As Customer Demands Continue To Evolve, Retailers Must Rethink Their Technology Capabilities
By Yuval Ben Itzhak, Emplifi
The events of 2020 forever changed how big box stores connect with shoppers, requiring a whole new reliance on technology capabilities to keep pace and meet the growing expectations of their customers.
The retail landscape has undergone a massive transformation since the start of 2020, forever changing how consumers shop and buy from big box stores. By the height of the pandemic, U.S. shoppers were forced to embrace digital channels, rapidly adopting entirely new ways to purchase everything from groceries and household items to beauty supplies, clothes, and specialty items.
The staggering e-commerce growth we witnessed last year did more than break records, it set a new threshold for big box stores in terms of how the customer experience plays out throughout the customer journey. Industry analysts report retailers will continue to see major e-commerce gains, with eMarketer forecasting social commerce sales to climb 35.8% this year, reaching $36.62 billion by the end of 2021.
“We expect behaviors like click-and-collect usage will continue to grow, reaching $140.96 billion in sales by 2024,” reports eMarketer. The research firm forecasts online purchases for food and beverage and health and personal care products to grow more than 20% this year.
What does this mean for big box stores as we move into the future? The evidence is clear: Retailers of all sizes are now operating in a whole new world of e-commerce where the consumer demand for speed and convenience is central to the shopping experience.
The Ongoing Impact Of Rapid Digital Transformation
During an NRF session earlier this year, Walmart CMO Janey Whiteside underscored just how quickly things changed for the brand in 2020.
“We saw five years of projected growth in pickup and delivery in five weeks,” said Whiteside, “In the first quarter of last year, we saw a 300 percent increase in services like pickup and delivery.”
In response to the massive and sudden increases in pickup and delivery requests caused by the pandemic, Walmart launched an Expressed Delivery service that aimed to deliver purchases to customers in under two hours.
Walmart is by no means alone when it comes to rapidly scaled digital transformation efforts. As recently as August, Target reported customers chose same-day services for more than 50% of digital sales. The company’s second-quarter results for 2021 showed that Target’s Drive Up offering, which allows customers to order online or in the Target app and receive orders via curbside delivery services, saw an 80% growth rate last quarter and that was after more than a 700% growth rate in Q2 of 2020.
It’s not just pick-up and delivery services big box stores are having to embrace — more and more consumers are turning to social platforms to browse products, make purchases, and even resolve customer issues. Consumer behaviors that once upon a time belonged only to younger demographics are now spreading across generational divides as shoppers of all ages recognize the advantages of online shopping. As a result, consumers are making significant changes to their shopping habits. For big box stores, this means wholly new levels of customer demands across all audience segments.
Retailers Must Meet Customers Wherever They Are ... And As Fast As They Can
The most successful retailers can address customer demands and provide unique shopping experiences, meeting customers wherever they choose to interact. Whether a shopper opts for a traditional in-store shopping experience, buys online, or takes advantage of a store’s click-and-collect services, big box stores must ease the purchasing process regardless of the consumer’s path to purchase.
Consumers not only want to engage with brands on their own terms, channels, and devices, they want brands to offer elevated levels of speed and convenience regardless of how they interact with the brand. McKinsey’s findings highlight just how important meeting customer demand is in this new world of e-commerce, reporting that, “The race to shorten click-to-customer cycle time is arguably the single greatest influence on the shape of future omni-channel supply chains.”
The major challenge brands now face is meeting the ongoing changes in customer demands, and not just between audience segments, but for every individual customer. Customers may make separate purchases across devices or shop in-store one day and online the next. And while brands have long debated just how much time and money should go to digital efforts, analytics platforms, and social media marketing, there’s no argument that the brands with bigger digital footprints are far more likely to win shoppers and maintain customer loyalty.
Retailers who fail to understand their customers and lack any deep insights on the type of content that best resonates with their audiences are not fully leveraging their digital marketing capabilities — or, worse, they are investing in the wrong marketing technology solutions.
It’s no longer enough to deliver targeted advertising across social platforms. Brands need tools that allow them to have a deep understanding of the personas that make up their audience segments so that they can serve up the right content, at the right time, and on the right channel.
The Customer Experience: It’s Only As Good As The Technology That Supports It
The question many big box retailers currently face: How to maximize impact and get the most out of their marketing spend when the demand for ad space is quickly outpacing their audience’s attention span. The reality is, as consumer attention spans shrink, the number of online shopping options is vastly expanding. Retailers are continuing to shift their budgets from traditional advertising investments to social media advertising opportunities across major platforms like Facebook, Instagram, Twitter, Pinterest, and Snapchat. And while digital advertising is a crucial component of retail success, it is by no means the only factor.
To bring speed and convenience to the shopping experience, big box stores must reconsider all aspects of their digital footprint. They need marketing technology that can help them integrate digital advertising capabilities with their social commerce and customer care efforts.
The End Goal Is Still The Same: Give Customers What They Want
For big box stores, the goal should be to create a streamlined customer experience journey that appears seamless to the shopper, no matter what channel they are using or what shopping experience they choose.
Along with social media marketing solutions and advertising tech, retailers need a voice of customer tools that give brands deeper insights on customer needs, advanced analytics that connect consumer behaviors with transactional data, and AI-powered chatbots that address both quick customer queries and more complex customer issues, routing a call to a live agent when necessary.
One of the biggest lessons retailers learned last year was that consumer behavior can change overnight. People who had previously never bought one item via an app quickly became regular online shoppers, and they weren’t happy with limited options. They wanted curbside deliveries, BOPIS services, and customer service capabilities via every channel.
Customer demands will continue to evolve at a rapid pace. But the one thing that will not change: An exceptional customer experience, from the first touchpoint through the post-purchase experience, will only be as successful as the technology that powers it. The retailers that can give customers what they want will remain the biggest winners.
About The Author
Yuval Ben-Itzhak has more than twenty years of technology and business experience as an entrepreneur, senior executive, and executive leader. He’s worked as a Chief Technology Officer at fast-growing companies in the mobile, security, AdTech, and cloud services markets. Yuval often speaks as a thought leader on the future of mobile, security, privacy, consumer dynamics, and disruptive innovation.