30 second summary:
- The switch to online shopping was well advanced before the pandemic.
- Consumers use the extended range of services to receive the products.
- Customers see digital and in-store as two facets of the same experience.
- People look for brands that instantly deliver the values they believe in.
- In the absence of historical data, BI and search results have become critical.
Now that the Christmas shopping season is in full swing, we’re seeing how the year of the pandemic – and its unusual consumer trends and behaviors – is affecting retail. While some of these trends could return to historic levels after the pandemic, others are likely to transform retail through 2021 and forever.
The move to online shopping was well advanced before the pandemic, although no one could have predicted the rate at which adoption would increase in recent months.
As digital accounts make up an increasing proportion of purchases, retailers are challenged to change their view of the online channel.
It does not make sense to perceive digital as a threat to the company, but rather as a complement and even as a complement to the shopping experience in the store.
With this in mind, where should retailers focus on the holiday season and 2021?
Consumers are driving the rapid transition to digital
According to the National Retail Federation, 59% of shoppers started shopping during the vacation earlier this year. Morgan Stanley analysts estimate total Black Friday sales were down 20% year over year, with the decline in foot traffic overwhelming healthy online sales increases.
According to Adobe Analytics, consumers spent $ 9 billion online on Friday. This corresponds to an increase of 21.6% over the previous year and the second largest number for online retailers of all time. The company put online sales for the four-day period from Thanksgiving through Sunday at $ 23.5 billion, up 23% year over year.
Although pedestrian traffic had decreased over the weekend, the consumers who took the trip were not there for window shopping.
Craig Johnson, president of retail research firm Customer Growth Partners, told the New York Times that retailers were seeing higher than usual in-store conversion rates and that he expects that trend to continue through Christmas.
These weekend sales do not show the significant shift in consumer buying, the time frame between third and fourth quarter sales.
The Christmas business season historically starts in November and ends in January. This year, pre-Halloween retailers have brought forward deals leading to an early purchase and a strong urge to buyers to avoid delays in shipping.
Fear and concern about the coronavirus are undoubtedly the main reason behind the accelerated move to digital this year. The discomfort and potential danger of getting packaged in malls and stores weighs heavily on consumers.
In fact, four out of five Americans surveyed by McKinsey in October said they continue to feel unsafe and have not yet returned to pre-COVID-19 comfort with “normal” activities outside the home.
For many, this discomfort overcomes the remaining distrust of online shopping and payment methods.
Consumers take advantage of the expanded range of services to get the products they need.
According to a September survey, more than 34% of consumers say they use roadside collection and 41.5% use BOPIS (buy online in-store collection) fulfillment methods. Consumers also book a time online to shop in-store without the crowds, even outside of regular business hours.
Thanks to online shopping, a new phenomenon has emerged: ROPO (online research, offline purchase) or web rooming, a strategy that is now used by 82% of consumers.
This is where a consumer begins their online shopping journey and completes the in-store purchase. ROPO refutes the longstanding theory that consumers visit retail stores to find and experience products, and then go online to buy them.
In this recent column, I featured more COVID-related digital behaviors that won’t go away in 2021.
Simply put, customers see digital and in-store as two facets of the same experience. Retail channels are merging and retailers need to capitalize on the omnichannel age by connecting the two to create a strong, holistic presence in the physical and digital environment.
Enhance your e-commerce and m-commerce strategies
US consumers are aware of their discretionary spending this year, and 84% of households plan to cut their vacation spending.
A recent survey found that 54.5% of consumers said they made fewer purchases, while 22.9% said they did not shop at all. Optimizing for the needs of online and mobile customers is essential.
Nor are consumers expecting the world to go back to normal. IBM found in September that 62% of consumers believe we are likely to see more global pandemic events.
As unpredictable emotions and events continue to influence purchasing decisions, retailers are challenged to redefine retail as an omnichannel relationship rather than a series of transactions by 2020.
When planning this holiday season and the coming year, think from your client’s point of view: What will it bring me? Consumers look for products that best suit their life and particular circumstances.
A recent survey of 1,000 US adults found that the vast majority of respondents (80%) would like retailers to personalize. Hyper-personalization solutions to meet customer needs are a top priority, and we know personalization delivers results.
Research shows that companies that use data to create in-person interactions with a large proportion of their customers get top-line results with these programs, with 20% higher customer satisfaction and 10 to 15% higher sales conversion -Achieve rate.
In addition, retailers who consistently achieve high customer satisfaction scores get three times the return on investment than retailers with low customer satisfaction scores. The remaining benefit of targeted campaigns is that marketing and distribution costs can be reduced by 10 to 20%.
Personalization is a game changer, but don’t forget the local search optimization options.
With 18% of local searches resulting in a purchase in a day, managing your local search engine optimization, your Google My Business account, updating offers, and serving mobile websites to your customers are still important today. Wherever and whenever consumers are motivated to shop, retailers need to be there.
And when traditional retailers figure out entry-level personalization techniques like coupons and preferred upsell ads, they will be left behind in accelerating innovative retail experiences like digitally-enabled stores, pop-up online stores, Facebook live shopping, and more.
As retail development accelerates, search results are critical to business intelligence
A lot of business intelligence is required to make these interactions possible. to inform the personalization and rich shopping experience that constantly connected consumers expect.
However, retailers struggle to plan a season when past trends and historical sales data cannot predict upcoming sales patterns. McKinsey recently found that 64% of consumers have changed stores, brands, and the way they shop, rendering traditional data trends unusable for retailers.
In the absence of historical data, search results have become even more important.
This is your next digital indicator of the customer’s voice. We know that companies that implement change based on data analytics can expect revenue margins to grow by between 8% and 25%.
Search data and market intelligence help retailers better understand who their customers are, how they spend money, and what matters most to them.
Source: BrightEdge Research
What do your customers tell you about their surfing behavior, search queries and behavior on site?
Customer experience and AI will drive retail success by 2021
When you feel like you are being pulled in all directions and need to be everywhere at the same time, you are not alone. The pursuit of a seamless, frictionless customer experience cannot be achieved without the ability to monitor, actively listen, and then activate search results on a large scale.
Scaling the retail industry by 2021 requires AI-powered technologies. However, having the right people available to expand your technology is critical. Retailers will surely benefit from automating repetitive tasks, but the potential of AI goes well beyond simply saving time.
AI will help retailers increase sales, improve customer loyalty and bring new products to market more successfully. In fact, a recent study identified these as the key benefits of AI-powered martech.
Consumers are also interested in the people behind the brand and what they stand for. Buyers consider brand ethics and behavior more than ever when evaluating products.
People look for brands that deliver the values they believe in and 71% of consumers prefer to buy from brands that match their values.
This requires more than a well-written About Us page. AI will be the key to communicating and creating experiences that also reflect these values.
In 2021, AI will help retailers not only deepen the customer experience, but optimize it in real time.
Retail executive teams and shareholders who gather at the boardroom table (or video call) to review their plans for 2021 should tell themselves and each other, “A retail redesign is our only way to survive.”
If this redesign means adding AI to your marketing organization for the first time this year, be sure to check out this column setting up your first AI project for success.
Jim Yu is the founder and CEO of BrightEdge, the leading platform for enterprise SEO and content performance.