The way we shop is changing, so it’s only natural that retailers would change their approach to fit consumer demands. According to Worldpay, omnichannel shoppers spend between 50 percent to 300 percent more than single-channel shoppers. However, the tactics online retailers are adopting are surprisingly similar. In fact, they’re starting to act a little more like a shop in a mall.
Along with price comparisons, instant gratification is a key difference between shopping in-store and online. If you walk into a store, you can buy and leave with your purchase on the spot. Shoppers are now demanding the same speedy delivery for online purchases, meaning retailers have had to adopt a more seamless, hybrid approach to create a consistent experience across in-store and online. This means they can react quickly to trends and consumer preferences. However, with increasing concerns about cyberattacks and the amount of sensitive data many large retailers store, they must strike a careful balance between providing value-added and personalized shopping experiences while also respecting customers’ privacy.
For the past couple of years, one company has dominated the omnichannel agenda: Amazon.com. The retailer recognizes why customers come to it — they want both choice in variety of selection and competitive pricing. Amazon's dominant marketplace is online, but its first physical bookstore opened in 2015, and three more flagship bookstores were announced last year. In addition, Amazon recently acquired Whole Foods. Furthermore, Amazon Go, which launched in December 2016, is a recent innovation featuring a checkout-free in-store shopping experience. The store design captures the convenience of online shopping, leveraging mobile and in-store video technology, with the benefits of in-store purchasing. Amazon Go has created a seamless buying experience where payments are automatically deducted from the customer’s Amazon account.
Multichannel services like these are the future of retail. At CES earlier this year, we saw delivery drones, robots on wheels that can escort your takeout from the restaurant to your front door, and an augmented reality (AR) offering that lets customers take a virtual tour of cars using their phones. However, the improvements in experience come with unique challenges. When your customers can originate from anywhere, how do you identify them, serve them and keep their data safe?
The retailers that will succeed are those that can offer a new, exciting and seamless shopping experience across every channel, offering personalized experiences while ensuring data security.
With shoppers having so much choice, retailers need a way to stand out from the crowd. Tailored offers that match individual’s buying habits, through a well-targeted, personalized retail experience can make all the difference — especially if they're delivered via their mobile device. An iVend survey from 2016 found that 26 percent of shoppers would like personalized offers based on profile data, purchase history and inferred interest (e.g., complementary or previously purchased items) sent directly to their phones when they’re in a brick-and-mortar store. Ninety-four percent were more likely to save offers and coupons if they were delivered directly to their mobile wallet.
The demand for targeted deals will almost surely continue over the next couple of years, but retailers need to make sure their targeted offers engage their customers and respect their privacy, rather than annoy them. There needs to be a careful balance between personalization and invasiveness.
Consumers want retailers to be transparent. They're ready to opt in to personalized news and deals from their favorite brands, but they also know that their data is very valuable. Sixty-six percent of consumers are happy to share their data in exchange for better services or access to products, but retailers need to be responsible and not take advantage of trusting consumers. If shoppers find out that brands have tracked their movements or used their personal information in any way without explicit permission, they’ll simply shop elsewhere and, in the world of online reviews, report the retailer’s actions to their families, peer groups and other influencers.
An approach that combines transparency, security and privacy is key. Retailers should offer consumers the ability to control, via profile settings, what data is collected, with whom it's shared as well as the security measures in place to protect it.
The Mobile Connection
Mobile technology is the not-so-secret weapon for retailers to transform a shopping experience. As a platform, mobile can grab and maintain shoppers’ attention on-the-go as well as offer location-specific information and deals. Most importantly, mobile can help retailers keep secure customer data.
Mobile authentication services give customers an additional layer of control over what information they disclose with retailers by prompting for explicit consent. Retailers can use data from the mobile operator to confirm their customer’s identity, maintaining their privacy while giving more options for personalization — but only if the customer explicitly opts in. For example, if a customer agrees to share their date of birth with the retailer, they might receive relevant offers to their age demographic or special promotions like birthday savings discounts. As customers can access the service through their phone, the service is a convenient, easy way to authenticate themselves.
By embracing mobile authentication, retailers can gain a huge advantage in today’s competitive marketplace. It doesn’t have to be at the cost of privacy either. By offering mobile authentication services, retailers can prove they take their customers’ privacy seriously. Shoppers can feel safe in the knowledge that the retailer is taking steps to protect their data, while providing a seamless way to interact with in-store technologies like geo-location. Retailers that adopt omnichannel in a secure way will be rewarded by more engaged, loyal customers.
Ana Tavares is the head of North America at GSMA, a trade association that represents the interests of mobile operators worldwide.