In 2016, consumer retail shopping unveiled several trends that brands will want to consider as they plan their strategies for the rest of 2017, particularly for the important fourth-quarter holiday shopping season.
It’s important to devise and test some strategies earlier in the year, when there is still time to make any necessary revisions before the holiday shopping starts. Below are five 2016 shopping trends to build on for 2017.
Recognize physical store dominance, e-commerce growth
Brick-and-mortar sales still account for most sales and will continue to be important as the shift to e-commerce continues. Not only did Amazon capture 40% of the increase in holiday sales from 2015 per Slice Intelligence, mall traffic was down 12.3% during November and December, while mall sales dropped 10%. Large retailers such as Target also saw significant increases in e-commerce sales.
Make sure that customer service training and support is at least as robust for contact centre associates as for in-store associates. The physical locations are shrinking in size and number as retailers focus on making them destinations for browsing, delivery and part of the omnichannel experience.
Focus on m-commerce
The fastest growing element of e-commerce is m-commerce. In 2016, the trend toward mobile commerce continued to accelerate, with Black Friday alone generating more than one billion dollars in business, marking the first time that m-commerce had topped that threshold. According to Adobe, m-commerce represented 31% of total sales. More than one-third of PayPal sales were through mobile devices.
That said, there was a large disparity between mobile apps. The highest performing ones had 58% of users opt to receive notifications, while the lowest performing ones had only 21% of users opt in (the average was 41%), according to Urban Airship.
We’re also seeing that not all companies are creating apps. Many are opting for mobile optimized sites that make mobile purchasing easier without the need for downloading an additional app.
Starbucks continues to show the way to effectively merge e-commerce and physical locations. The company understands customer buying habits, has a loyalty program that is tightly integrated with sales, payments and, importantly, mobile ordering and payment. The company’s mobile payments account for seven per cent of total U.S. mobile transactions, according to the company.
As the Starbucks example illustrates, to be relevant, brick-and-mortar stores have to provide reasons for people to go and make the experience as enjoyable and as frictionless as possible. To make the physical stores part of an omnichannel experience, brands need to recognize that omnichannel shopping means more than just one person buying online and another person buying in a brick-and-mortar store.
Though there are customers who interact with a brand exclusively through a single channel, a Harvard Business Review study of 46,000 shoppers found that 73% used multiple channels in making a purchase. Omnichannel shopping is a process, with the same customer often starting the initial research online, examining an item in the store, purchasing the item through the contact centre, then having the item shipped to the home, to the store or, in some instances, even to work locations.
Retailers need to offer customers the ability to interact via a variety of channels in what they expect to be a seamless transaction. So, brands need to be able to collect and respond to each element of the transaction (i.e. discovery, research, delivery and post-sales customer service) in ways that will prompt the customer to move further down the sales funnel to an actual purchase and then toward future purchases.
The holiday campaigns started earlier than ever before in 2016, showing the need to build an early relationship with a prospect to generate the holiday sale. Some brands started sending out push notifications before Halloween. Some notifications were as innocuous as “Black Friday sneak peek,” building anticipation for offers that were to come.
Whether it’s a holiday sale or not, it’s important to “hook” your customers early… a loyalty program is a great way to do that. Set tiers so people have a reason to make the extra purchases with you vs your competition.
Message often, but with purpose
Retailers sent 56% more holiday notifications in 2016 than the previous year. According to Urban Airship, 84% of notifications that were sent were highly targeted to shopper locations or behaviors. Those notifications saw an average of a 129% increase in engagement over messages sent to all opt-in consumers.
Critical in all of the above trends is the importance of customer information gathering and a commitment to using this information for truly targeted and personalized communications.
As a key member of Aimia’s Global Loyalty Solutions leadership team, Erin Raese is responsible for managing and developing the business development strategy and sales pipeline for the U.S. region. She also oversees the development of client marketing strategies, with a focus on helping organizations build profitable relationships with their customers, develop long-term brand loyalty and increase customer retention.