As many great retailers like John Lewis, Boots and Halfords close the doors of some physical outlets, it’s clear that even iconic retailers with fantastic in-store offerings face challenges under the combined weight of coronavirus’ impact on footfall and the rising preference for ecommerce. The unavoidable impact on physical retailing is close to being apocalyptic, with some predicting that footfall in bricks and mortar stores in the UK will halve. The bottom line is that being a good physical retailer is no longer enough.
Bo Finneman of McKinsey describes the need for retailers to adapt to a mindset of ‘winning every purchase’:
‘...there’s a need to get under the concept of winning every purchase and finding a degree of innovation or newness — or something by which you can compel someone to buy you again—that every brand is facing, almost regardless of how strong you’ve been in the past.’
The truth is that we’re on the brink of experiencing something of a revolution in retail; one that signifies a break with the ‘old way of doing things’ – the endless rows of clothing rails; the enormous out-of-town shopping centers; the endless irrelevant marketing messages that are broadcast with no care for the recipient – and which embraces a future where being laser-focused on the customer experience is the only competitive differentiation.
Rapid digital transformation that focuses on the customer experience is, therefore, the only way that retailers can differentiate themselves and thrive. In order to do this, retailers need to expand their digital capabilities – and fast.
One key opportunity to bring ‘newness’ to the relationship between retailers and their customers is through personalisation. Covid has brought with it a new appreciation for the individual behind the purchase; encouraging brands to think more about how to make their comms all the more relevant to gain cut through. Email marketing therefore has moved away from product-centricity towards customer-centricity.
Boutique marketplace Trouva has shown how a personalised approach informed by customer behavioural data can contribute to overall sales success. During the early months of lockdown, by leveraging insights on their customer base, they were able to craft campaigns tailored to customers’ current interests based on categories and specific items they were interested in. This focus on making emails as relevant as possible to each individual customer meant the brand saw email engagement rise rapidly, with a 50% increase in click throughs to site and 13% increase in open-rates.
What we’ve seen in lockdown is just the start; and to thrive in the new normal, retailers must focus on making each marketing message they send count.
Creating great customer experiences involves nailing every part of the customer journey, from the website, to email comms, to key physical outlets that do remain.
Retailers were already sitting on huge amounts of customer data that they have typically struggled to leverage for personalisation, a challenge that will only be compounded by more digital activity, and a growing number of online and offline touchpoints and channels to incorporate into the single customer view.
But the ability to leverage this data in real-time will be critical to creating the unique experiences that keep customers shopping again and again – it offers a huge opportunity for better understanding customer behaviour and creating relevant, more meaningful marketing experiences that consumers are coming to expect. This applies in the bricks and mortar realm too, and we’re seeing companies like Nike invest significantly in creating hyper-connected retail concept stores.
This is where automation and AI really have a chance to flourish – enabling retailers to analyse and respond to individual customer behaviour and identifying their interests and when they are next going to shop. This also makes room for marketers to focus their time away from spreadsheets and data crunching and onto making creative decisions about how to engage their customers the best.
In the past, creating a personal experience by offering products and services that are uniquely tailored to a customer’s own preferences and interests was a ‘nice to have’ for retailers. Now it’s essential.
Creating a customer-centric, omni-channel approach to retailing allows a brand to treat each customer as a person rather than a sale; key to offering that much needed personal touch to the shopping experience. As brick and mortar retailers adapt to the “new normal” they must be prepared to update their processes and offerings, undergoing huge digital transformation to ensure that they are still delivering positive customer experiences. If they aren’t able to adapt accordingly then they will find that they will lose market share to competitors that are valuing their customers and providing safety as well as a joined-up and consistent omnichannel experience that understands individual wants and needs.
Ivan Mazour is CEO and founder of Ometria