More engagement, memorable experiences and shareable treats.
Retailers are having a tough time. We’ve recently seen the likes of Mothercare, Debenhams, Topshop, Beales, Oasis, Warehouse, Laura Ashely and Cath Kidston (amongst others), either go out of business or try to reinvent themselves online.
Although it’s easy blame the unprecedented events of the last eighteen months, the loss of other household high-street brands such as Woolworths, Toys R Us and BHS, over the years, prove that the core challenges facing retailers are long-felt and deep-rooted.
These age-old challenges combined with the shockwaves of today are triggering new ripples of opportunity for retail brands ready to anticipate and proactively adapt to this unfolding landscape. With old habits broken and new ways of buying and selling discovered it’s time for businesses to rethink their retail strategies.
With that in mind, here are five consumer shopping trends that your business should be watching in the next five years:
The reincarnation of instore
The ‘death of the hight street’ has become an incredibly overused and over-dramatic phrase. Yes, the rollercoaster ride of 2020/21 has unsurprisingly seen more retail operations shift further online, but rather than negate the need for stores altogether this shift is simply changing customer shopping behaviour and expectations for brick-and-mortar stores.
“Buy online, pick up in store” (BOPIS), contactless payments and contactless returns were in many cases a hastily implemented health and safety necessity. But these moves have inadvertently set new expectations of convenience and given the physical store new purpose.
Ongoing refinement and improvement of these solutions will reinforce these habits and continue to drive new levels of convenience, time saving and streamlined instore experiences for customers.
Retailers’ digital capabilities will become the new competitive arena, where customer data and personalisation are increasingly a focal point for digital customer relationship-building.
Rather than providing a way to focus ad spending on specific target groups, the focus of personalisation will increasingly shift more towards how retailers interact one-on-one. In this evolving field, companies will increasingly try to harness predictive personalisation by essentially combining implicit behavioural and explicit data collection methods, both in-store and online.
These “multi-channel” approaches to data analysis and personalisation will drive new customer experiences. Given how rapidly evolving this landscape still is, many scenarios could play out. Expect to see lots of experimentation from retailers trying to find their online differentiator.
Bringing online edge to the physical world
Physical stores will still add value for shoppers regardless of the surge in online shopping. To be successful, retailers must work hard to close the digital-physical experience gap; rethinking the role of the store and applying traditional online methodologies to the physical world to create a truly connected customer experience.
QR codes are one great way to do this. Louis Vuitton’s recent escape-from-the-pandemic outdoor theme park used QR codes to great effect to showcase its Spring/Summer 2021 Men’s collection. Long-term, QR codes’ ability to augment the physical store will enable customers to interact with store interiors through their personal device, creating safer and more engaging experiences.
Try-before-you-buy technologies will also explode over the next few years as they advance in their sophistication and appeal, bringing more retail experiences direct to customers’ homes. IKEA’s updated “Place” app which allows people to design entire rooms using LiDAR sensors in an iPhone is one of the best examples of this I’ve seen to date. Other technologies like VR and augmented reality will also be in the mix.
Building loyalty through emotion
The convenience and functionality of e-commerce lacks one thing — emotion. In contrast, physical stores encourage shoppers to browse aisles, discover, see, feel and try new products as they go. Shopping for many consumers is a social experience that cements a strong emotional bond with their favourite brands. In the future we’ll see more and more brands working to foster new ways to create these emotional experiences online.
This will include innovative ways to try out products, engage with fan communities, influencers and ambassadors around a product, (co)creating completely unique products, or events like live-shopping. It’s these things that will drive connections, loyalty and customer lifetime value.
Increasingly, the channels where consumers spend their time, such as gaming, concerts and social media will be key avenues to enabling new e-commerce experiences where transactions are merely a biproduct of the richer experience customers get in these moments. Brands must incorporate these channels into their e-commerce strategy to extend both their online and in-store shopping experiences.
Leaving lasting human impressions
The difficulties with product trial and consultation experiences online are a key reasons why customers still visit physical stores. Brands must work harder to perfect these interactions in a digital domain.
Ever growing consumer comfort with video conferencing tools means that retailers can harness them for co-browsing experiences. AI chatbots will also get a big promotion in the form of “digital people” that can conduct consultations and evolve based on their interactions with users.
Live stream shopping — given its success in China and the big investments being made by the likes of Instagram, Amazon, and Shopify — will becoming a primary method of fostering customer engagement in the next few years. As such, businesses should invest in these experiences if they want to stay relevant across channels.
In the future, not every interaction needs to be a transaction. To thrive businesses and retailers should focus on bringing the escapism (and sometimes magic) consumers associate with physical shopping to their digital experiences.
By offering new types of more engaging, memorable and shareable experience the emotional payback for the brand will create long-lasting value over time.
Chris Daplyn is managing director for Valtech UK.
Five Consumer Shopping Trends For The Next Five Years