Don’t plan a funeral for retail just yet. If 2018 was any indication, the tides have begun to turn.
Although mass store closures continued to menace the industry last year, Fast Company’s analysis shows a positive trend for physical retail concepts going forward. The volume of closures dropped by half from 2017 to 2018, and new retail tactics have begun to bring brick-and-mortar outlets into the digital age.
Customers still like to experience brands and products in-store. Now, the only question is, how do retailers make the most of the opportunity?
New tactics for a new age
Retail’s happy turnaround has more to do with an evolution of retail leaders’ strategies than with a regression in customer preferences. If shoppers still faced the same options they did in 2017, store closures may have continued at their terrible pace. Instead, stores caught up to expectations, and consumers rewarded them with their business.
To maintain that momentum, retail companies must keep up with the aggressive pace of technology. Tools like voice assistants and augmented reality will soon alter the personalization possibilities of in-store experiences. Behind the scenes, improvements in inventory management and other operations will have a significant impact on the shopping experience.
The future of retail is not only about the products in the store it’s also about the feeling of a shared and meaningful experience that the brand provides. Internet of Things (IoT) connectivity will create unique visits for every guest. In-store mobile integrations will give shoppers the same hyper-convenient experience in person that they have online, while augmented reality opportunities will enrich their retail experience.
With so many changes on the horizon, retail leaders face a crossroads of long-term strategy and short-term needs.
Consider implementing the following tactics into your retail marketing plan this year to increase your foothold:
1. Go long, but act short
Big-picture strategies should inform even the smallest details. Unfortunately, many companies fail to consider that picture when they respond to the day-to-day challenges of doing business.
Unlearn the habit of responding instinctively to immediate problems. A sale might push profits today, but will it teach tomorrow’s customers to wait for a lower price to buy?
Look for ways to leverage data to make smarter plays today that fit your long-term strategy. Sales lift studies can show marketers exactly which tactics are working, based on payment and attribution data. For your store, a general sale might not be the right idea. A targeted campaign to deliver coupons to buyers who visited the store in the last month, however? That’s not only possible, but it’s also an effective method to simultaneously boost today’s profits and set yourself up for long-term customer satisfaction.
2. Do more of what’s working
The easiest way to make more money is to find out what already works and do more of it. It sounds painfully obvious, but retailers often try to outsmart themselves by staying ahead of an imaginary curve.
Amazon advertising, for instance, is on pace to be one of 2019’s biggest trends in retail. Recently debuted new-to-brand metrics show retailers how many people made their first purchase in the last year and what it took to acquire those customers. Retailers can use this information to tie customer growth strategies to immediate sales and run campaigns that address both needs. If Amazon advertising works (and we have the data to prove it), companies should pour more money into it instead of over-diversifying into other channels.
Thanks to new capabilities like Amazon’s metrics, marketers are under pressure to shift gears more quickly than ever. To do so, many are adopting the agile methodology that has been so effective in the software development world. If agile can help programmers respond on the fly to user needs, it can also help marketers keep their efforts focused on campaigns that work.
3. Build a better brand relationship
JLL Retail estimates that ecommerce brands will build 850 physical stores in the next five years. As more direct-to-consumer brands move into the brick-and-mortar retail space, they will bring their digitally inspired lessons on exceptional service, streamlined experiences, and ‘wow’ moments to keep customers coming back. Physical stores will play an important role in the increasingly important revenue generation loop.
“Ecommerce companies cannot dump all their money into the first visit and expect to achieve the growth rates that investors demand,” says Christine Alemany, CEO at TBGA.
“Acquisition is great for attracting investors, but to reach your long-term goal — whether that means an initial public offering, an exit, or something else — you’ll need to show sustainable profitability. Revenue generation loops are the key.”
Alemany recommends tracking sales at the SKU level to see what products customers buy, where they buy them, and how they pay. This sales data can then be used to make specialized offers in-store and online, ultimately strengthening the loop.
This year holds exciting promises for retailers, as long as they can meet modern consumer expectations. To do so, they must relearn what it means to engage with customers, deliver great experiences, and make the most of available tools. Trends change fast, but these tactics will help retail leaders get more from 2019 and succeed in the years to come.
Tiffany Delmore is the Founder and CMO of SchoolSafe.