4 Retail Trends Specialty Retailers Need to Know
In the past few years, there have been a number of new technologies that have surfaced and are leading the charge in retail trends; think artificial intelligence, increased automation, and virtual or augmented reality. However, the trends that will really make a last impact on your customers are much simpler in concept and revolve around one idea — creating a community through personalization across all mediums: in-store, online, and in-product offerings.
Below are 4 key trends that are critical for specialty retailers to master, in order to truly differentiate themselves in today’s complex and increasingly competitive retail industries.
Years ago, I worked in a café as a barista. We had a regular customer named Frank who would come into our shop every morning. Frank would always order a very specific kind of coffee that we’d only have in the back. Every time we saw Frank coming, we’d go to the back, grind and brew the beans for his coffee, and have it ready for him by the time he got to the cash register. It would always bring a smile to his face to see exactly what he wanted, waiting for him. The personalized service we were able to give our loyal customer made our little coffee shop feel like a real community and the service delighted Frank every time he came in.
Personalization, as a pillar of customer engagement, is a key trend in retail that’s particularly important for specialty retailers. It can inform how you talk to your customers in-store and online, during the store visit, or after the customer leaves. Like Frank in our little coffee shop, the goal is to know your customers and provide them with relevant engagement, be it through your customer marketing or your in-store sales approach, so the customer feels seen, important, and valued. According to a BRP survey, 79% of consumers said personalized service from a sales associate was “an important factor in determining at which store they chose to shop.” The challenge is that retail as a whole is a lot more complex than the operations in a coffee shop and interactions with your customers don’t always start in the store. So, how do retailers deal with the challenge of offering personalized service in a complex industry with increasingly high customer expectations?
The first step is ensuring you have the right data at the right time. Sticky notes and bulletin boards in back offices won’t cut it with associates who then won’t stay on top of your customers’ digital data. Luckily, technology has provided a number of ways you can capture customer data and put it at the fingertips of your sales team. A solid Customer Relationship Management technology integrated with your in-store retail management software is the best way to track your customers’ activities and I’m not only talking about past purchases. Think birthdays, anniversaries, preferred style and materials, designer, or product line. And if your first response to capturing customer data is that customers won’t like it, think again. According to BRP, 50% of consumers are likely to allow retailers to save their data if it allows for more personalized offers and eases the checkout process.
Once you have the technology in place, the second step is to figure out how best to use that data you collect. The data should inform your team of as much of the customer interaction as possible, since if the data already exists, the customer should at this point be known and should have relevant products presented to them. Following the in-store activity, does the sales associate know to follow up with the customer when new stock arrives, which matches the customers’ captured preference? Again technology can help here, with a system that automates outreach activities to sales associates. For instance, what if a retail technology sent out a notification to contact Jane — a preferred customer at a jewelry store who loves rose gold — when any new items in rose gold come into the store. Imagine how important Jane would feel getting a personalized outreach message from the sales associate with a message that a product she would love is in stock! And according to the Sitel Group, 65% of millennials say it’s important to receive personalized communication over email, chat, or other forms of communication. So by keeping in touch, your keeping customers happy.
Seamless Cross-Channel Customer Journeys
One of the reasons it’s critical to use technology to track your customer’s activities is that the path to purchase now traverses online and offline, now more than ever. 70% of consumers have researched products online before making a purchase. Why? Because online, customers can find any product they want, complete with prices, any promotions, ratings, reviews, full specs, etc. before making a purchase — one they may even make in-store. The challenge for retailers is ensuring that what the customer sees online, he or she should be able to access in the store. Your customers will expect the prices and products that they see online to be consistent with what they see in-store. One way to ensure this consistency across channels is to open lines of communication between your e-commerce site and your in-store team. For example, any price or product changes online should be reflected in-store, especially since it’s more than likely that your customer will see both during their shopping journey. This means information should be accessible real-time and across all technology platforms that manage online and in-store activities. The movement to these unified commerce platforms is gaining traction, with 94% of retailers stating they have already implemented or plan to implement, a unified commerce platform within three years.
Another challenge is the limited in-store stock vs unlimited inventory accessible online. To address this, an endless aisle technology is a great tool to virtually extend your in-store product catalog. If your customer is looking at a particular line of products and isn’t finding exactly what he or she wants, your store associate can present your endless aisle tablet and show other products that are available from the same or similar collections. The customer may be able to find these products online themselves, but should also have full access to these products in the store, given the shifting customer expectations to have full visibility into product availability in store as well as online.
One of the ways specialty retailers are evolving is by transforming their store into a destination for the community they serve. Retailers recognize that their store has to offer more than just convenience since online shopping will always be a more convenient way to shop. In the face of the “retail apocalypse,” which really is just a retail evolution, retailers are now coming up with innovative ways to attract customers to the store through not only their products but also through the in-store experience they offer. Think napping pods in mattress stores, in-store events to demo new products or teach customers about hidden features, and personal stylist consultations for apparel stores. Indigo, a Canadian book store chain, has been redesigning their stores to offer a premium in-store experience and has aligned this revolutionized retail experience with their product offerings. Their kid’s book section was redesigned to have wider aisles to fit strollers and more tables and chairs for parents and kids to sit down and read. It has become a destination for parents like me to take their kids on a rainy day.
A consideration for retailers is the community the individual store serves. What kind of community is the store located in and what are the needs of the customers in that community? Customers in a dense urban commercial area may be looking for a different experience than would customers in a suburban or small-town community.
There is an emerging trend where retailers are starting to fine-tune their product catalog to the immediate community around them. Given the focus retailers have on offering personalized service in their customer engagement, as well as in their in-store experience at the community level, it shouldn’t be a surprise that the products a store offers should also be tailored to the customers in the said community. Customers no longer want to engage with stores that are duplicates of the flagship retail store that may be located thousands of miles away. As every community is different, so should the store and its selection of products. Remembering that customers highly value personalized recommendations from retailers, the in-store product offerings should reflect those personalized recommendations a customer would see online. Technologies like endless aisle and drop ship solutions minimize the risk of not carrying stock that would suit every customer while still offering what their locals would purchase. This inventory strategy is proven to work and according to a recent report, retailers engaging in “localization” of inventory are able to sell more merchandise and at higher profit margins. And what retailer doesn’t want that?
In order to get to reach this new standard, businesses need a robust inventory management system, coupled with reporting and analytics, to track what items are sold at which store location. This reporting should include what’s sold through any interactive touchscreens or mobile POS systems since these may give way to show trends per location. But we must not forget that customer preferences shift over time so it’s important that these analytics be reported on at regular intervals, so the retailer can keep on top of the latest trends.
Retailers who stay in the know and on top of trends will be able to provide more personalized purchase journey in terms of their customer service, their in-store experience, and their inventory. Your customers not only want this, but they have also come to expect it. With the right technology and processes in practice, you are sure to surprise and delight each shopper that enters your store.
Want to learn more about how to use personalization as a tool to satisfy customers during their shopping journey? Download this free whitepaper and you’ll have everything you need to get started.