The retail industry went through a seismic shift during the first two decades of the twenty-first century. It was a gold rush era for ecommerce while brick and mortar had to fight to stay alive.
Now, as 2020 gets underway, new retail trends are paving the way for an integrated industry, with both online and in-person revenue streams.
And it’s all thanks to technology.
Digital innovations in the retail space are changing how consumers engage with brands and redesigning the employee experience.
Retail in 2020 and Beyond: A Data-Driven Industry
As customers engage with a brand, whether it’s clicking on a Facebook ad, signing up for a loyalty program, using interactive mirrors (yes — mirrors that can engage with shoppers), or making an in-store purchase, retailers are collecting data at every touchpoint of the consumer journey.
These different data points converge to paint a complete picture of who their consumer is, allowing retailers to tailor every single brand-consumer interaction to their target audience and to specific shoppers for a highly-personalized customer experience.
With detailed analytics, retailers are merging online and in-store data to create single customer views. These cloud-based files compile data on each consumer that can be shared throughout an organization. With this information, companies use past behavior to make strategic and marketing decisions.
- Predictive analytics allow companies to:
- Plan future retail locations
- Develop omnichannel merchandising and marketing strategies
- Generate insights for frontline associates, empowering them to provide better service by knowing what customers want
- Upselling opportunities
- Deepen the connection between customer and brand
Ultimately, data will be the main driver of strategic decisions within a retail organization in order to secure, retain, and grow their customer base, boost their value proposition, and increase sales.
The Rise of Experiential Retail: Reimagining Brick and Mortar
There’s a changing of the guard in consumer spending. Baby Boomers have long outspent other generations. But with Millennials dominating the workforce and Gen Z beginning to enter the workforce, their combined spending power is rising fast, edging out Baby Boomers for that top spot.
While every generation has unique spending behaviors, there’s one thing they all have in common—most people still spend more money in store than online.
In fact, even 81% of Gen Z, a generation of digital natives, prefer to shop in person.
But consumers want their in-store experience to be about more than just shopping. They want an experience. Retailers are responding by redesigning brick and mortar with a digital component to create the next generation of stores and elevate how they engage with consumers.
2020 will usher in the expansion of experiential retail—stores will encourage shoppers to linger, explore, and really connect with the brand.
At the end of 2018, with ecommerce in the spotlight, Nike made a bold move. They opened the Nike House of Innovation 000—68,000 square feet of experiential retail space that includes a members-only area where customers can try out shoes and equipment on an in-store basketball court all while using the Nike app to engage with the brand. It’s redefining the relationship between Nike and its consumers. And it’s working.
Even companies born in the e-commerce world are recognizing this trend and opening physical locations to interact with consumers in person. Known as clicks-to-bricks, online retailers, like eyeglass company Warby Parker and mattress company Casper, are looking to engage customers with a multi-platform experience by opening up physical stores.
Welcome back, brick and mortar.
Hybridized Shopping: The Intersection of Retail Revenue Streams
Consumers are using multiple resources for every shopping experience. In fact, 73% of consumers use numerous channels to look up, research, and buy a product.
With five billion people around the world connected to a mobile device, retailers are creating omnichannel marketing strategies and engaging with consumers on multiple platforms as well as in person. Customers can even engage with a brand online while they shop in store.
This integrated experience is increasing the paths to purchasing. In fact, more than half of consumer spending in store is influenced by digital engagement.
This is the new world of hybridized shopping.
With multiple consumer touchpoints, companies increase sales and build a loyal base. Companies who master this omnichannel approach have a 91% customer retention rate.
But as this hybrid trend takes hold, retailers need to make sure they create a seamless customer experience across every digital platform and in store.
Customers want consistency in brand engagement. As companies collect data they need to create enterprise-wide communication systems that deliver a uniform customer experience.
Strengthening the Staying Power of the Retail Workforce
With more customers making purchases in person, it’s more important than ever for the retail industry to strengthen their workforce. The industry has a 60% turnover rate.
Now, companies are designing mobile-first digital strategies for their workforce just like they are for consumers, connecting and aligning every employee through a workforce app.
Internal communication platforms engage employees by:
- Giving frontline retail teams a platform to contribute ideas and provide insights to company leadership
- Delegating shift management to employees for greater autonomy
- Delivering internal marketing strategies to create brand ambassadors
- Creating opportunities for upskilling employees to management positions
- Empowering employees with customer insights so they can provide excellent customer service and build relationships with shoppers
Retailers are collecting data on how these digital strategies are working through in-depth analytics included with their workforce management systems.
And this digital trend is getting results.
Retailers who invest in employee communication technology increase employee engagement, boosting retention by 26%.
Those engaged retail employees increase a company’s profits by 69%.
With those numbers, the retail industry is starting off on the right foot in 2020.