Dramatic changes in technology and shopper expectations are fueling a revolution in the retail industry. Retailers that embrace the change and meet today’s omnichannel demands will emerge victorious. Matt Nitzberg, Nepa’s Chief Client Officer, recently opened the Retail Revolution Summit at the Shopper Insights & Retail Activation conference with 10 changes that are redefining the new retail world.
This post introduces a few of those concepts and some strategies to win the Retail Revolution. If you want the full list – check out Matt’s 12-minute webinar.
Shoppers have unlimited choice readily available at their fingertips – both digitally and physically. This can be a challenge for retailers that have relied on reducing assortment complexity as a strategy. As new brands emerge to meet a diverse range of consumer needs – be it an eco-conscious toothpaste or convenient men’s razor subscription – retailers must never give a product-based reason for the shopper to choose another retailer. A great example of this is Target’s decision to subscription-based Harry’s Razors, which helped them to compete strongly on Amazon’s Prime Day.
More Choices, Less Store Space
Despite the need to offer more products to win and maintain shoppers, the old retail mentality of “more stores, more sales” is no longer an effective strategy. Today, having “more stores” is a possible indication of more overhead that risks distracting a retailer from the omnichannel priorities of shoppers. As we forge into the retail revolution, it is better to think about the role of the physical store in the total customer experience than merely the number of stores.
The days of increasing basket size by leading shoppers on a treasure hunt through the store are numbered. The new reality is a demand for effortless shopping experiences – where retailers make it convenient for shoppers to get what they desire, when and where they want it. This change is fueling another change that Matt introduces, from “going to the store” to “the store comes to me”. Delivery services like Instacart, meal subscriptions like Blue Apron, and the rise of small format stores are proof of the effortless shopping trend.
How Can Retailers Grow amidst the Revolution?
As you consider these trends, Amazon will surely come to mind as both a source and benefactor of these seismic shifts. Their share of total US retail sales has increased from ~1.5% to over 5% today. The time is now for retailers to start adopting new techniques to compete with Amazon’s impressive growth – here are some useful strategies:
Accept the Omnishopper Reality
Headlines about eCommerce eliminating traditional brick and mortar retail have been replaced with eCommerce-players expanding their physical presence (e.g. Amazon and Warby Parker opening stores, Casper opening showrooms and partnering with major retailers). The Retail revolution will reward companies that adapt the role of physical and digital channels to provide shoppers with more choice and frictionless shopping experiences.
Master the complex Path to Purchase
Shoppers are not only buying in multiple channels – our research confirms they are moving seamlessly between physical and digital interactions as they research and compare brands and products. According to Nepa UK’s Managing Director Lindsay Cowan, “Marketers that connect these dots across online and offline touchpoints will influence action at different stages of the shoppers’ journey – allowing them to invest more effectively to attract new shoppers, get on the shopping list, optimize conversion and increase penetration.” For more on how to succeed in this “New Era of Shopping” – check out our Q&A with Lindsay.
Optimize CX for Revenue & Profit
While companies have appropriately pursued Customer Experience strategies to create loyalty in advocacy, there has been too much focus on improving intermediate metrics like NPS or C-SAT. Tracking these metrics and driving them upward is important, but leading brands are now collecting CX feedback on a continuous basis and aligning it to operational data to prioritize investments that improve the customer experience and the bottom-line.
Make no mistake – Retail is in the middle of dramatic changes due to technological disruptions and shopper expectations. Companies that fully embrace the drivers of this revolution can adapt and make the investments needed to thrive.
At Nepa, we take an omnishopper view that blends “why” and “what” research competencies to help clients embrace this new reality, master the path to purchase, and improve ROI on CX investments. Click here to contact us.