The bright spot is online sales — especially on mobile devices — which are expected to continue experiencing double-digit growth. But as analysts note, these sales mostly represent a shift from buying in stores.
Still, given the consumer preferences for a “seamless” shopping experience, companies are making investments in technology as well as data analytics to maximize online results. But are they using data and technology in the right way? And as they step up their marketing efforts online, how can a brand cut through the noise and effectively reach consumers?
Dana Telsey, chief research officer of Telsey Advisory Group, told clients in a research note that “companies continue to leverage technology to more efficiently manage inventory and are utilizing [customer relationship management] systems more effectively to tailor their message and direct marketing dollars to enhance productivity.”
That helps, but social scientists and researchers say today’s consumer is exposed to more than 10,000 marketing messages a day — which include logos and labels to digital display ads and billboards.
Jon Weber, managing director and partner in LEK’s Boston office where he heads the firm’s retail and consumer-products practices, said cutting through the marketing din isn’t easy.
“On the one hand, all channels are important to some degree given [changes in consumer behavior],” Weber explained. “What matters in the end is that you have something to say that’s relevant to consumers. If it isn’t, they’ll just turn you off. The best thing you can do is ground yourself in your DNA and prioritize your content, messages and marketing channels to consistently communicate around the things that differentiate your brand and connect with consumers. If you find yourself limited here, this usually points back to an issue regarding your fundamental value proposition, not your marketing.”
Meanwhile, regarding the growth of mobile and e-commerce, distribution and fulfillment processes have shifted to meet the changes created by a consumer-centric environment. Weber said that “purchase patterns, demand distribution and consumer expectations are different in a digital world versus a purely physical one.”
“Therefore, planning [and] forecasting needs to be distinct, and the warehouse and logistics infrastructure needs to be capable of processing and shipping large volumes of orders accurately and timely,” he said. “If you’re a retailer, integrating the store network into the equation can help deliver benefits of speed to customer and inventory utilization if done right, but this requires a lot of sophistication, and it’s easy for negative consequences to occur given that the physical store network, logistics and in-store protocols weren’t designed around an omnichannel world.”
Also key, Weber said, is the need for having a more clarified distribution and fulfillment strategy. And a more effective online strategy as well. “The call to action for companies to get digital strategy right is deafening,” Weber said. “When we think about digital strategy, it’s important to take a holistic view of the consumer life cycle, not just the purchase part. We think about the life cycle in five components: learn, engage, purchase, experience and share. You need to think of your strategy for each of these and how they interact.”
A key part of developing these strategies centers on using data. Michael Klein, director of industry strategy for the Adobe Marketing Cloud. Noted that the “current retail environment is competitive and brands must adapt to the growing online, mobile and tech savvy shopper. Online cart abandonment and price wars threaten the success of retailers, but leveraging data and analytics in a smart way can dramatically improve the customer experience, ultimately prompting consumers to take action and resulting in a positive impact on your company’s bottom line.”
Klein went on to say that retailers who are using advanced analytics tactics to “embrace 360-degree views of their customers and then apply those views to the customer experiences — whether online or off-line — are the brands that are going to win the retail game.”
A more holistic view demands offering consumers a consistent shopping experience — both online and in stores, which Klein said must be fused together. “This contiguous conversation you have with the customer tells her that you understand what she’s looking for and allows for more personalization in the types of messages you serve up, and how she sees those messages.”
“Data and analytics collects valuable customer behavior information so that brands can better understand key buying audiences and provide content that’s meaningful for consumers,” Klein explained. “Data also helps retailers understand what customers are looking for through internal search, which are critical to know what they’re looking for that a retailer may not carry.”
Using data to inform merchandising decisions also circles back to the importance of having control over inventory as well as greater visibility. With mobile commerce, Klein agreed that it is a key part of the shopping experience — especially when it comes to payment transactions.
“In some cases, the cashier has been rendered almost unnecessary,” he said. “Long line? No problem — have an associate allow customers to pay with mobile devices. Furthermore, mobile allows access to who and where your customers are, providing brands with great opportunities to capitalize on that increased knowledge to serve great experiences regardless of where a customer is. Mobile technologies including iBeacons and RFID within physical stores can also inform better merchandising decisions by increased understanding of traffic flows, dwell times, and product interactivity and engagement.”