We’re already well into the year, and retailers will soon begin evaluating their Q1 results. Many of them will be hoping to reverse their poor performance in Q4 2018 which reportedly saw the worst Christmas in 10 years for UK retailers.
Many high street brands reported a drop in sales over the usually buoyant festive period last year and, as a result, were forced to discount clothing by up to 75% before the peak shopping season.
Not everyone experienced such a poor 2018, however. Savvy retailers who embraced retail trends and invested in smarter campaigns were able to buck the trend and increase their profits over the same period.
Those same retailers will already be looking ahead and embracing the new and ongoing trends for 2019. And if you want to join them, here are six things we recommend you consider doing to win the hearts (and wallets) of customers.
1) Let people know who you are and what you stand for
Perhaps unsurprisingly in an age when Fake News dominates the headlines, today’s shoppers are demanding increasing transparency from brands.
With provenance increasingly front of mind, they want to know exactly what a product or service is made of or includes, and where any ingredients or elements have come from. The more information and detail you can give them on what they’re buying (including product shots and videos), the better. Mckinsey,listed transparency as one of their 10 retail trends for 2019.
Consumers also want to have a clear sense of a brand’s mission statement and values, to have genuine interactions with them on social media, and be able to easily search reviews and rankings.
It’s worth the effort of investing in transparency. A transparency ROI studyfound that 94% of consumers are likely to be loyal to a brand that offers complete transparency, and 73% would be willing to pay more for a product that offers complete transparency.
Worryingly, for brands who overlook this important factor, 39% of consumers said they would switch to a new brand in the pursuit of product transparency.
2) Make fast and cheap shipping a commodity
Today’s shoppers aren’t willing to be patient, it seems – and increasingly they don’t need to be. As the e-commerce sector expands (it increased by 11.4% in September 2018), retailers are looking for more efficient ways to deliver products to consumers.
As a result, the amount of time buyers are willing to wait to receive their goods is falling – from 5.5 days in 2012 to 4.5 days in 2017.
Amazon Prime members are even more demanding; on average, they expect their deliveries to arrive within 3.8 days.
Amazon Prime’s generous delivery promises are also influencing customers’ purchasing choices when buying from other retailers. Almost 6 in 10 buyers say they browse for products based on their preferred shipping options, and 1 in 4 will buy from a retailer that offers free shipping, even if the product costs slightly more.
Consumers also expect more than one shipping option. According to a 2019 retail report, “82% of consumers say that they are more likely or much more likely to purchase from a brand that offers multiple delivery options”.
So if you want to encourage purchase from today’s shoppers, explore ways you can deliver faster, and for less. You may even want to experiment with including the shipping cost into the product price.
3) Work out repeat engagements for customer lifetime value
If you’re considering offering some kind of subscription service to your customers, we’ve got good news for you. Since 2010, the subscription e-commerce market has exploded. By 2016, the subscription e-commerce market had grown by more than 100% – from $57.0 million in 2011, to more than $2.6 billion in sales in 2016.
And by 2018, 15% of online shoppers had signed up to a subscriptionto receive regular deliveries of products (usually monthly).
Subscription-lovers also tend to be younger, and more affluent. In the US, they’re most likely to be 25 to 44 years old, to have incomes from $50,000 to $100,000, and to live in urban environments. 60% of buyers are also women.
4) Put your product where your customer is, not the other way round
Forget needing to choose between bricks and mortar or online retail stores – today’s savvy brands offer their consumers a multi-channel buying experience.
Instead of relying on a single touchpoint for consumers, over the past few years the retail trend has been to broaden the net and attract and convert leads from multiple channels.
And it makes sense. Not only are consumers today exposed to sales messages on numerous platforms and places, but each generation appears to have a different buying preference:
- Gen Z buyers (aged 18-21) spend between two and three times more shopping on social channels than the average consumer.
- However, only 9.6% of Gen Z buyers shop from physical stores, compared to 31.04% of Millennials (aged 22-37), 27.5% of Gen X buyers (aged 38-53) and 31.9% of Baby Boomers (aged 54-72).
- Gen Z buyers spend just 11.8% on products they find from Facebook, compared to Millennials at 29.39%, Gen X at 34.21% and Baby Boomers at 24.56%.
The top three buying destinations for consumers are Amazon, branded ecommerce websites and bricks and mortar stores. But their reasons for purchasing via each channel is different. Gen Z buyers, for example, are two times more influenced by product recommendations, ads on social media and brands’ social channels.
One channel you’d be wise not to overlook, especially if you want to increase sales in Asia, is gaming. Asia now makes up half of the global gaming market, with 43.7 million active gamers in Indonesia generating USD 879.7 million in revenue in 2017, and the Indian market forecast to grow to $1.1 billion in 2021.
And it’s not just men – women outnumber men when it comes to playing the hit game Tencent’s Honor of Kings. As a result, smart luxury brands in China are using gaming as a new way to reach them.
All this adds up to one clear conclusion: if you want to grow your retails sales today, you need to consider a multi-channel approach, and tailor your strategy and budget to your customer profiles.
5) Put sustainability at your heart
From locally sourced produce, to the war on plastic and the ‘ugly’ veg trend, today’s consumers are increasing conscience-led when choosing where and what to buy.
So if you want to win their business, ‘ethical’ and ‘sustainable’ need to be front of mind when making sourcing and marketing decisions.
And your new ethos needs to be more than just a token – according to a report by the Retail Industry Leaders Association (RILA), 93% of global consumers expect more of the brands they use to support social and environmental issues.
It’s worth going the extra mile in pursuing sustainability (as long as it’s not a food mile…). An estimated 68 million adult Americans base their purchasing decisions on their values, and say they’ll spend up to 20% more on environmentally sound products.
So what ethical strategies could you look at pursuing? Here are some suggestions:
- Go paperless– promote a paperless culture in your offices.
- Reduce manufacturing waste– can you look for opportunities to switch recyclable or reusable products?
- Look for clean energy solutions– can you change to energy methods that consume and emit less waste?
- Recycle used products– can you help customers lengthen the life of their purchases by offering a discount in exchange for old products, which you then recycle or donate?
- Be transparent – be clear about the efforts you are making to be ethical (including all above suggestions) to help consumers feel better about buying from you.
6) Delight customers with ads that are relevant at the right time, not creepy
Today’s consumer is bombarded with digital ads throughout their day – from social media ads and display campaigns, to digital out of home. And much of this digital noise is poorly targeted, and shouting messages AT the user, rather than engaging WITH them.
The good news is that this significant communication gap offers a lucrative opportunity to the brands that understand the power of genuine engagement through customer-centric advertising.
As Salesforce say in their retail predictions for 2019
“Retailers must have a full picture of their customers, and act on that picture, to compete effectively. Why? Because merely competing on price (and even product) is a losing proposition. 2019 will be the dawn of a new level of customer engagement that is only made possible via mature data management and intelligence that will determine retailer winners in this renaissance.”
More sophisticated targeting, and dynamic ads (we call this audience and creative intelligence) ensure that your campaigns are carefully targeted to the right people, with content and messaging tailored to not just their interests, but where they are in the buying lifecycle.
The ads are carefully targeted to ensure their messaging and frequency is appropriate to exactly where the customer is in the buying lifecycle. And don’t veer into ‘creepy’ territory by stalking them with repeated and irrelevant ads every time they venture online.
Adding the option to engage with their ads, and choose what they wish to see or click on adds an extra layer of personalisation and engagement that leads to the kind of impressive incremental ROIs that most retail brands can only dream of.
Need help creating intelligent retail campaigns?
We’re experts in working with retail brands on intelligent campaigns and lifecycle marketing that embrace the latest trends and deliver industry-leading ROIs.
You can read here how we helped one high street brand buck the dismal Christmas sales trend in 2018, with an incremental ROI of 5.4-6.4, and overall ROI of 9:1, a 43% new customer rate (compared to an industry average of 25-30%), and £240k of incremental revenue here.
If you’d like to find out more about how we achieved this and, more importantly, how we can replicate these results for you, please get in touch and we’d be delighted to help.