are gaining ground from organizations not meeting customer expectations. Our data shows retailers are losing the repeat purchase: while half of first-time purchases are conducted through retailers (vs. 31% for marketplaces), 47% of consumers prefer to make a repeat purchase through a marketplace. To reverse this trend and win back shopper loyalty, brands and retailers must hone in on customer service and convenient purchase models, evaluating tactics like cashier-less stores and 24-hour return kiosks.

Shopper-First Mandate #2: Be Where I Am

It’s essential for retailers to develop a frictionless experience accessible wherever shoppers are. Our research shows online retailers may hold an advantage during the initial discovery, as 87% of shoppers begin their hunt in digital channels (up from 71% last year). Further, mobile accounts for 92% of ecommerce order growth; mobile wallets represent 30% of mobile orders globally. In fact, sites with mobile wallets see 2x the mobile conversion rate growth. The implication could not be clearer: it’s a mobile-first — and often mobile-only — world.

However, our research also demonstrates the value of a true omnichannel experience. Forty-six percent of all shoppers regardless of age prefer to make a purchase in a physical store; even Gen Z feels this way, with 58% citing this preference. While digital sales continue to climb, marketplaces and ecommerce sellers can’t discount the appeal of a traditional shopping experience, especially among under-banked, experience-leaning younger customers.

Shoppers are still experimenting with voice shopping: 38% have used voice for at least one shopping activity (purchasing, searching, checking prices) in the past three months. But among those who own smart speakers, that number jumps to 70%. As adoption of in-home assistants increases, voice shopping will gain serious momentum. Leading brands like Perry Ellis are thinking service-first with voice. Perry Ellis lets shoppers communicate with a voice-based personal stylist to get occasion- and lifestyle-specific outfit ideas.

Shopper-First Mandate #3: Give it Meaning

In the quest for better customer understanding and more meaningful relationships, personalization by machine learning and artificial intelligence is already having a measurable impact. Our research shows that just 6% of visits include engagement with AI-driven product recommendations, yet they drive an outsized 37% of revenue. Further, personalized experiences yield a 4.5X higher cart rate and 5X higher per-visit spend. Ecommerce organizations should note this massive impact and stop hiding recommendations several long scrolls down the product detail page.

Another way that retailers are adding meaning to shopper relationships is through next-generation loyalty programs. Not just about accruing points, they reward shoppers with better experiences and build more meaningful relationships. In some cases, these loyalty programs cross into membership territory, proving so valuable that customers are willing to pay for them. Case in point: Amazon now has more than 100 million Prime members.

Finally, values-based marketing has hit the mainstream, as shoppers increasingly seek to put their wallets where their values are. Forty-five percent of shoppers say they’d be more likely to buy from a brand making a charitable donation with purchase. Natural beauty brand Lush has gone beyond donations, even hosting animal rights protests in stores. REI is famous for its Black Friday #OptOutside campaign, and gives back to local communities through rewilding projects and recycling products through gear swaps.

As retailers and brands embrace digital transformation and retool their in-store operations, a continued focus on their unique audience is essential. Our research shows that these three basic mandates should be at the heart of any new consumer engagement strategy.

Hilding Anderson is Head of Strategy for Retail, North America, at Publicis.Sapient

 

 

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.