2020 has been a tough year for the world and retail in particular. Physical stores were closed and the disruption of supply chains slowed deliveries. However, innovation didn’t stop evolving.
If anything, 2020 has also proved a decisive year, transforming the landscape of retail and marketing towards relationship commerce, improved seamlessness, and local retail.
This article explores the key drivers of this transformation as well as how they will shape retail and marketing for years to come.
Five years ago, Amazon opened its first brick-and-mortar store, a retail bookstore. The usual trend had been (and still is) physical stores going online, not vice versa. Today, Amazon runs 6 different kinds of physical stores selling almost anything from books and devices to grocery and merchandise.
The blurring lines between online and offline commerce have been a talking point for years but now we are seeing it manifest at scale. Modern commerce seamlessly integrates the digital with the physical.
According to a survey, over 50% of customers who purchased from a retailer online also had an in-store experience in that same period; and 82% of smartphone users turn to their phone while inside a store to make purchase decisions.
As the gap between online and offline commerce closes by the day, brands are rightly making a shift to omnichannel marketing, creating a consistent user experience across channels and devices, enabling customers to convert on any channel.
Payments have undergone significant changes over the past years. Cash payments have declined, and cards have moved from the magnetic strip to chips and now contactless cards as well as contactless mobile payments (scan and go). Though more mainstream mobile payment options are Google Pay and Apple Pay.
In 2021 and beyond, biometrics payments will gain much wider acceptance. Biometrics payment on its own, not as part of multi-factor authentication.
Some experimental models include a Denmark student canteen that now lets customers pay with their finger, using infrared light to map the unique pattern of the veins as well as Amazon’s new palm scanner to be used at its physical stores.
Biometrics is coming to remote payments as well, with Juniper Research predicting that mobile biometrics will authenticate over $2 trillion of sales by 2023, 57% of biometric transactions will be remote by then.
Another key trend in payments is the increasing adoption of bitcoin as an acceptable shopping currency. Payment gateways from companies such as Coinbase and Bitpay enable bitcoin payments. In this regard, Shopify is ahead.
For some while, voice has been hailed as the next generation of search. And that’s not far-fetched at all. As of 2018, 27% of the global online population was using voice search on mobile.
Since then, we have witnessed advancements in digital assistants and smart devices, which have significantly made voice search more popular.
Owners of these assistants and smart devices are increasingly using voice search in shopping, from researching products to making actual purchases. According to OC&C estimates, $40bn (in the USA) and $5bn (in the UK) will be spent through voice commerce by 2022.
There is a connection between voice searches and local retail. 58% of consumers in America used voice search to find local businesses in 2019.
All evidence shows that this trend will keep growing. Human beings are more apt to speak than to type; so what’s happening is we are embracing our natural tendencies more.
We know about brand values and understand why brands must showcase the core beliefs and principles that they stand for. When it comes to social issues, brands have had to stay neutral, playing it as safe as possible.
Gone are those days. Customers are asking for more.
It all started when commerce moved from merely buying and selling to the building of relationships. Customer expectations from brands now reflect relationship dynamics, such as the need for loyalty and trust, as well as care and concern for practical social issues they (customers) face.
According to the 2020 Edelman Trust Barometer Special Report, 58% of American consumers want brands to educate the public or advocate for racial equality and 60% want them to invest in addressing the root causes of inequality.
Customers, particularly those of the younger generations, are belief-driven and conscientious, and would only buy from brands they consider allies as far as social issues such as racial justice, gender equality, climate change, gun laws, and even the current raging pandemic are concerned. The chart below is from the same Edelman report.
An example of taking a stand is Dove’s continuous Real Beauty campaign, promoting diversity and acceptance in an industry infamous for reinforcing stereotypes.
At this time, brands can’t afford to be quiet. They need to demonstrate their core values in practical actions, especially since advertising can’t earn them this kind of trust from their customers.
Very soon, most people will be purchasing food, groceries, and clothing the way they access software, water, and electricity: with a subscription.
Consumer preferences are shifting towards experience and away from products. A subscription model enables businesses to adapt to the changing landscape.
For example, Walmart recently launched Walmart Plus, a premium subscription service that challenges the more established Amazon Prime and Target Subscriptions.
All three membership packages come with such perks as free delivery, lower prices and exclusive deals, easier payments, and a host of other benefits. These benefits are packaged as ‘insider’ experiences and are aimed at inspiring customer loyalty.
Subscription retail is a win-win for buyers and sellers. Sellers have a more predictable flow of income and can scale better while buyers benefit from a greater shopping experience through automated buying and other perks.
On average, subscription services grow revenues at a 5x faster rate than S&P 500 revenues (18.2% vs. 3.6%) and U.S. retail sales (18.2% versus 3.7%). Also, there has been an emphasis on businesses building relationships with their customers, and a subscription-based model ensures just that.
2021 is shaping up to be a remarkable year for the retail and marketing industry. And the trends highlighted above would have a long-term impact on business. Taking advantage of the growing opportunities now will keep your company competitive for years to come. At the end of the day, enhancing the shopping experience is the core goal.Reblogged 3 months ago from www.clickz.com