Today’s retail experience looks a little different than it did three months ago. Despite a decrease in foot traffic, online sales have surged 146 percent, and 72 percent of consumers are using their mobile device to shop online. As retailers scramble to adjust their strategy to be more focused on e-commerce while improving the customer experience, they should focus on three core tactics — now and post-pandemic — to continue generating revenue while meeting the changing needs of consumers.
Adopt an Omnichannel Approach
An omnichannel approach is the targeting of consumers across all digital channels, such as websites, social media and email. It's important to target consumers with a consistent, relevant message based on an individual customer's shopping habits and interests. Retailers that implement this approach can use data and analytics to target consumers with a specific message that aligns with their intent and their position in the customer journey.
For example, a customer adds a piece of furniture to their cart but leaves without completing the purchase. The furniture retailer can send an email with a $100 off coupon on the same item to encourage the consumer to complete the purchase. If that still doesn’t work, retailers can leverage a social media advertising strategy to target the consumer with an additional coupon on platforms such as Facebook or Instagram. As the demand for e-commerce continues to rise and shopping habits change nearly by the day, it's essential retailers have a 360-degree view into their digital presence to drive sales while improving the customer experience.
Offer Warranty Solutions
The pandemic is not only causing an increase in online purchases (online sales have jumped 49 percent, BOPIS transactions have grown 208 percent during the coronavirus pandemic), but it's also causing most consumers to be thoughtful of their disposable income. As such, there's a heightened sensitivity toward large purchases. The larger and more expensive the product, the more likely consumers purchase a service contract. For instance, 54 percent of consumers purchased a service contract for exercise equipment they purchased in the past year.
Additionally, the price consumers pay doesn’t stop at the item itself. Repair costs can quickly add up, too. A refrigerator, for example, could cost as much as $400 to repair, and the average cost to repair a piece of furniture can be anywhere from $150 to $400.
Consumers who spend hundreds if not thousands of dollars on large items look for that added peace of mind at the point of purchase and beyond. It’s up to retailers to position service contracts throughout the online shopping experience, and even post-purchase using direct mail and re-marketing for added value. In doing so, consumers build confidence that the retailer is looking out for their best interest — now and in the future.
Leverage Artificial Intelligence
Gartner research shows that 77 percent of retailers plan to deploy artificial intelligence (AI) by 2021. With AI, retailers can offer a more personalized experience by predicting buyer behavior, deliver a custom message when customers are "in market" for a product, and analyze data to inform future marketing campaigns.
AI can be used to better manage inventory and predict when to restock certain products based on consumer demand. Walmart, for example, is using AI to predict when to restock shelves, a tactic that is especially important today as inventory is being scooped up more quickly. (Toilet paper, anyone?) Sensors alert associates when items are out of stock, allowing them to quickly refill as needed. More specifically, it can give exact details of the item, such as one pound of meat vs. two pounds, and predict how much more stock will be needed based on recent aggregated purchasing trends. Using AI, Walmart can better manage inventory, save money in the long run, and improve the overall customer experience.
Even in a global pandemic, retailers can implement these three strategies to stay ahead and adjust to the ever-changing shopping environment — allowing consumers to worry less and experience more.
Steve Davidson is vice president of Fortegra’s Warranty Product Group, where he spearheads business development and client support for the company’s consumer and commercial product service contracts, helping deliver customized risk management, regulatory compliance, and administrative solutions.
Steve Davidson is vice president of Fortegra’s Warranty Product Group, where he spearheads business development and client support for the company’s consumer and commercial product service contracts, helping deliver customized risk management, regulatory compliance, and administrative solutions. A graduate of Eastern Illinois University with more than 25 years of industry experience, Steve has played a critical role in growing Fortegra’s warranty business, advancing the company’s service offerings through retail and commercial distribution channels.