Editor’s note: Demetrios Tzortzis is associate principal of digital strategy at marketing technology and services company Acxiom, Denver. This is an edited version of a post that originally appeared here under the title, “Will retailers bend for these trends?”
The latest phone, the hottest social media sites, the trendiest diet, the coolest shoes, the hippest clothing brands … these are all things that many consumers keep up with to avoid the social consequences of exhibiting last year’s expiring trends. If consumers can keep up with all the trends being pushed by retailers, then what’s the deal with retailers lagging years behind trends that can help them grow a business, maximize profits and improve customer value and experience? At the core, consumers and retailers have very similar needs: they both want to be desirable, relevant and efficient, yet retailers’ transition has been slow and painful, requiring much coaxing to put changes into effect.
So what are some trends that retailers should adopt?
Battle of the generations
Let’s start with how the generational gap between Boomers and Millennials characterizes their needs and desires. Boomers – now in their 60s and 70s – hold incredible buying power, yet retailers are challenged with adapting to their needs. The complexity faced by retailers in how to bridge the gap of the equally large Millennial market segment requires a completely different customer strategy. For many retailers, both market segments are equally important, as Boomers are the heavy spenders and Millennials are future high-value customers. Both groups require a distinct retail environment, messaging, communication strategy and product mix. Some retailers may be able to cater to both, while many will have to be selective when focusing limited resources for short- and long-term growth.
Can’t buy my loyalty
As a consumer, you may love or hate carrying loyalty cards. In many cases, you may have a card but not carry it with you, creating a wasted opportunity when you want to use it. Loyalty programs by way of points-for-purchase are going by the wayside. Infrequent purchases, programs that are not integrated into existing channels and programs that are simply not compelling enough to sign up for don’t excite consumers anymore. The solution requires a shift that will look like a hybrid between the points-for-purchase and engagement/action based programs. This engagement can be anything from downloading an app, scanning a QR code in store, playing a game, clicking on content or watching a video among the many other gamified experiences within the retailer’s ecosystem. To scale across these engagement techniques, retailers must begin with updating and integrating their ecosystems to identify value-added engagement points to credit the consumer. These touchpoints should be tied to high-level KPIs and campaign engagement metrics.
What an experience!
Consumers often don’t have a linear or rationale purchase journey and marketing will remain forever changed by consumers’ instant access via connected devices, something that will continue to become more complex as technology evolves. Retailers have been talking about the customer experience and omnichannel marketing, and now it is bubbling-up to a critical conversation as retailers are challenged to effectively incorporate content-rich and personalized online and offline experiences through storytelling and POS technologies, as well as all things mobile, including apps, beacons, geo-location, wearables, loyalty and more. It is imperative that retailers bring marketing, IT and operations teams together to make this omnichannel experience a reality.
Do you care?
More than a fair share of retailers have breached the trust of millions of consumers and I suspect we can all recall at least one instance from recent headlines. Let’s face it, no company is perfect but when it comes to data privacy consumers don’t care why or how a data breach happened. Consumers assume and demand that the data they share is secure and will only continue to share that data with brands that apply it in an ethical way, while providing relevant offers and services. Data breaches and the failure of brands to be compliant have cost retailers billions of dollars and much more in irreparable brand damage and long-term trust. This is a symptom of technologies not evolving quickly enough to manage risks and ensure secure and ethical management and application of consumer data.
Where’s the data?
Many retailers exist with far from ideal internal ecosystems, where data is siloed and access is restricted or non-existent. Imagine trying to initiate a product recall without unified access to critical data on affected customers? How about leveraging data from the online ecosystem in the retail space? Wouldn’t that be valuable? Of course but for many retailers, data remains inaccessible, siloed and underutilized. This hurts the brand and the consumer. For a true omnichannel experience, retailers should consider moving data into a single database to access a 360 view of the consumer and more effectively drive relevant and contextual offers and services. At the core, having a single unified database will effectively enable retailers to harness more accurate and scalable consumer insights to be applied across channels and devices.
Retailers dread looking at this list of trends: necessities in the evolution of business and the strength of a brand. If retailers don’t begin understanding the value of current and future consumers, offering them value and incentives all the while ensuring their privacy, then any attempts to break down internal departmental silos, integrating retail, online and mobile channels aligned to corporate goals will be futile. These decisions must come from the top-down to drive cultural shifts that many brands have resisted because the changes are painful.
The retail space is more competitive than ever. Small start-ups are moving quickly, adopting technology and stealing consumers with socially conscious business models that appeal to both Baby Boomers and Millennials. The inevitable will happen: some retailers will sink and others will swim.