With vaccinated consumers returning to stores, retailers are looking to this summer and fall as a chance to regain momentum before the crucial holiday season. In June, the retail industry got a peek into what’s ahead with Amazon.com's Prime Day, the annual sales extravaganza put on by the U.S.’s largest e-commerce player with competition from other major merchants such as Kohl’s, Target, Best Buy, Walmart, and The Home Depot. Amazon’s deals represented smaller discounts compared to Prime Days of past years due to unusually low inventory levels and higher supply chain costs.
So if smaller discounts are the new Prime, how will Amazon (and retailers facing the same challenges) build loyalty and recoup return on investment on their advertising and promotional efforts? Here are two of our Prime Day-inspired takeaways:
Mobile CX Remains Critical
Brands have been ramping up their efforts during COVID to retain their loyal customers, which can be a challenge as direct-to-consumer (D-to-C) motions and digital channels such as Instagram, Facebook, and TikTok provide a plethora of options and new experiences. Prime Day, which has become akin to “a summertime Black Friday,” should remind retailers that extravagant, margin-depleting sales quickly fade in importance to sustained experiences that offer personally relevant content and convenient services.
For the remainder of the year (including the next Prime Day), brands should focus on converting discounts into direct digital customer connections that will enable them to better understand and serve individuals’ needs for the long haul. And for many, the timing couldn't be better — and also more urgent. Amazon is now no longer known for always being the most affordable option, and shipping delays, frustrating returns, and even opaque guidance on third-party sellers have detracted from its customer experience (CX). Amazon also has increasing brick-and-mortar aspirations, reportedly planning to have 3,000 self-service stores open by the end of 2021.
When it comes to CX, consumers care about questions such as which app is the best. And which digital CX is the easiest, or even bordering on magical in the way it seamlessly connects to in-store experiences? The answers increasingly drive brand loyalty.
Retailers can draw inspiration from a recent Forrester report, which states: “Growing fulfillment choices for online orders, including curbside pickup and same-day delivery, have added new features and friction points into the digital checkout flow. Best-in-class retailers continually optimize their checkout paths to reduce friction points. Attention to detail (think predictive search, comparison tools, and minimal-screen checkout) is essential beyond the short-term retail strategy to meet ever-rising customer expectations.” (Forrester Research, Inc., The Forrester Digital Experience Review™: US Retail Mobile Apps, Q1 2021, March 24, 2021. Note: A complimentary copy of this report is available here until 9/22/21.)
Lean Into Emerging Best Practices and Test, Test, Test
Whether it’s Amazon or any other brand, retail marketers have to evolve and learn how to sustain customers acquired during bigger shopping events like Prime Day to generate greater business value. They need to do all of that while continuing to push the envelope and think more creatively about how to beat competitors and make themselves more attractive.
Brands need to lean into best practices that are out there for mobile experiences, including shopping features, payment options, and utilizing first- and zero-party data for customer segmentation and relevant real-time messaging. For instance, The Home Depot app’s in-store mode includes a store map that specifies the bay number and stock status of items in a shopping list or search result. New experiential loyalty benefits enable The Home Depot’s “Pro” customers to rent tools on credit, knowing they may not have all the tools needed for every job.
As another example, American Eagle Outfitters quickly launched curbside and in-store pickup ordering options as stores began to reopen from pandemic-related shutdowns; however, there were many operational challenges, especially as many of the retailer's stores are located inside malls. By adding trip-tracking for curbside and order-ahead features, AEO was able to remove friction for both customers and store associates. And then there’s Brookshire Grocery Company, a chain with 180-plus supermarkets, pharmacies, and other stores in the American Southwest, which allows customers to opt into its wine and beer text clubs for targeted messaging, and employs experimentation to find out which content creates the greatest engagement.
Look for more brands to continue not only leaning into SMS and making their programs smarter with A/B and multivariate testing, but leveraging each touchpoint to gain additional opt-in connections that strengthen their bond with customers. After all, as smartphone-toting consumers head back into stores this summer, fall and into the holidays, mobile CX will likely be a primary battleground for retail brands.
Mike Herrick is senior vice president of technology at Airship, the No. 1 customer engagement platform for enterprise brands.