5 Retail Tactics for Managing Explosive Growth in Digital
According to Cisco, shoppers now have over 800 possible purchasing journeys to choose from. And that doesn’t even include wearables and other emerging digital channels. All this leaves two choices: create more than 800 different personalized experiences for each shopper, or find smarter ways to manage this growing problem.
If you opted for the latter, good for you! That said, here are my top 5 retail tactics for managing explosive growth in digital…
1) Don’t Go After the “Bright & Shiny”
It’s natural to want to gravitate towards all the buzz, but “bright and shiny” can be a dangerous approach to digital. QVC CEO, Mike George, gives us some real-world perspective: “We thought mobile would just be a cool factor. We couldn’t imagine that anyone wanted to engage in the QVC experience on this little screen.” George then went on to explain that as a result QVC’s mobile conversion turned out to be “terrible”.
The truth is, not every new digital channel will be right for your brand. The key is to start by understanding your consumers’ path to purchase and how they’re interacting with your brand. This will show you which new digital channels make the most sense to explore. Once QVC went back and did this, mobile grew to take on 41% of QVC’s $3.5 billion in ecommerce revenue.
Tip: Some quick path to purchase research is a great way to really understand consumer behavior, see which channels / touch points they’re interacting with and discover what interactions have the biggest influence on purchasing.
2) Don’t Treat Every New Channel the Same
When marketers hatched the omnichannel strategy, the goal was to keep consumers shopping, from channel to channel. And, while the concept was a definite step in the right direction, it’s translation ended in something very different. For the most part, we started by jumping to replicate each digital channel everywhere, failing to identify the unique “why, how and wow” of these digital channels for our consumers, that is:
- Why this channel is relevant and impacts consumers positively,
- How it helps move them along their path and eliminates friction,
- What the unique “wow” is that cannot be easily replicated on other channels and can be used to amplify the incredible in their experience
Online pure-play, Bonobos offers a great example of finding the unique value of each channel. Bonobos decided to officially open its first store in 2011: a clothing showroom if you may—a place where customers could try on clothes and then order them online, for home delivery later. And, while physical and digital channels don’t all deliver the same exact functions and experiences here, guess what? In 2011, their first store was doing about $1 million in sales annually—roughly 7% of the company’s overall revenue. Today, there are 17 Bonobos stores (with 3 more to come this year) and they account for somewhere around 20% of the company’s estimated $100 million in annual revenue—the sales per square foot yardstick, typically used to measure retail performance, is the highest in their category (Inc).
3) Stop Holding Every Channel to the Same KPIs
This tactic naturally follows from our last. If you believe we need to maximize the unique value of each channel for consumers, then you’ll also believe that the best way to optimize them is to measure them according their unique goals.
4) Adopt Omni-Pricing & Return Policies
Let’s face it. Today’s consumers will shop when, where and how they please. And, separate pricing strategies won’t keep them loyal. If anything it may only push them further away. (I know Old Navy is definitely on my blacklist… they’re pricing and return policies are a mess!) Besides, how will you continue to manage all these different strategies as things start to get even more complicated? According to ABI Research, by 2020 the number of devices connected to the Internet is expected to exceed 40 billion.
It’s also critical to remember that the post-purchase experience is just as important as the pre-purchase and actual purchase experience. Items, no matter their point of purchase, should be returned as easily in store as via mail. Otherwise, you’ll be leaving that frustrated customer with a poor last impression of your brand.
All in all, it’s critical that you start working on your backend infrastructure right now to make these omni-pricing and return policies a reality, so that you can get in front of change and not risk falling behind.
5) Don’t Forget Digital’s Bigger Picture
According to Deloitte, digital interactions impact 50 cents of every dollar of in-store sales. But, we know that over 91 percent of all retail sales in the U.S. are spent inside brick-and-mortar stores (U.S. Census Bureau). So, it’s not all about pouring your investments into digital channels and digital advertising. The biggest opportunity with digital is the opportunity to further align online and traditional channels and get extremely accurate analytics into marketing performance and consumer behavior not just online, but in store as well. With this missing information, a real 360 view of the customer will finally be a reality, along with more unified digital and physical channels and increased ability to determine a high-performing marketing mix for your brand, including which digital channels will have the most ROI.
Moving forward, digital should never lead your strategy. Instead, it’s important to start by understanding your consumer’s path to purchase, their customer experience pain points and how they’re using digital tools during their journey. Then, work backwards to define what and how digital would be the most scalable with changing technology and the most beneficial for your unique brand and consumers. “Smarter” brick-and-mortar retailing will likely become a big part of this kind of customer understanding, as it will be critical in taming an explosion of consumer technology and decrypting a seriously complicated path to purchase.
Image Copyright: mackoflower / 123RF Stock Photo
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