Retailers have spent the past few years honing the shopping experience on their websites. But just when they thought they knew their consumers, things are changing again. The rise of social is shaking up things in surprising ways. The emergence of mobile as a major shopping channel is putting new power into consumers’ hands. And big data now makes it possible to gain deeper insight into consumers than has ever before been possible.
What does this mean for retailers? Everything. To realize higher conversions and larger transaction sizes, retailers need to leverage five trends that are currently transforming the retail landscape.
1. Shopping is social
Shoppers aren’t just stumbling into user-generated content about products and services; they’re actively seeking it out and making it an indispensable part of their purchase process. Retailers have to actively solicit encourage online conversation, and put it right in the path of consumers’ online and in-store shopping experiences. When footwear brand Skechers added Q&A functionality to product pages, it saw a 32% increase in conversion for those products. Notifying customers that their questions had been answered garnered even bigger results: an 80% open rate on notification emails and a 51% conversion rate from those same emails.
2. Millennials are setting the tone
By 2017, Millennials will have more spending power than any other generation; retailers must adapt to their unique shopping style to stay relevant. Millennials are hyperconnected through social and mobile. Personalized shopping experiences – such as word-of-mouth content that can be filtered from people with similar attributes – is more likely to motivate them than random word of mouth. In fact, 51% of Millennials say consumer opinions found online have a greater impact on their purchase decisions than recommendations from family and friends.
3. Mobile is the medium
By the end of 2013, more than half of all people in the U.S. will have a smartphone. It’s estimated that in 2013, mobile traffic will account for a whopping 40% of all traffic.
It’s no surprise, then, that commerce on smartphones is expected to skyrocket from $3 billion in 2010 to $31 billion in 2016. The good news is, when shoppers use mobile devices, they’re more likely to convert – especially when they find the trusted information they’re looking for. After Jewelry Television added customer ratings and reviews to its mobile e-commerce site, it experienced a 30.55% increase in conversion on the mobile site in less than one month.
4. Omnichannel equals a seamless experience
Many retailers have pushed to check off all the multichannel boxes: robust physical presence, e-commerce site, social channels, and mobile apps. All of these elements are important, but their mere existence doesn’t ensure success. It’s now clear that the big winners will be the retailers that can blend the online and offline – the digital and the physical – into one seamless, omnichannel shopping experience. An omnichannel strategy means adding items to a shopping cart online and seeing them when you resume shopping via your iPhone. It means consistent pricing and promotions across all channels. It means receiving offers automatically on your phone when you walk into a store and then scanning a product’s QR code to read all of the ratings and reviews on the retail site, then performing a one-click purchase right in the aisle and having the product shipped to your home the next day. And omnichannel sells – shoppers who interact with more than one channel spend 18% to 36% more than those who interact with a single channel.
5. Big data can uncover unprecedented insight
For the first time ever, technology exists that can collect and analyze the massive amounts of data that consumers are generating with every click, tap, and even physical movement in stores. Retailers that can successfully capitalize on that data will have the ability to target and personalize their marketing campaigns based on granular data about customer preferences, behaviors, lifestyles, and real-time locations. Retailers using big data to its full potential can increase their operating margins by more than 60%.
UK-based retailer Argos discovered that it could use its 1.6 million pieces of customer content to improve both the customer experience and the bottom line. Instead of using the number of product returns as an indication of dissatisfaction with a product, Argos now uses online customer reviews to uncover dissatisfaction with products that customers might not have bothered to return. The supply team mines online customer feedback for data that can help improve its catalogues every six months and help direct inventory decisions based on customer sentiment.
We discuss each of these trends in much more depth and with added real-world examples in our new white paper, The future is here: The top five trends in consumer-driven retail. You can download the full paper here.