The Modern Retail Landscape
Early adopters of the e-commerce model are continuing to push the frontiers of technology and erase channel boundaries. Macy's has evolved its business model such that it's fulfilling online orders from local stores rather than a central warehouse to speed delivery time. Wal-Mart has an app that shifts into in-store mode when consumers are near one of its store, enabling users to view store maps to find products more easily. And finally, Home Shopping Network has invested heavily in customer data and analytics to improve the customer experience across all of its media platforms and channels. These are just a few examples of innovation already taking place, while other retailers are exploring the cutting edge of technology with iBeacon and Bitcoin.
Retail is notorious for thin margins, so it's clear that these companies have made difficult tradeoffs in order to invest in the areas that support and add to the growth of e-commerce. It's a wise choice as we're seeing more e-commerce efficiencies and benefits spill over and start to transform traditional brick-and-mortar operations. The net result is an improved experience for consumers, which builds brand loyalty and the likelihood of repeat business.
III. Shopping Goes Mobile and Millennial
Shoppers on mobile devices in the U.S compose 55 percent of the time spent on e-commerce sites. As mobile device ownership grows, smartphones and tablets are fueling the double-digit growth of e-commerce. With over 42 million U.S. consumers owning smartphones and 69 million owning tablets, it's also changing the way people shop in stores. When surveyed by Forrester Research, retailers named mobile as their top investment area in 2014.
The mobile wave is also impacting retail hiring, with many of the "new jobs" such as email marketing and search having a direct impact on mobile. And who uses all of those mobile devices to shop? Millennials — i.e., people born between 1982 and 2004. They are over 80 million strong and most likely to use the latest technology offered by retailers. A recent study by the National Retail Federation found that of millennials who used their smartphone to shop, they did so for the following reasons:
- 46 percent requested a price match;
- 50 percent used it to cash in on a discount or promotion;
- 69 percent referred to product reviews; and
- 44 percent scanned a QR code for more information.
Millennials outranked every other age group in these categories by a ratio as high as two to one. Keep in mind that many in this generation have never known a life without smartphones or e-commerce, and you begin to get a sense of where the retail winds of change are blowing.
IV. Navigating the New Frontier of Retail
It's easy to get lost in this strange, new landscape where consumers are pulling brands in every direction. In the midst of this chaos, here are a few key pieces of advice:
- In the rush to evolve, stay grounded on who your customer is and what your brand stands for. The most innovative retailers evolve, yet stay within their core competence. Knowing yourself and your customer will help you to prioritize and focus investments on those areas that address your shoppers’ needs but do it in a way that stays true to your brand ethos.
- Use your e-commerce site to power all paths to purchase. Shoppers expect the same experience from your website as they do in your store. If your product catalog is larger online, empower in-store employees and shoppers to use your website to their benefit while in-store.
- Write new job descriptions and hire from outside your industry. There are skills that you need that you don't have in-house. When it comes to e-commerce and web infrastructure, look beyond the traditional retail resume, especially for email marketing, data analytics, web development and the like.
- Incremental change is still change. Try new things. For example, if your typical buyer isn't a millennial, does that mean you should never try social marketing on Pinterest or Facebook? Probably not. Millennials are a tremendous technology bridge to older generations. That project you start today may just be the best thing you do next year.
I once heard Jason Ross, CEO of JackThreads, speak at a conference. He said the No. 1 thing JackThreads tries to do is instill a sense of trust in its customer relationships. Well, that's exactly what my son experienced with the brand. This type of personalized interaction is incredibly helpful while also setting the bar for any other brand with whom my son decides to do business with. There's a reason that JackThreads is his "favorite" brand. The retail world is fiercer than ever. Get ready for the next generation of retail; it's already started and it promises to be a wild ride.
Marti Tedesco is the senior director of corporate marketing at Baynote, a provider of software solutions for retailers.