By: Roger Sowerbutts, Global VP, Go Instore
Retail as we know it has changed. What once was an industry dominated by high streets is now a vast market with multiple channels, including e-commerce, an increased focus on customer experience as well as loyalty. This has been somewhat influenced by the pandemic, but consumers had been moving away from stores for some time before they were forced to close in March 2020. As we emerge from the pandemic, many are asking what’s next for the future of retail?
This question isn’t limited to one answer. The future of retail is vast and is set to provide retailers with a wealth of opportunities for growth and sales. From an adoption of more technology to rethinking the way we view fulfilment; retail can be revolutionised if retailers are willing to act and think more strategically about consumer behaviour.
Continued enhancements to eCommerce strategies
Many retailers have prioritised their digital strategy over recent years, and it has paid off. Those retailers who have steered clear of an e-commerce strategy have either gone out of business or lost vast sums of money and market share.
The customer of today and tomorrow is looking for better service and a more personalised experience than simply clicking and adding to their cart. People are also wise to chatbots and in general don’t like them. Customers want to be guided across their more considered purchasing journeys by a knowledgeable human being to ensure they feel connected to a brand and its products.
Retailers are expanding their innovations as consumer demands change. According to a report from Cognizant, retail executives plan to hike their investment in technology by 50% between now and 2023. Keeping an eye on innovation and having the agility and flexibility to respond to changing demands will be key for the future of retail as the consumer continues to drive how the industry looks.
This response may be through investing further in digital initiatives or finding a balance between in-store and online, but retailers certainly aren’t finished in their strives for reinvigoration. A crucial part of these digital investment strategies will be the ability to predict and deliver strong ROI and show increased customer satisfaction and loyalty.
Live video reaches new levels
With this increased focus on customer demands comes increased attention and scrutiny on the customer experience. Retailers must implement the right tools to create better experiences for every customer and make online shopping as engaging and experience led as possible. Many tools such as chat bots do not support an engaging experience for customers.
Through live video, customers can instantly connect with their favourite retailers from the comfort of their own home by using features like one-to-one video consultations to receive personalised advice and product recommendations with a live advisor. This creates a connection between brand and consumer and allows the customer to truly understand the products. It also gives them the answers they need and the confidence to make that purchase as well as returning again. The connection can then pave the way for future purchases and build a network of brand advocates.
Another use of live video to benefit the customer experience is through livestreaming to connect to hundreds or thousands of potential customers at once across unlimited geographies for things like product launches or promotions.
Customers can ask questions about products and get answers in real-time, improving that brand to customer relationship. The combination of livestreaming with one-to-one live video engagements replicates the entire in-store journey, from tv adverts to window browsing to interacting with an individual product expert, providing the ultimate online experience. This is the real future of joined-up e-commerce and “hybrid” retail.
Live shopping generated $60 billion in global sales in 2019, off the back of still-modest conversion rates (2-4%) and as more retailers see the benefits behind this, we can expect to see this number grow. Live video opens up opportunities for an increased number of sales channels for retailers, but also enhances the experience for customers as they get to feel part of the brand’s community of shoppers as well as a dramatic rise in sales conversions as customers progress through the shopping journey. We see these rates range from 20% to 50%.
The rise of Social Commerce
The future of retail is social. Just like we have seen the popularity of live video and other technologies skyrocket, we can expect to see a huge uptake in social commerce in the next few years. In the US alone, social commerce sales are expected to go grow more than 35% to surpass $36 billion in 2021.
Some of the world’s largest social media companies have branched out into social commerce: Instagram has given small businesses and larger retailers the change to host their sales on their platform and TikTok is hosting live shopping events on its global stage. As more retailers see the advantages social commerce can bring, the trend will become a central part of many digital strategies going forward.
Bringing a social element into the customer journey will allow digital shoppers to connect with their loved ones and shop alongside them, regardless of where they are in the world. Technologies like live video empower this connection, giving customers the opportunity to shop with their family and friends as they would in-store, online.
The next phase of fulfilment
The global supply chain crisis and the international disruption it is causing is leading retailers to turn to the darkstore. The micro-fulfilment and sales centres specialising in fulfiling online orders serve more of a purpose than just a way to ride out the aftershocks of the pandemic. They offer retailers financial savings given that retailers don’t need to secure a prime high street location with astronomical rent.
These ‘stores’ have the option to extend operating hours for more shopper convenience and add in live video to convert shoppers who shop outside normal operating hours. This flexibility of operations also benefits the retailer as they can serve more than one geographical territory at once, supporting different languages, product lines, and time zones. The integration of live video within darkstores allows retailers to reach their full potential with the darkstore.
HP recently opened a darkstore in Barcelona and have incorporated live video to create an entirely virtual store. The tech retailer responded to global consumer demands for more personalised product recommendations at a time that suits them. HP has witnessed that customers spend on average 47% more and have increased customer satisfaction scores than standard online shoppers. The potential for the darkstore is huge and with global brands like HP reaping the rewards, what is stopping others from doing the same?
These trends create new avenues for retailers to explore, but they are all connected and driven by the customer experience. Ensuring every customer has a consistent experience across every touchpoint, whether physical or digital, will be vital for success in the future of retail.
As we look forward to Black Friday, Christmas and 2022, these trends will become even more impactful as more retailers begin to see the benefits and invest in innovation.