Takeaway: Many retailers feel like they are caught somewhere between the stronghold Amazon has on retail and the nimble, digital-native vertical brands (DNVBs) that were built for a digital age. How can those in the middle compete for dollars? It's about investing in your consumer experience. Here are three ways to recapture consumers' hearts in today's omnichannel reality.
The outlook may seem bleak for in-store retail. In December Sears and Kmart reported a $748 million loss alongside plans to close more unprofitable stores. Last month, JC Penney predicted it may close 30% of its stores over the next two years. And Macy's continues its plans to shudder 10% of its stores despite double-digit growth in online sales. We've covered the decline of malls in the past, but before you start asking “Stores? What are they good for?” consider that 90% of all consumer purchases are still made in a physical store, according to NRF and Forrester Research.
So it's not the mere fact that digital-native vertical brands like Casper, Warby Parker, and Dollar Shave Club sell online which has made them so successful. While NRF and Forrester Research found digital touch points impacted an estimated 49 percent of total U.S. retail sales last year. It's clear that the age of distributed commerce means consumers are creating their own shopping journey with whatever devices or retail options are available and most convenient for them. We've covered the ways that many brands have successfully brought the in-store experience online. To be truly omnichannel, and survive the retail squeeze, big box retailers must find ways to focus on what they can do to make customer experiences unique and convenient for this new kind of shopper.
Here are our suggestions:
1. Connect your online and in-store inventory
Product research and decision-making takes a long time. It's likely your shopper begins browsing online and will want to see it in-person to touch and feel it, test it out or try it on, especially if it's a considered purchase like a couch. Why force consumers to spend hours amid clothing racks searching for something they probably already researched online? Make it easy for customers to find out what's in stock and where it is on in your physical location when they get there.
2. Inspire your most loyal customers with special access
Help your loyal customers connect with your brand by creating early access to new products or curated events with exclusive perks. If all you are offering your repeat customers is a traditional loyalty program you are missing an opportunity. Create unique experiences for your most loyal members that speak to the values of your brand. Consider the ways in which the most direct connect, social media followers or mobile app users can be provided memorable opportunities to get something back from your brand.
3. Create personalized product recommendations that keep your customer at the center.
In this age of consumer, your shoppers want it to be all about them. Offering your customers a way to translate their likes and dislikes into product information is an excellent way to start a conversation and help them find what they are looking for. DNVBs can do this well because they are focused on a niche market. But there are some broader retailers doing it well do. We've shared a list of best in-store digital experiences before and one of the most frequent features was the high-tech ways in which clothing and luxury brands were able to combine their merchandise with customer's taste.
What is all of this going to require? An investment in customer data technology and an investment in your product content technology. Product content helps the shopper research, builds trust, and ultimately make a decision. Ultimately this new wave of retailer-consumer interactions requires a more nimble control of what product information you serve to your consumer. We recently surveyed retail leaders to ask them what they are doing about the challenges they face. Read their answers in our new ebook: Win the Sale: New Data on How Brands and retailers are Tackling Distributed Commerce