Between the shopping aisles: retail apocalypse or evolution?
Though the media term ‘Retail Apocalypse’ sounds dire, everyone seems to be putting a little too much emphasis on the word apocalypse these days. And while there are some important shifts happening in the world of retail, it’s not quite the smoldering ruins some make it out to be. Think of it instead as ferocious evolution, one that will result in more available resources for those that dare to survive no matter the cost.
No, retail is NOT dying
Sure, some major retail chains have gone belly up and others are cutting their number of locations. But store closures shouldn’t be taken as a sign of industry-wide failure.
Plenty of other retail stores—such as Ulta, Dollar General, and Target—are growing like never before. The real verdict? We could all stand to look at the numbers a bit more critically before panicking.
The companies closing down failed primarily due to poor business practices. Overextension played a huge role, coupled with massive debt and reluctance to adapt to changing customer trends. Like many industries across economic history, retail has a bubble, and the bubble finally popped.
Payless shoesource, for instance, committed several business mistakes, most notably failing to create an online presence, suffering supply chain interruption, having a computer system issue that affected back-to-school sales, and selling at such a steep markdown that profitability suffered.
Many of the closing retail chains also struggled to innovate. Online orders with in-store pickup, store-to-store and store-to-home shipping, and the ability to return online orders through the store location are just some examples of services that lure in today’s consumers. With less disposable income than previous generations, millennials are making retail work harder to get their money. They want to enjoy their shopping experience, preferably from their own phone.
A big enough deal where Walmart invested in this pricey Super bowl ad
What eCommerce companies can do
No longer are consumers limited to the only shop or two in town. They have options, and they know it. Millennials are deal-hungry and will shop around to get exactly what they want, how and where they want it. If you don’t have it, or fail to communicate that you can get it, you will struggle to keep your doors open.
In short: today, it’s all about eCommerce. Give the customer what they want, and they’ll keep coming back. Customer loyalty is key.
An increased focus on referral programs and affiliate marketing can help fill the gap left by the millennial abandonment of brand loyalty. No longer do customers buy ‘what they always have’ — they go where the deals are the best. To create brand loyalty, you need to create brand trust.
Word-of-mouth marketing and testimonial-style reviews can take the place of the in-store experience. Nurture the customers you already have, because keeping an existing customer is cheaper than gaining new ones—and at least two thirds of millennials said they’d switch brands for a discount of 30%.
Personalized experiences are now expected from customers. A personalized email experience tailored to their interests, rather than a generic “one size fits all” type of email, have overall higher engagement rates that lead to more conversions. Also, the buying cycle is no longer linear and customers go in-and-out of several lifecycle stages. The key is to take advantage of the opportunity in each stage with the right content, at the right time. These personalized experiences–using data like website behavior, purchase activity, demographics–when paired with artificial intelligence offers a nuanced picture of consumer behavior. It helps create experiences that are authentic, increasing purchases and customer retention.
Combine your marketing talents with our artificial intelligence platform to provide a relevant customer experience. At ReSci, we do marketing differently with a non-linear approach, reaching customers at various buying stages. We’ll get you in front of customers at the right time, and the right place to convert. Learn more.
Our prediction in the near future and beyond
We certainly have a positive outlook on the future of retail. Yes, there will be more closures, but that opens more doors for retailers to find interesting ways to keep those doors open. As we’ve seen in past years, those who have adapted and have taken risks have survived or flourished.
Direct-to-consumer brands continue their business model, capitalizing on customer experiences while big corporations copy them. Larger brands have taken a closer look at the DTC strategy, even to the point of acquiring brands, to imitate them to stay competitive. They’re asking themselves how they are losing market share to brands that are a fraction of their size.
We already see steady increases in marketing technology for managing and analyzing customer data, and customer centric technology. Technology that helps brands understand their customer base to provide a better experience, like customer experience management software, will increase. Data teams will start to dwindle, at least on the marketing side, as technology starts to catch up. What was once too complex to be handled by marketers, or because of a lack of resources will start to be a thing of the past.
Our boldest prediction: The word “mall” no longer exists and a big agency creates a new buzzword to replace the word entirely. What we call a mall today becomes something totally different: a meeting place to dine and socialize, be entertained, and “experience” brands with interactive pop-ups and the only buying happens directly online.
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ReSci is a team of marketers and data scientists on a mission to democratize AI. We make powerful recommendations and predictions accessible to brands. Find out how we can help you connect with your customers.