Reshaping retail marketing
The way customers are shopping is changing rapidly. We asked the experts what to look out for this year to stay one step ahead. As the way we buy things changes, so too does the way we sell. To stay on top of this, marketers are scrambling to be one step ahead of the trends. At its core, a successful retail campaign goes where the customers are, gives them what they want, and shows them what they don’t yet know they want. With technological AYLA MILLER developments racing ahead and the pandemic changing consumer behaviour, hears from industry experts about what’s trending in this space for 2022. 1. STREAMLINING ONLINE AND OFFLINE EXPERIENCES As we move past the pandemic days and venture out into the real world again, retailers are scrambling to meet customers wherever they are. While some still prefer to shop from the safety and comfort of home, others can’t wait to hit the shops again. The answer? Retailers are looking to combine the online and offline shopping experience into one smooth, streamlined experience. To do this, retail marketing strategies are working to make the most of the familiar points of contact such as a physical store, staff, or checkout system. This enables a hyper-personalised shopping experience as retailers get to know their customers likes, needs and values to provide an experience tailored just for them. The integration of online and offline channels in retail marketing have become more prominent since Covid-19, says Dr Drew Franklin, Senior Lecturer in Marketing at Auckland University of Technology, and in turn has resulted in many shifts in retail marketing. These include more attention to hygiene, crowds in stores, and mandated online-only shopping. “Adapting to a more integrated experience for consumers than, in some cases, quite a distinction between online and offline interactions is critical for retailers. Treating online as a genuine customer touchpoint, rather than simply a discrete channel to market, is becoming increasingly important as consumers consider the entire retail experience relative to the brands they engage with.” He says one of the main differences between retail marketing and other marketing is the role that people play when delivering a positive retail experience. “The ‘servicescape’ in retail has been likened to theatre, with a backstage (systems, processes), frontstage (visual merchandising and store design), actors (staff and other customers) and an audience (the wider marketplace and other non-customers).” This analogy demonstrates how important an integrated experience is along the whole customer journey or touch points, Drew says, particularly around hybrid modes of retail such as ordering online or through an app for in-store pickup, or through an intermediary. Guy Richards, Retail Dimension’s Creative Director also points out that it’s a lot harder to upsell online whereas instore it’s much easier. To this effect, marketers are treating retail as more of another marketing channel rather than as something that provides a function. Leading global retail bank, payments, and shopping service Klarna recently launched its own virtual shopping offering allowing consumers to browse and buy online with confidence by connecting them directly with in-store experts through live chats and video calls to receive product advice and inspiration. By using the new merchant-facing Klarna Store App, in-store teams can share photos and videos of items and demo products live directly from the store floor, from home or even from emerging dark store concepts. This in turn drives brand engagement and loyalty while reducing return rates. Klarna revealed over three-quarters (79 percent) of Australian shoppers believe that retailers need to invest in new technology, while more than a third of those think that offering more personalised services (40 percent) and product recommendations (45 percent) is a priority for retailers. “In the past, online shopping has been missing a key element: human interaction With Virtual Shopping, we replicate the brick-and-mortar experience of receiving personalised advice from an in-store expert and bring it to the online realm,” says David Sandström, Klarna’s Chief Marketing Officer. 3. MOBILE COMMERCE As the average number of hours we spend on our phones grows, so does the number of purchases we make through mobile devices. To secure a sale when the customers is out and about, the process needs to be simple. Taking this into account, retailers will need to adapt ordering systems to avoid customers having to enter their vital information such as their credit card numbers and their address each time they want to buy something. According to statistics published by Insider Intelligence retail m-commerce sales hit $359.32 billion in 2021 in the US with m-commerce sales expected to more than double to $ 728.28 billion by 2025. Retail giant Amazon has tackled this by allowing a one-click to purchase simply by entering the CVV number on a credit card. Another trend hitting the mobile market is businesses optimising websites for mobile screens. These mobile devices are smaller by nature and less user friendly when it comes to navigating traditional sites. Businesses and brands can improve this by ensuring websites and any connected m-commerce app incorporate a well-designed user interface. Sally Feinson, Trade Me Marketing, Brand and Communications Director, says the company has seen increasing numbers of shoppers moving from using the Trade Me website to the app “with over three quarters of our Trade Me audience now buying, selling and browsing on our apps”. “Without question, app users are much more engaged and we see much stronger conversion rates within our apps.” As a result of this Sally says the company is moving towards a mobile first business since the demand for this is clearly there. “We now take an ‘app-first’ approach to product development, with a number of features, like Make an offer and Messages, initially launched exclusively in our apps.” The Warehouse Group is also adapting to this trend with customers across all its brands using mobile devices and apps to research their shopping trips. “We’re seeing mobile apps continue their dominance as the preferred way for customers to shop. The Warehouse app now accounts for 35 percent of total online sales and we know that mobile apps drive higher frequency than our websites, and are used more often by our high value customers,” says Jonathan Waecker, Chief Customer Officer of The Warehouse Group. 4. ETHICAL VALUES-BASED BRANDING Millennial and Genz consumers want to shop consciously, and they want to know that a brand holds similar values to them. Today’s consumer is increasingly voting with their wallet, meaning retailers and brands need to be transparent about how they operate as well as clearly communicate their ethical values. Successful retailers will ensure branding strategies prioritise social impact and corporate responsibility. And this trend isn’t going anywhere fast says Guy, but it is a more difficult change for retailers to incorporate into their marketing strategy. “People are really struggling with how to achieve it, but the younger generation will gravitate to a store which has strong ethical values. ‘You align to my values so therefore I will support you’ and that’s not going to go away,” he says. Aligning with a cause or ethical value can also provide opportunities for businesses to make a difference as research has shown consumers are more interested in issues their favourite brands are tackling. 5. INCREASED USE OF E-COMMERCE AND DIGITAL CHANNELS There is no doubt the pandemic fast-tracked the uptake of e-commerce and digital channels, and these channels will continue to play an important role. Advancements in technology and the increase in availability of digital marketplaces are also making it easier to buy and sell online. Trade Me observed a huge shift in the way Kiwis shopped during the pandemic, however Sally says things are now returning to how they were pre-pandemic. “Across the globe, e-commerce scaled at an accelerated pace as a result of lockdowns and the ongoing impacts of Covid over the past couple of years. We’re now seeing this growth settle to a more sustainable rate as the world begins to return to ‘normal’.” This increase in e-commerce meant shoppers became “increasingly savvy” when it came to bargain hunting and much more open to browsing online she says. Taking this into account Trade Me “bolstered our Google Merchant Centre to ensure we’re showing up when Kiwis are looking for something specific”. The company also curated its on-sale listings so shoppers could browse deals from its 15,000 plus sellers in trending categories and is continuing to develop its findability and content curation onsite to improve customer browsing experience. According to Shopify e-commerce is expected to grow by $ 11 trillion between 2021 and 2025. As for the future, Drew urges retail marketing teams to think about how customers wish to engage and how their shopping behaviour has changed. “Delighting customers starts with a good product or service, but certainly doesn’t end there,” he says.