Future of Commerce
Bringing Back the Soul of Retail
eCommerce. It placed the world’s inventory at our fingertips. When it emerged, the first big behavioral shift was to price-shop everything and see if you could find it for less money—bringing immediate and lasting pressure to all retailers.
Now, most of that price pressure is more pronounced around commodity goods like light bulbs and electronics—there isn’t a lot of emotion behind buying a lightbulb. However, more specialized and higher-end retailers have discovered there’s still demand for personalized service across the customer journey. Despite the façade of anonymity or removal of human interaction with eCommerce, shoppers still value the human connection—retailing with soul.
eCommerce. It placed the world’s inventory at our fingertips.
Online and off, building a personal relationship with the customer is critically important. It’s also amazingly complex. Consider just two statistics: online sales account for only 8% of all retail purchases, but 80% of retail transactions begin online*.
Those numbers show that digital retail has a much bigger impact than its direct 8% market share. They also suggest that there is less of a disconnect between online and in-store shopping than we thought, and the dynamic is getting more complicated. People who start their search online may never even visit the retailer’s website. They could start on Pinterest or Houzz to get inspired, but end up at Nordstrom to purchase something.
Connecting with customers
Physical retail is not going away, but it is in a state of transformation. Frankly, we all want choices, and sometimes that includes going into a store where we can sit on a sofa to see if it is comfortable, or try on a pair of shoes to see how they fit.
For many retailers and brands, the challenge is about sustaining a connection with their customer. How can a retailer maintain a presence inside online communities, and then seamlessly transition a customer from the point of inspiration to an experience at their own site—or store—that ends in a purchase? How can they strengthen the connection and create a post-purchase conversation?
Retailers have powerful assets they can use to their advantage: their stores and store associates. Savvy retailers are using new platforms like Layer and Tulip to facilitate white-glove experiences and conversations across all channels. Online, retailers can continue the conversation that was started in-store and deliver targeted experiences that are relevant to customer-specific preferences and purchase history. In-store, associates can provide exceptional service and engage the customer through channels that extend online.
Shoppers still value personalization—retailing with soul.
eCommerce has also “extended the aisle” for stores. Because not every store has every item, store associates can suggest inventory from online and have it delivered it to their customer’s doorstep—all in the same transaction.
There are myriad ways retailers can use data, technologies, and digital engagement to enhance connections with customers. Starting with the top of the funnel, when customers find inspiration in online communities, retailers can start a digital conversation that keeps them top-of-mind with potential and/or returning customers. Digital is essential for every stage of the customer journey.
All of this complexity puts renewed emphasis on relationships between brands and retailers and their customers. Wherever the customer engages, all parties on the selling side will benefit from closer synchronization that helps the digital and in-store properties work in harmony. It’s no longer a question of online versus in-store.
If cost-cutting digitization stripped out the soul from many shopping experiences in Act One of eCommerce, Act Two is seeing smart retailers and brands bring it back.
As retail evolves, there will always be room for companies that treat their customers well—it’s increasingly a differentiator. Customers value choice, convenience, and personal attention from merchants they trust. If cost-cutting digitization stripped out the soul from many shopping experiences in Act One of eCommerce, Act Two is seeing smart retailers and brands bring it back.
There’s an opportunity for retailers to re-engage in direct conversations with their customers. The ones that do—and do it across all of their channels—are going to come out on top.
Tell us more:
Succeeding in retail:
What's one piece of advice you’d give that you’d actually follow?
Understand where your customer goes and how they interact at each stage in the purchase funnel – and meet them there. For example, when researching your products do customers start their search on Pinterest, Google or in-store?
How can you engage them where they are and develop a personal connection with them? When they are in the consideration and buying phases of their journey how can you inspire trust while increasing conversions? How can you continue the conversation post purchase and build loyalty?
Customers have access to more information than ever before, and therefore more options. Building a customer journey roadmap and corresponding strategy for how to engage with them at each stage in the journey is critical to succeeding in retail.
Retail and logistics technology:
What’s something we, as an industry, aren’t talking about that we should be?
Given the expense of free shipping and returns, how do we incentivize customers to keep products? This is certainly something that is being talked about, but I think there is room for creativity and innovation here. What type of loyalty programs can be implemented around keep rates? How can we continually push the envelope to reduce returns? These expenses have a drastic impact on margins, so figuring out how to move the needle will have a meaningful impact on business.
What’s a product that you now buy online but thought you never would?
Certain apparel items like jeans and dresses. I always thought those types of products were too fit dependent to risk buying online, but with the ease of free shipping and returns I have managed to find great items that actually work for me, and easily return those that don’t.
What’s a product that you now don’t think you’ll ever buy online?
Produce, meat and seafood. Seeing a picture online can’t replicate seeing, feeling and smelling an heirloom tomato or sashimi grade ahi.
A little about you:
You’re a new addition to a crayon box. What color are you?
Teal. The creative side of logical, trustworthy blue. Plus, I love the ocean and all of her deep shades of teal. There is something both grounding and inspiring about being on the water, and that feeling is my happy place.
Retailers, Give Your Customers What They Want
Brian Kilcourse, Retail Systems Research LLC
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