For some, the process of evaluating how consumers think and shop relies on the expertise of both Bazaarvoice and Forrester Research. According to the former, more than 700 million shoppers view and share authentic opinions, questions, and experiences about tens of millions of products each month. Meanwhile, Forrester’s methodology assesses the most significant vendors in “the social depth marketing space” on current offering, strategy, and market presence.
In the report The Future Is Here: The Top 5 Consumer-Driven Trends in Retail, Bazaarvoice shares those findings. The trend in shopping online has not slowed over the past several years, and was estimated to reach $327 billion by the end of 2016 (up from $202 billion in 2011).
Not only have brick-and-mortar stores had to step up their online selling, but the amount of Internet-only e-tailers has been growing exponentially. What has thrown a new wrinkle into the mix is the importance of social marketing (i.e. social media) and the emergence of mobile shopping via smartphone or tablet.
The experts at Bazaarvoice and Forrester Research believe there is still a “huge opportunity” for capturing new market share…along with an increased risk of losing market share to retailers who can execute effective strategies that address social, mobile, and big data.
To succeed, retailers need to leverage five trends that are currently transforming the retail landscape. By embracing these trends and incorporating them into their sales strategy, Bazaarvoice and Forrester Research predict retailers can realize higher conversions and larger transaction sizes.
1 Shopping Is Social
Customers are talking about products and services in highly visible places online, and these conversations are playing a role in consumers’ purchasing decisions. Shoppers aren’t stumbling onto user-generated content about products and services; they’re actively seeking it out and making it an indispensable part of their purchase process.
Retailers have to take an active role in putting content in the path of their target audience. By integrating customer purchase and experience stories, ratings and reviews, and questions and answers into the online and in-store shopping experience — and even into marketing campaigns — they can increase awareness of their brands, engage consumers, and create loyal, lasting relationships.
[mks_pullquote align=”left” width=”950″ size=”24″ bg_color=”#ffffff” txt_color=”#bf491e”] The goal is to create a sense of loyalty that will encourage consumers to purchase through the brand — even if the item could be had for a lower price elsewhere. [/mks_pullquote]
A key differentiator for retailers will be the ability to provide relevant social content. According to the report’s findings, consumers want emails, alerts, product suggestions, and user-generated content that they can filter and sort according to the attributes they care about. They want some of this personalization to happen automatically — for example, customized suggestions based on recent searches or buying history. Retailers that provide this kind of personalization will ensure that shoppers encounter the most persuasive data possible at the right point in the buying cycle.
2 Millennials Are Setting the Tone
Those people born between 1978 and 1995 are already profoundly shaping the consumer experience. By 2017, it’s estimated that this group will have more spending power than any other generation.
Millennials are highly motivated by social information, and carry their social networks everywhere they go. They trust brands less than they trust their peers, and they are more suspicious of overt marketing than previous generations had been. Personalized shopping experiences — such as word-of-mouth content that can be filtered from people with similar attributes — is more likely to motivate them than unfiltered user-generated content. Millennials tend to shop brands that reflect their values and personalities, even going as far as suggesting they would pay a higher price for products from companies that are socially responsible.
3 Mobile Is the Platform
Smartphones are everywhere, and commerce conducted on smartphones is expected to skyrocket from $3 billion in 2010 to $31 billion by the end of 2016 — a number that didn’t include sales performed on iPads or tablets.
Consumers who are constantly on their smartphones and tablets are an opportunity for retailers to reach. Shopping can happen anywhere — not just in the store or on a computer or in front of the computer — and retailers must evolve their strategies to keep pace with these changes in consumer shopping habits.
4 Omnichannel Equals a Seamless Experience
For a while now, the buzz around retail has focused heavily on online channels. “Showrooming” is sometimes cited as evidence of this problem. A recent survey by CouponCabin found that 43 percent of smartphone and tablet owners have entered a store to try a product, and 97 percent of those said they later bought the product online for less.
According to the report, many retailers have pushed to check off all the multichannel boxes: robust physical presence, e-commerce site, social channels, and mobile apps. All of these elements are important, but their mere existence doesn’t ensure success. The big winners will be the retailers that can blend the online and offline — the digital and the physical — into one seamless, omnichannel shopping experience.
So what is omnichannel? Think of a strategy that entails the integration of all channels to create a unified experience. It’s an understanding that online shopping happens in stores as much as it does in homes. It means adding items to a shopping cart online and being able to revisit them when you resume shopping via your smartphone. It means consistent pricing and promotions across all channels. Omnichannel also means receiving offers automatically on your phone when you walk into a store, scanning a product’s QR code to read all of the ratings and reviews, performing a one-click purchase right in the aisle, and having the product shipped to your home the next day.
According to the study, consumers want these interactions to be smooth across all channels. Providing them will be one of the bigger challenges that retailers face in the near future, but for retailers who do it well, a successful omnichannel strategy means less showrooming and greater market share across all channels.
Many retailers are dabbling in omnichannel to bridge the gap between mobile and in-store shopping. Many are also blending the digital and physical by creating a positive in-store shopping experience that anticipates – and even facilitates – the use of mobile devices to help consumers make more informed purchase decisions. The goal is to create a sense of loyalty that will encourage consumers to purchase through the brand — even if the item could be had for a lower price elsewhere.
Clever mobile marketing can drive shoppers to physical stores, but the use of technology in-store can also dramatically increase the chance that they’ll purchase on the spot. Retailers will need to provide nearly the same amount of information that consumers can find online: price comparisons, ratings and reviews, item locators, etc. According to Forrester Research, Inc. many consumers may purchase products in stores because of the immediate availability of products and high service levels. In response, more online retailers are experimenting with same-day shipping or delivery within hours in certain geographic regions. Others are producing private-label brands that they can sell directly to consumers — and that are available only through the channels they choose, eliminating the need to compete head-to-head with other retailers.
5 Big Data Can Uncover Unprecedented Insight
The rise of e-commerce, mobile, and social are all adding up to the biggest development the retail world has seen in its existence: big data. For the first time, technology exists that can collect and analyze the massive amounts of data that consumers are generating with every click and tap and even physical movements in stores. Retailers who can successfully capitalize on that data will have the ability to target and personalize their marketing campaigns based on granular data about customer preferences, behaviors, lifestyles, and real-time locations.
Big data isn’t just a potential boon for retailers; it also puts power in consumers’ hands. Retailers that can harness big data can offer relevant, targeted promotions to individual consumers and recommend the right products more often. Retailers will also be able to achieve other goals that will change the consumer experience, boost conversions, and even improve margins such as predicting the next best-selling product, preventing out-of-stock scenarios, and ensuring proper staffing at stores.
Consumers are already tuned into the kind of shopping experiences they want. They’re finding the information they need to make purchase decisions, even if that means they aren’t getting it from the retailers themselves. They shop on their own terms via the devices they choose at the times they want from the locations that are most appealing. That doesn’t make retailers less relevant; it has the power to make them more relevant if they can provide those experiences seamlessly and give customers the information they want.