In this piece for RetailTechNews, Jed Mole (pictured below), VP of marketing, Acxiom, explains why retail is no longer just about the buy, but rather it’s about creating shopping environments that are attractive and rounded destinations in their own right.
Given retail’s steady migration to mobile and e-commerce – despite Deloitte reporting that 90% of retail sales by value worldwide is in-store – you may be wondering what retail will look like in the future. If the future of modern brand-building lies in creating meaningful and memorable experiences, then there is no fiercer, or more important, battleground than the retail sector. The power and continued rise of Amazon reflects a new, digital-first breed of retailers, whose propositions are driven by convenience and who continually optimise their offering to fit in with consumers’ busy, multi-platform lives. At the other end of the scale, in an evolution of the ‘show rooming’ phenomenon, which has focused brick-and-mortar stores in recent times, retail establishments are transforming themselves into destinations to help stem the trend of customer spend diverting from a simple transaction of ‘owning stuff’, in favour of offering the potential to ‘do stuff’ in the form of retail and leisure-led activities and experiences.
Retailers operating in the UK are having to contend with Brexit-related economic uncertainty at the same time as the increasingly complex and fragmented ‘digital meets real world’ customer journey. Being able to understand the consumer and deliver ‘right message/right time’ has never been more important. Retailers are inevitably having to be more creative. With people able to buy with a click, and have it show up on their doorsteps, left in a safe place or delivered to a convenient alternative, retailers need to give shoppers a reason to visit. To address this – in the spirit of ‘if you can’t beat them, join them’ – shopping malls have increasingly added more leisure and entertainment elements to their offering. They are reasons to visit in the first place, a reward at the end of a shopping quest, an incentive to keep customers in the shopping area longer, and an opportunity for retail to take a slice of the leisure/entertainment wallet. And it’s not just the big malls. We’ve seen how airports, like Heathrow, have transformed their retail spaces; but looking further out, Westfield recently unveiled its vision for 2028: ‘a hyper-connected micro-city’, fuelled by social interaction and community.
It’s widely acknowledged that the ‘do something’ future of major high streets will see flagship retail destinations become brand ambassadors that use experiences to connect with consumers. If you look around most stores, physical retail is by and large based around the same process that someone from 100 years ago would recognise, notwithstanding high-tech scanners and digital payments replacing mechanical cash registers. Think about this against the backdrop of our fast-paced, always-on, uber-connected world, and it’s easy to see why retailers are under pressure to evolve to engage the modern customer.
This modern customer has various interactions through digital and traditional media, rewriting the arc of the buyer’s journey. The modern customer has become accustomed to a much greater level of convenience, choice, and accessibility – epitomised by the relative ease with which a whim could lead to a search, quick compare of reviews and price, and a click to purchase within minutes, if not seconds. This use of digital features such as personal recommendations, product reviews, and one-click everything, has given shoppers the power to make purchasing decisions much more on their terms. When they sweep through the doors of a store, many shoppers bring these service expectations with them, or at least the knowledge that if they don’t like what they see or the price, they can probably grab a coffee and make a purchase online instead.
When customers enter a store armed with these often sky-high service expectations, retailers appreciate the opportunity and threat afforded by digital. It’s no surprise that the brands we see doing well on the high street are those that appear to have done a good job of delivering an exceptional customer experience in-store and online. They seem to welcome customers to shop in either and use the united experience to drive sales, rather than have one fight the other for the click of a buy button or scan at a checkout. To make this real requires the creative and strategic use of customer data. Unified data helps retailers not only identify their customers, but also helps them to understand and engage with their customers. Moreover, unified data allows retailers to capitalise on the advantages digital brings, while also maximising the advantages physical stores bring: for instance, face-to-face advice, demonstrations, and tactile experiences that will be hard, if not impossible, to ever replicate digitally.
Online retail remains a tour de force in terms of growth and innovation, but despite the challenges faced, physical retail is also evolving quickly. Business leaders know that technology, and the associated data, are huge parts of the answer to the questions they face. Unfortunately, for most physical stores, regardless of whether they have a strong online presence, they have to contend with a lot of legacy systems and, often, customer data. They don’t have the advantage of a ‘green field’ digital site, they have data and technology silos from years of adding the latest tech and channels. For some, this could include, but not be limited to: direct mail, contact centre, email, social, mobile app, and more. And that’s before we go near all their operational and transactional technology and systems. Some have made major investments, but struggle to get it to work together. They may have the right data and technology, but do they have the data and technology right to better identify, understand, and engage their customers wherever and whenever they chose to interact?
‘Clicks-and-bricks’ retailers have both an enormous challenge and opportunity to leverage the distinct benefits of old fashioned, in-person shopping in ways that digital-only sites simply cannot. Tomorrow’s winners will be those who are able to be the brand their customers want them to be, online or in-store, making retail a great, connected experience in both domains to meet customer expectations. For retailers with the right approach to data, the future should hold tremendous excitement for them and, more importantly, their customers.