2020: The Decade of Customer-Centric Retail Culture
As we move forward into a new year, a new decade, and a new global retail landscape, it is more important than ever for businesses to understand the shifting needs and expectations of their consumers. Today, the consumer is King, and they are more in control than ever before. Alongside their high expectations and increasingly changing needs, data-driven technologies and AI are also changing the way shoppers behave and purchase, and are crucial to creating a differentiated shopper experience, both on and offline. “We are sitting on the cusp of yet another wave of transformational change. New technologies and expectations are emerging, and an evolving consumer is looking for a fully personalised shopping experience.” Stephen Sadove (Former Chairman, Saks). With the transformation of the old retail model into that of ‘consumer-controlled-retail’, brands need to critically align themselves with both the needs of their customers, as well as the intelligent processes needed to reach them, in order to stay constantly relevant, and claim a seat in this competitive game.
So, how exactly has retail changed moving forward in 2020, what are the expectations of consumers, and what are the key factors to succeeding in this highly competitive landscape? One thing is for certain, even with the frightening statistics and recent past events showing retail to be in a very concerning state, people will continue to spend money in the future. But with the changing landscape, businesses need to innovate and differentiate in order to survive and thrive. We at HGA Group have always believed in a ‘customer-centric’ approach to doing business, and now so more than ever before. We tailor our service offering to directly meet the needs and desires of our clients, always asking, “Does this serve our clients best?” By first and foremost focusing on creating positive experiences for our customers through relationship building and service offering, we build customer loyalty and satisfaction (which leads to referrals and more customers). Moving forward into this new decade, we believe that a customer-centric business approach is vital to prospering in the retail sphere, with brands needing to specifically focus on offering personalised experiences, implementing creative shopping channels, and creating positive social impact.
CUSTOMER-CENTRIC APPROACH ONE: PERSONALISED, EXTRAORDINARY, AUTHENTIC EXPERIENCES
In the complex environment that is retail, brands need to get back to basics and restructure their marketing strategies in full alignment with their consumers new ways of purchasing. It is all about the ‘human component’. 2020’s shoppers prioritise extraordinary customer experiences tailored to their specific desires, preferences or lifestyles. In order to speak the language of the modern-day consumer and drive sales, personalisation and differentiation is key. 80% of consumers are more likely to make a purchase when brands offer personalised experiences (The Power Of Me: The Impact Of Personalisation On Marketing Performance. Epsilon, 2018). Achieving success in this new retail-era is dependent on knowing, understanding and anticipating the unique and ever-evolving needs, behaviours and tastes of one’s customers at every stage of their retail journey. Brand’s need to constantly be up to date with the changing environment that makes up their consumer landscape, and continually adapt and reinvent their offering to meet the micro- and macro-needs of their customers. An essential approach to achieving this is for brands to develop a genuine, ongoing relationship with their customers. 79% of consumers feel that brands must actively demonstrate that “they understand and care about me.” (Wantedness. Wunderman, 2018). These authentic, two-sided conversations go beyond transactional messaging and will form the foundations for brands to create and nurture long-term loyalty and trust and allow customers to feel heard and appreciated. 70% of consumers say a company’s understanding of their individual needs influences their loyalty (State Of The Connected Consumer. Salesforce, 2017). Among U.S. consumers, 50% like personalised communications and 16% like them a lot; only 20% dislike them. 58% say they will sign up for personalised offers (Consumer Value Personalisation: Up Your Game to Not Miss The Opportunity Report. Periscope by McKinsey, 2018). Through crafting engaging conversations and building a sense of community, brands can set themselves apart in the eyes of their consumers and build stronger relationships with their customers, which of course, in turn, drives sales and brand loyalty. With more choice than ever before, the new decade’s shopper is able to now be more discerning than ever. Customers’ expectations for next-level, intimate shopping experiences are rising continuously, with brands and retailers needing to understand their shoppers on a far deeper level in order to connect with them and deliver better products and more customised and convenient services. Consumers are willing to spend up to 16% more on products and services with companies that offer a better experience (Consumer Intelligence Series: Experience is Everything. PwC, 2018). Consumers not only want, but expect to be offered elevated customer experiences that are more meaningful and personal to them. In today’s age, they want to be appreciated beyond the sum of their transactions and want to feel like they are more than just a number.
CUSTOMER-CENTRIC APPROACH TWO: OMNI-CHANNEL CREATIVE STRATEGY
Gone are the days of single or multi-channel retailers. 2020 sees the continued rise in omni-channel retailing strategies, increasingly blurring the lines between digital and physical shopping experiences, offering customers seamless and consistent buying experiences across all buying channels (both on and offline) within a brand’s ecosystem. Today, stores need e-commerce, and e-commerce needs stores. People no longer just buy in-store or online anymore – it is a fully connected and symbiotic relationship. The modern consumer is looking for a ‘fully integrated, shopping experience’ that bridges the gap between digital and physical - one that offers an all-inclusive user-experience. This means connecting brick-and-mortar to mobile-browsing, and everything in between. Consumers expect to be able to shop conveniently in a customised virtual environment, whilst also experiencing an elevated in-store experience. Consumers also expect to be able to instantly and effortlessly access online information to check prices, compare products, read reviews, and check social media before making any purchasing decisions. Information needs to be readily available, and the shopping experience must be able to be completed and repeated across all the shopping channels. “Shopping a brand needs to “feel” the same, regardless of channel. More than ever, a holistic shopping experience across all customer touch points is vital for brands. With an increasingly complex customer journey and dozens of customer touch points with brands, from apps to websites to brick-and-mortar stores, companies need to present a seamless experience across touch points for customers.” (Carlos Castelán, Managing Director of The Navio Group). A survey of 46,000 shoppers revealed that 7% shopped online exclusively, 20% were store-only shoppers and 73% used multiple channels (More than digital plus traditional: A truly omni-channel customer experience. McKinsey, 2016). An omni-channel retail strategy allows (and requires) brands to be agile and responsive to their shopper’s needs and offer them integrated in-store and digital experiences. Retailers are able to converge the two worlds through leveraging the modern innovations in AR and AI technology. These innovations, when harnessed correctly, simplify customers lives, keep them more engaged, and increase their buying satisfaction. The point of difference that will ensure retail success will come in where brands are successfully able to merge this technology with the essence of traditional retail transactions, namely the ‘human component’. “This will play out in new avenues of innovation which meet consumer demands while leveraging technology to create a meaningful online experience.” (Derek Cikes, Commercial Director, Payflex).
CUSTOMER-CENTRIC APPROACH THREE: SOCIAL RESPONSIBILITY AND TRANSPARENCY
The retail industry, specifically fashion, and the scale of its negative environmental impact is undeniably second to none. More and more, businesses are finally beginning to take this global crisis of climate change seriously and acknowledging the role they play in the adding to the problem. But, knowing you should focus on sustainability, and putting conscious and intentional action into creating positive change are two different things. After many instances of large brands recently ‘greenwashing’ the public with misguided advertising, customers are becoming increasingly more informed and aware about the impact that their purchases have on our planet and making better buying choices. In a 2017 study, they found that 87% of Americans would purchase products from businesses who advocate for social and environmental responsibility. And if that brand behaves in a way contrary to that, 76% would boycott the business (Cone, 2017). Sustainability isn’t a trend – it is a movement that is here to stay – so brands cannot avoid the need to boldly shift the way they run their businesses to become a part of the circular economy. “Why are (some) retailers now focusing on sustainability? Because they have to. Full stop. Why do they have to? Because in the short term our environment desperately needs it. In the midterm social & environmentally conscious retailers will benefit economically by being able to justify increased margins to support their triple bottom line. Long term, our global economy will also depend on it.” (Carl Boutet, Retail Executive in Residence at Highline Beta). Many businesses are now implementing strategies to demonstrate a commitment to sustainability and building these deliberate efforts and promises into their company’s mission and brand story. It is important for brands to incorporate these concerted efforts into how they communicate with their customers, ensuring that the messaging is authentic, honest and transparent. Today’s consumers, especially the younger generations, are holding retailers to a higher standard – they want to know what they stand for, what their social impact is, and what they stand to gain by supporting a specific business. They want to know that the brand’s they back are committed to changing the industry and supporting the needs of the planet long-term. It is important for the modern shopper to seek brands that align with their socially conscious values. A 2018 survey found that “52% of millennials and 48% of Gen X’ers feel it’s important that their values align with the brands they like,” while 35% of baby boomers surveyed felt the same way (Euclid, 2018). It is crucial for brands to pledge their commitment to tackling climate change, set strategies around sustainability, and invest in innovative, scalable processes to reduce both their and their consumer’s environmental footprint. According to a survey, 88% of consumers want brands to help them lower their footprint, and they’ll be more likely to frequent your business if you help them in their efforts (Forbes, 2018). It is now not a question to debate; it is what customers have come to expect. Customers want to feel empowered by both the product and brand choices they make. According to research, 87 percent purchase a product because a company advocated for an issue they cared about, and 76 percent refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs (Cone, 2017). Another recent report shows that 93% of global consumers expect more of the brands they use to support social and environmental issues. It also found that 68 million adult Americans make purchasing decisions based on their personal, social, and environmental values and that they’ll spend up to 20% more on environmentally sound products (The Value of Sustainability in Retail Marketing, RILA). What is good for humanity, is good for business. No longer can brands get away with environmentally unfriendly and unethical business practices. And the companies that are leading the way in sustainability and making it a core part of their brand are earning lifelong brand followers.