The retail landscape continues to change in dramatic ways, and retailers that want to stay relevant must evolve quickly. For guidance, just look back at the course of the past year to how shoppers’ expectations and engagement preferences are transforming.
In March 2018, retail sales totaled $494.6 billion, according to the U.S. Census Bureau. This was a 0.6 percent increase from the month prior, and a 4.5 percent increase from March 2017, reflecting an continued and steady sales momentum for the retail industry. The National Retail Federation also predicts a strong year for online sales, forecasting a growth of between 10 percent and 12 percent for online and other non-store purchases.
The New Normal
Driven by millennials, it's clear that a thoughtful and full-bodied strategy is critical for success. Increasingly, consumers want to shop when, where and how they want to. For the near term, the biggest opportunity for brick-and-mortar retailers is to understand and deploy mobile device strategies. More than two-thirds of shoppers now use their mobile devices to help make purchase decisions. Furthermore, Statistica found that the majority of consumers now prefer to purchase digitally in a number of product categories, including entertainment, toys and games, and books. The more integrated this understanding of customer behavior is throughout your in-store and online marketing strategy, the better off you’ll be.
For example, last year’s Black Friday/Thanksgiving weekend sales hit record highs: $14 billon total combined with a record $6.59 billion in sales on Cyber Monday (nearly 17 percent more than 2016). More than half the sales were transacted via a mobile device. On Cyber Monday alone, more than $2 billion worth of sales were transacted through mobile devices.
IoT Will Take Center Stage
The Internet of Things (IoT) will be a primary force behind retail innovation, and while mobile payment solutions are becoming the norm, purchasing is only the beginning. In fact, 37 percent of survey respondents believe IoT is the emerging tech that will have the greatest impact on the retail industry in 2018. Think about tablet-wielding sales associates, mobile shopping apps with in-store features, mobile-connected digital signage, and even smart beauty kiosks. Nearly 60 percent of shoppers look up product info and prices using their mobile phones in stores, and digital interactions now influence 56 percent of every dollar spent in brick-and-mortar stores, according to Deloitte Consulting.
As mobile payments and other technology-enhanced activities become more commonplace, shoppers may have less patience for brands that hesitate to modernize the shopping experience. They will quickly come to expect that when they walk into a store, associates will already have information on their preferences and pick up where the online engagement left off rather than starting over.
The definition of a great customer experience is rapidly and radically transforming. A traditional retailer might interact with a customer six to eight times a year — mostly in a transactional manner. Contrast this with the kind of relationship, trust and understanding of preferences and purchase intent that a digital platform like Pinterest can create when it interacts with that same customer for several hours a day.
Behavioral analytics will become more important to informing differentiated and loyalty-building customer experience development. In 2017, retailers were focused on breaking down silos to build a holistic view of the customer experience through every stage of the buyer journey. And now more than ever before, more granular data can be collected both in-store and online with mobile devices. This information can be deployed to create powerful and nuanced engagement that meets shoppers where they are, both physically as well as in the sales journey.
It’s Not Just Retailers
Manufacturers and OEMs have an important role to play, too. It's critical that they protect, equip and enable the channel by delivering programs and assets to ensure a consistently high-quality experience. In an era where anyone can resell a product from their kitchen table, manufacturers need to do their part to safeguard healthy channels from diluted, even fraudulent activity.
It's clear from the data that retailers are at an inflection point. A robust online and in-store strategy underpinned by mobile device usage, IoT utilization, and a focus on using data to create engaging, differentiated experiences along the customer journey are all critical to long-term success.
Stephanie Dismore is vice president and general manager, Americas Channels, HP Inc.
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Stephanie Dismore is vice president and general manager, Americas Channels, at HP Inc. In this role, Dismore is responsible for leading and managing all aspects of HP’s commercial and consumer channel sales in the U.S., spanning distribution, national solution providers, regional VARs, public sector, and SMB partners in the commercial channel, as well as retail partners in consumer electronics, office product super stores, regional retails, e-tail and specialty channels. Dismore is also responsible for overseeing all channel-related partner planning, development and programs for the Americas region.