On one hand, retail sales in America are rising year over year — bolstered by a thriving U.S. economy and multi-channel sales. On the other hand, the marketplace for every niche imaginable has become increasingly competitive over time. Finding success in what some call a cutthroat sales landscape requires retailers to understand their customers deeply, facilitate seamless shopping experiences and offer more responsive messaging than ever before.
Here are three current challenges in retail and how companies can go about facing them.
Increased Demand for Personalization
There’s simply no room for one-size-fits-all approaches to marketing, sales and customer service. Even a one-size-fits-many mentality falls short. The fact of the matter is that customers are demanding increasingly personalized experiences and interactions with brands. Further, personalization today goes far beyond inserting a customer’s name into an email subject line.
As Retail Dive cites, 63 percent of consumers say they’re interested in getting personalized product recommendations from brands. A majority of those surveyed said they’re willing to share their usage data in exchange for personalized offers on items of particular interest to them and special coupons or loyalty points. This is good news for retailers who can use that data to increase the relevancy of these interactions.
Personalization can take many forms, from individualized product recommendations based on past buying behavior to offering category-specific coupons by demographic. The ability to segment customers more granularly is a must for retailers hoping to build relationships with shoppers in this day and age.
Data Silos Create Confusion
The good news is more data is available than ever before. As we mentioned above, customers are often willing to share their data with retailers in exchange for improved service. However, the challenge remains for retailers to turn this data into actionable insights that drive better business outcomes.
Siloed data hinders data-driven decision making. If marketing, sales and operational teams are all looking at different sources of truth the company will lack a cohesive direction. Departments may step on each other’s’ toes, make redundant decisions or let important insights slip through the cracks. This is why advanced retail analytics create a single source of truth, de-siloing data so everyone has access to the same information.
Bridging the Gap Between Digital & Physical
First there was physical retail. Then e-commerce entered the picture. But it is increasingly evident just how many customers are seeking out multi-channel experiences, using online and in-store experiences to complement each other. This means merchants must bridge the gap between the digital and physical, smoothing out the entire customer journey from start to finish.
Here’s an example of a fairly typical customer journey from start to finish from Shopify:
1. Sam discovers a new product through social media or a display ad.
2. Sam conducts product, category and/or local searches to compare options.
3. Sam conducts brand-related searches and looks up reviews.
4. Sam visits the brand website and may even sign up for email updates.
5. Finally Sam makes a purchase through an e-commerce site or in store.
This example demonstrates how multiple touch-points must work in harmony to capture sales: social media, marketing, e-commerce and brick-and-mortar sales.
Harnessing the power of multi-channel retail also requires retailers to make sure inventory and demand forecasting is in sync for all their touchpoints, both digital and physical. Understanding how customers behave is the foundation for anticipating their wants and needs across channels.
Retailers able to personalize the customer experience, de-silo data for better decision making and provide a smooth multi-channel buying journey will pull ahead of the competition.