It’s hard to tell what’s true about retail today: there’s either an apocalypse or there’s not, malls are dying or they’re not and e-commerce is taking over brick-and-mortar or it’s not.
Depending on who you ask, each picture painted of retail could be different from other renditions.
What does hold true, according to a new Shopper-First Retailing report by Salesforce, is that retail in 2018 is a new animal and companies that don’t position themselves to provide fresh, relevant and meaningful experiences tailored to their audience won’t be around to see much more of how this iteration of retail takes shape.
After examining insights from half a billion shoppers and 1.4 billion e-commerce visits the world over, surveying 6,000 people in six countries and mystery shopping more than 70 stores, Salesforce outlined three vital Shopper-First mandates necessary to meet consumers demand: make it fresh, be where I am, give it meaning.
How to ‘Make it Fresh’
Customers have already become less inspired to walk into stores when the convenience of e-commerce allows them to avoid being met with what’s very often a disappointing brick-and-mortar experience.
Their inspiration further wanes when stores don’t have anything fresh and new, or anything worth pulling out their wallets for.
“Shoppers reward brands that connect them with products and experiences in unique, agile packages,” Salesforce said in the report.
As many as 69 percent of shoppers expect to see new product when they visit a site or store, and in its research, Salesforce found that 59 percent of the top 5 percent of products sold are new each month.
“Speed and freshness play an important role in generating long-term brand loyalty and driving repeat purchases—two areas where brands have lost ground to both traditional competitors and marketplaces,” Salesforce said.
Brands must be agile to be quick, but that doesn’t mean forgoing quality.
“Making it fresh isn’t about fast fashion or disposable products,” Salesforce said. “It’s about profitably transforming the digital and physical shopping experiences to constantly surface what’s new and relevant.”
An inability to keep things fresh could cost retailers consumers’ second purchase, too.
While 50 percent of shoppers choose to buy a first time product through a retailer, Salesforce said 47 percent are turning to marketplaces like Amazon for repeat purchases.
“Marketplaces are beginning to chip away at the store’s ownership of first-time purchases,” according to Salesforce. When asked where they prefer to start their search for a new product, 28 percent pointed to Amazon in 2018, compared to 22 percent who said so last year. “To guard against customer attrition, brand leaders must prioritize new re-engagement strategies, whether that’s through speedy marketing retargeting, personalized loyalty offers, or perfectly timed upsell opportunities.”
Brands and retailers aren’t going to be able to compete with Amazon’s 3 billion products across 11 global marketplaces, so they have to focus on differentiation.
“While differentiating products is second-nature to many brands, retailers can also compete in this arena with exclusive product offerings and never-before-seen collaborations with partner brands,” Salesforce said. Fifty-nine percent of shoppers said they’re more likely to buy from a brand or retailer that offers customization on products, 49 percent said they’d buy if the company had limited edition items, and 36 percent indicated an interest in collaborations.
How to ‘Be Where I am’
Everything in today’s world is about ease, and if brands can’t meet consumers where they are, they’ll be out there wondering where their traffic went.
“Shoppers reward brands that anticipate and identify the precise moments when a need exists or interest is piqued in their shopping journey,” Salesforce said.
Whether a shopper wants to walk into a store to buy a product, visit the company’s e-commerce site or click through to their product from the ‘Gram—each experience should be equally seamless.
But retailers, though they may have acknowledged this fact, aren’t meeting consumers’ expectations when it comes to delivering on it. Across the 70 physical store locations Salesforce studied, the average score for mobile was 1.74 out of 5, with markdowns for things like the in-store app experience and tailored push notifications.
By the numbers, 60 percent of all e-commerce traffic is done on a mobile device, 71 percent of consumers use mobile in stores, and 82 percent of shoppers are willing to have their product shipped home within 24 hours.
“Mobile has done more than simply disrupt digital sales—it has changed in-store behavior,” Salesforce said.
Mobile has become the top driver of both traffic and sales, with more than 60 percent starting their shopping journey there and mobile order share climbing early 40 percent between the start of 2014 and the end of 2017.
The physical store, however, still has heaps of opportunity to tap. Particularly as 46 percent of shoppers prefer to buy product in a physical store and 71 percent prefer to leave the store with a product in hand.
Nordstrom is one retailer Salesforce said has figured out how to reach shoppers where they are, especially with its NYC Men’s concept.
“This retailer caters to multiple types of shoppers—from the time-pressed shopper, to shoppers looking to linger and spend an afternoon in the store. Key offerings include a 24-hour self-service return kiosk, an on-site barber shop and speakeasy, and a dedicated click-and-collect space,” Salesforce said. “Considering that shoppers’ #1 destination for returns is stores and that shoppers value exclusive in-store experiences, these investments help pave the way for future growth.”
But considering some marketplaces, like Amazon, have more reach to be where consumers are—and where they want to be—how can brands and retailers compete?
According to Salesforce, the answer lies in figuring out where they can shine.
“A shopper’s end goal dictates the channel in which they purchase, whether they’re seeking a low price, a unique product, or evergreen availability,” the report noted. “Product differentiation offered by brands and the convenience afforded through marketplaces are squeezing retailers into a smaller competitive advantage, although shoppers still turn there for strong customer service.”
How to ‘Give it Meaning’
More than anything, brands that hope to engender loyalty among their target cohort must deliver something that connects with those consumers’ values.
“Shoppers reward brands that go beyond transactions and orders to be relevant and resonate,” Salesforce said. Customers want to buy from brands that create lasting impressions over time, but many brands are missing the mark in forging that relationship with their shoppers.
Sixty-four percent of those Salesforce surveyed said they feel retailers “don’t truly know them,” though retailers should be focused on that getting-to-know-you stage since nine out of 10 of the brands that scored the highest with consumers ranked above average for “emotional connection.”
The brands doing best in crafting an emotional connection with consumers, according to Salesforce, are: Bloomingdale’s, Express, L’Occitane, Madewell, Nordstrom and Tiffany & Co.
Corporate giving will also be key in to the ‘Give it Meaning’ mandate, as 45 percent of shoppers said they’d be more likely to buy from a brand that is charitable. And even more than that, consumers want a personalized experience that lends itself to loyalty, something Salesforce said Sephora has figured out.
“Sephora’s Beauty Insider program lets customers accumulate points for discounts, but it also gives members covetable samples of top products. This lets customers try new products in a low-risk way, while encouraging them to branch out of their typical purchase cycle,” Salesforce noted in the report.
The exact approach aside, the new rules of retail demands of retailers that they listen, act and adapt to deliver on fresh and meaningful products consumers will come back again and again to buy.
“As retailers embrace digital business transformation and retool their organizations, a continued focus on your unique customer is essential. Think of it as radical customer centricity,” Salesforce said. “Putting the shopper first isn’t about testing new tactics, but instead, about meeting customer expectations for relevance and convenience as they evolve.”