Consumers no longer have to get in their cars, drive to multiple stores and spend all day running errands – which wasn’t the case a few short years ago.
Now, with a few clicks of a mouse or taps of a finger, that all-day event has been whittled down to maybe an hour.
The point is that the retail industry has reached a tipping point, thanks to the rise of e-commerce, rapid development of digital technologies, increasingly high consumer expectations and an economy in transition.
This perfect storm has transformed shopper behavior and has serious implications for the retail industry, both now and in the future.
Top Disruptive Technologies
Technology has not only caused a shift in the behavior and attitudes of consumers, but it’s also profoundly influencing and molding the shopping environment.
The technologies that are causing the most disruption include:
1. Digital/Omni-Channel Retailing: Digital has been by far one of the principal disruptions to hit the retail industry due to heightened levels of connectivity, continued advancement of capabilities and introduction of new business models.
Consumers’ increasing level of comfort with shopping online is driving the growth of omni-channel retailing – which is about integrating traditional and digital shopping channels to create a seamless experience for the connected customer.
While digital does not remove the need for brick and mortar stores entirely, retailers will need to determine how to marry digital and physical worlds to create a compelling in-store experience.
And as more product categories move online, retail real estate portfolios will shrink and the physical store will become smaller, making future real estate decisions even more critical.
2. Social Mobile Local (SoMoLo): The proliferation of embedded sensors in smartphones is enabling the interaction and combination of location-based information, social media and social commerce.
- Social Media: Social media has and will continue to affect the way customers interact with brands and products. Shopper reviews, for instance, are believed to be more truthful than sales associates. As a result, social media is developing into social commerce as seen by the emergence of location-based targeting through platforms like Foursquare and Facebook.
- Mobile: The penetration of smartphones and tablets has enabled consumers to have access to online shopping virtually anywhere. Roughly 80% of shoppers use mobile devices in-store to research products and prices before making any purchase decision.
- Local: Three-quarters of smartphone users access their phone’s location-based services. Furthermore, in exchange for relevant promotions from their favorite brands, 80% of consumers will share their location information.
3. Click and Collect/Delivery: Click and collect services are further driving the expansion of omni-channel retailing. Consumers are able to order products online and then either pick it up in-stores or have it delivered to their homes. By 2018, click and collect will make up 8% of online sales.
Stay Ahead of the Curve
The way consumers shop is changing radically and as a result the approaches retailers take to communicate with them need to evolve as well.
Because individual consumers want and expect different things from all channels, whether that be physical stores or marketing messages, success comes down to knowing who the customer is.
The customer analytics that Buxton provides are based on detailed customer profiles that offer retailers a wealth of knowledge not only regarding demographics/psychographics, but also where they live, how far they’re willing to drive to any given location and their digital behaviors – information that allows retailers to better meet customer needs.
This presents vast opportunities and virtually eliminates guesswork when scouting new potential store locations and integrating marketing and e-commerce strategies.
The Bottom Line
Retailers who stay ahead of the curve will use analytics to put the customer at the center of a constantly evolving business strategy.