2019 was a lackluster year for many brands; in the U.S. alone, more than 9,000 stores closed, nearly doubling the number of store openings and far surpassing the number of closures the year prior. While retailers around the world felt the pressure to adapt to a rapidly changing landscape, there were bright moments that showed retailers a yellow-brick road leading toward the future of retail.
Globally, the sector has grown at about 4.5 percent annually over the past decade. However, the growth is vastly uneven across the industry’s subsectors and ultimately only covers up deeper problems — including falling productivity, higher costs, and a competitive discount mentality that has limited both growth and profitability.
In 2020 and beyond, retailers can count on one thing — the consumer will remain king. And as their preferences continue to shift, brands will need to rethink their retail strategies. Retailers need to be prepared for the speed and scale at which these changes will take place, and have a plan for adapting.
While new technologies and the latest trends can be an important part of satisfying shoppers’ needs, it’s just as important to refine the fundamentals. In an effort to better understand the key trends reshaping consumer expectations in 2020, a recent report from BJSS aims to explain how retailers can improve the way they engage with their customers both in-store, online and across blended channels as a foundation for successful retail.
Social activism is becoming increasingly important to customers. Younger consumers, especially Gen Z, are paying attention to how brands present themselves and take action for social causes that are important to them. A shopper that strongly believes in environmental activism may align with — and consequently, purchase from — Patagonia, a brand that donates profits to environmental organizations and promotes sustainability. Others may shop from companies that support the same political values, work to better education, or promote diversity and inclusion.
Improving consumer engagement goes beyond just taking a stand; eventually, evaluating customer service must come into play. Artificial intelligence (AI) is revolutionizing not only the way consumers interact with brands, but the way they shop. Voice commerce, even in its early stages of adoption, is offering unmatched convenience for shoppers. Retailers are using AI algorithms and customer data to predict which products shoppers are looking for and when they’ll need them. When companies can better forecast inventory and outward product flow, they can increase their internal efficiency and expedite supply chain operations.
When determining how to add value for an audience, retailers can turn to personalization. In tandem with using customer data for inventory purposes, brands have the opportunity to use that data to understand customer wants, needs and behaviors, even before customers know they want something themselves. Therefore, using these behaviors as insights can create meaningful, actionable strategy — and establish another touchpoint to engage with the target audience.
Although the least tangible, the final aspect is perhaps most important: emotional connections. No matter which channel a brand is using to reach its customers, creating an emotional connection means establishing trust — in both the service and the product — which is becoming increasingly difficult to ensure in an ever-crowded market.
Together, these tactics can really determine which retailers are going to thrive in today’s market.
Jake Knowles is a senior retail consultant at IT and business consultancy BJSS.
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June 21, 2020 at 09:40PM
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Why Customer Engagement is Key to Retail Strategy - Total Retail
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