There’s no question about it, retail is undergoing a dynamic transformation. The constant flux among all the channels is forcing retailers to sharpen their sales and marketing strategies, especially as they approach Black Friday and Cyber Monday.
Digital sales, which includes online and mobile, are clearly the bright spots in retail. Cyber Monday 2016 claimed the title for the largest online sales day in U.S. history, with $3.39 billion in online sales. Black Friday came in a very close second with $3.34 billion in online sales, driving a record $1.2 billion in mobile revenue. All signs point to even better digital sales during this year’s holiday season.
While retail sales overall are rising, the message is somewhat mixed for brick-and-mortar retail. According to retail think tank Fung Global Retail and Technology, more than 5,700 store closures have been announced by September 1, 2017. That’s a 181% increase over 2016. Yet IHL’s research report estimates that retailers will open 4,080 more stores in 2017 than they are closing and plan to open over 5,500 more in 2018.
So, what do retailers need to do as they head into this year’s holiday season? How should they fine-tune sales and marketing to ensure they hit all the right notes? Start by tracking and analyzing customer data and then adjust accordingly, with special attention to an omnichannel strategy that doesn’t sacrifice any individual channel or any individual customer. And speaking of the individual customer, invest some time and effort in personalization as you fine-tune your sales marketing strategies.
All About the Omnichannel
To navigate these shifts and contradictions, retailers are leveraging new services, technologies and targeted marketing efforts to power the omnichannel, a multi-channel approach that blurs the lines between in-store, online, mobile and even catalogs into an integrated and cohesive experience. That’s because omnichannel retail is where the money is. According to a report from eMarketer, 59% of retailers said omnichannel customers were more profitable in 2016 than single-channel customers, vs. 48% in 2015.
Amazon recently expanded its omnichannel footprint by launching its own clothing line, complete with Prime Wardrobe which lets users try before they buy. It also acquired Whole Foods and opened a handful of Amazon retail bookstores. In addition, the company is scooping up warehouse space in urban areas around the country so it can offer same-day delivery to customers who purchase via online and mobile channels.
The retailer’s Amazon Prime Day sales event has been wildly successful. This year, Amazon Prime Day was touted as the company’s biggest sales day ever, growing 60% from 2016 and surpassing Amazon’s 2016 Black Friday and Cyber Monday sales. And Amazon is doing a great job targeting their branded items, considering most of items sold on Prime Day were Amazon’s branded products. Need more evidence? According to research from Slice Intelligence, 43% of all online retail sales in the United States went through Amazon in 2016. With these new product expansions Amazon is looking to secure an even larger piece of the retail pie, possibly up to 50% market share by 2021, according to Wall Street firm Needham.
Meanwhile Walmart, with more than 5,000 stores, has been building out its online presence. While it may be a bit behind Amazon in omnichannel expansion, the retailer’s recent purchase of Jet.com, along with its acquisition of smaller online retailers ModCloth, Bonobos and Moosejaw, has led to major online sales growth. To further compete with Amazon’s foray into the grocery space, Walmart now offers online grocery ordering and pick up, and just announced a partnership with Google in early September to further encroach on Amazon’s market share. In May, Walmart announced a 63% growth in quarterly e-commerce sales.
A key trend in retail right now – and one that already delivers real results – is personalization. Plenty of retailers are already using personalization, and some have for several years. Research indicates personalization has strong impact. In fact, a recent study from Infosys found that 86% of consumers said personalization has at least some impact on the purchasing decision Tweet This!, and that nearly one-third of consumers wanted more personalization in their shopping experiences.
New services and apps are infusing innovative personalized shopping and buying experiences, as well. There’s Nordstrom’s Trunk Club, one of the many new services that rely on subscription models and use stylists to pick out clothes based on a customer’s preferences, then mail a selection of curated outfits directly to the client. Others include StitchFix, MM.LaFleur and Fabletics. There are also apps like The Hunt. By posting a photo of an item that you are looking for, along with specific requirements such as budget and size, the Hunt community networks to suggest products. Keep, another app, provides a web-wide shopping cart called the Keep One Cart so shoppers can buy any product from any store, anywhere, in one seamless checkout experience. All of these services and apps speak to consumers’ desire for more personalized shopping experiences, and retailers need to ensure they’re delivering to meet that desire.
Measure for Measure
In order to compete in today’s shifting retail landscape, companies must not only know and understand their customers but also meticulously measure all channels of their sales and marketing campaigns to improve target marketing, distribution and ultimately revenue.
Of course, most consumers fight advertising. They look for ways to avoid it and tune it out, so marketers must adapt and be creative to give consumers the personalized information they’re looking for. Today’s best media engagements track all of the touch points and interactions with consumers in order to facilitate a personalized interaction between the brand and the customer.
Not only do customers want personalized customer experiences, they also want a consistent retail experience across digital and brick and mortar. And with a consistent experience, for example, retailers are better prepared for showrooming and webrooming.
To deliver personalized and consistent experiences in the omnichannel, you need to understand your target customers. The best way to do that is to analyze customer data. Of course, for many retailers, sifting through the hordes of data collected via point-of-sale systems and online channels can be overwhelming. Even more challenging is integrating customer data across the different channels for a more holistic picture, especially since many organizations still operate their channels in silos.
One way to overcome these challenges is to work with a partner that has expertise rooted in data and analytics and who is equipped to discern critical information and better understand the story that the data is telling. A few words of advice when picking a partner to work with: look for firms that invest in and use robust analytics, and that track data from a number of sources in order to make clear connections to a campaign’s ROI.
With data-driven marketing and a more complete picture of your target customer, you’ll be able to ensure each touchpoint is part of a cohesive and customized omnichannel shopping experience come Black Friday and Cyber Monday. It won’t matter if the customer is shopping for that perfect holiday gift at a store in the local mall, leafing through the catalog that just arrived in the mail, or scrolling through products on a mobile phone. What matters is the buy.
Carroll leveraged Personify's Small World Community to build an online community with powerful gamification, personalization and reporting to support engagement and measured results, and this has translated to a 30% increase in yield rate for the 2018 semester.