Four Retail Strategy Influencers for Growth
Forrester Research report The New Paradigm Of Retail states, “Today's shopper knows more about the product than store associates do, has a broader online selection with filtering tools, and can close the purchase more easily on their own with online product upsell options. Retailers must adapt to regain a customer experience.” 1 Future growth for
Forrester Research report The New Paradigm Of Retail states, “Today’s shopper knows more about the product than store associates do, has a broader online selection with filtering tools, and can close the purchase more easily on their own with online product upsell options. Retailers must adapt to regain a customer experience.”
1 Future growth for retailers depends on the retailer’s ability to adapt to the customer’s preferences. We have identified four “Retail Strategy Influencers” that pave the way to growth.
1. INDUSTRY TRENDS
According to Forrester, “Online retail grew from 1.4% of overall US retail sales in 2001 to 14.0% in 2017; Forrester expects that US consumers will spend $712 billion online by 2022, accounting for 17.1% of total US retail sales.” 1 Being aware and up to date on what’s happening in the retail industry is imperative to remaining sustainable. It is imperative to be on the forefront of leading-edge tech, trends and influences within the industry. It is equally important to know your competition and their maneuvers. For example, Amazon is pressing for innovations such as drone delivery. Target and Walmart along with many other retailers have also been focusing on investing in technology to progress in-store and online shopping experiences. Retailers are able to make strategic decisions based on trend analysis, and use data to identify gaps in their strategy.
2. CONSUMER BUYING BEHAVIOR
Consumers undoubtedly control the retail industry so being attuned to their wants and needs is essential. Consumer needs that will never diminish are: ease of use, available information, and personalization. According to a study cited by Glenn Taylor, 96% of global shoppers have left a store empty handed on at least one occasion.
2 Occurrences of this nature can be avoided if retailers focus on the priorities of consumers and integrate those priorities into their own processes. This can be as simple as surveying consumers and asking what their shopping expectations are. What do consumers want from you particularly? This isn’t a one-time action however; consumer behavior is dynamic, so retailers should recurrently gather and assess this information to understand shopping habits and behaviors. A Forrester article advises retailers, “Ask customers what they’d like to see from you. If it’s a broader product assortment or a more generous return policy, figure out how to put those in place.
Consumers control the market, and consequentially the actions of retailers. One response of retailers has been to focus more on ecommerce, and rightly so. A report by Forrester outlines the impact ecommerce and other digital channels have on the retail industry, “In 2017, more than half of retail sales in the categories that Forrester measures were impacted by digital devices (see Figure 1). What does this digital impact mean? Forrester’s annual digital impact forecast measures two components: total eCommerce sales and total sales that happen offline but are influenced by a digital channel such as a PC or mobile phone (i.e., “digital influence”).” 3With the vast amount of retailers focusing their efforts toward ecommerce, why are many still falling behind within the industry?
An issue arises when ecommerce challenges in-store operations, as focusing on ecommerce alone has generally reduced store traffic. A more effective methodology would have online and in-store operations working together. It’s not simply combining, but more so unifying ecommerce, other digital touchpoints, and a unique in-store experience that will ultimately boost sales.
Ecommerce provides the benefit of analyzing the shopping habits of consumers; leveraging this data enables retailers to optimize the customer journey and offer consumers exactly what they want and need. Everlane, Bonobos, and Amazon are great examples of digital retailers who have mastered data and analytics and are setting up physical stores that encourage consumers to roam around and touch products; an in-store feature they know will lead to an increase in sales.
Many retailers are aware of the various methods consumers use to purchase products and so they implement a multi-channel model. The problem is retailers fail to connect these various channels which is why adopting an omni-channel model will put them at a competitive advantage. According to a Forrester report, “Omnichannel Still Has Relatively Low Adoption – While retailers have spent nearly two decades thinking about cross-channel fulfillment approaches, a minority have actually implemented them.” 3 To reap the benefits of an omnichannel model, retailers must have their online and offline presence support one another to ensure their in-store and online processes are interconnected. One way to prevent online retail from challenging your physical store presence is to create a unique in-store experience that cannot be reproduced online—this also separates you from a traditional retailer. A report by Forrester emphasizes the importance of having an omnichannel model in saying, “Customers believe they are engaging with one unified brand or organization, regardless of the various touchpoints that they use. This means retailers must ensure the continuity of information and resources across digital and store touchpoints — or risk losing customers to competitors that do.”
4 Retailers who properly implement an omnichannel method will be able to create a quick, consistent, seamless and flexible experience for consumers throughout the entire customer journey.
Stay in the loop about what goes on in your industry by paying close attention to trend analysis – follow your industry on LinkedIn, keep tabs on the market, collect data on your consumers and gather insights, read blogs posted by industry experts and even your competition, subscribe to magazines, newsletters and news cites such as Forbes, Business Insider, and RetailWire. The key is to be able to adapt or better yet, react with an innovative approach.Be adept in identifying and analyzing consumer wants, needs, and behaviors—these should act as a focal point for your organization.
A report by Forrester summaries the beneficial results of doing this by stating, “A truly omnichannel operation that spans the customer life cycle will optimize revenue, deliver capital efficiencies like cost savings, spawn operational efficiencies, and improve the customer experience overall.”
4 As many retailers are directed to enter the digital space, it is important not to abandon focus on your physical store operations as shoppers today use multiple channels. Instead, fuse your online and in-store processes to become one seamless operation. Sources: 1Forrester Research, The New Paradigm Of Retail, April 18, 20182Study Reveals Why 96% Of Shoppers Leave Stores Empty-Handed – Retail TouchPoints
3Forrester Research, Digitally Impacted Retail Sales In 2018: Still Only Half Of Retail, March 26, 2018
4Forrester Research, Retailers Are Starting To Reap The Rewards Of Omnichannel Commerce, March 28, 2018
Forrester Research, It’s Time For Retail Stores To Open Their Doors To The Digital Org, May 14, 2018