Top 5 challenges retailers are facing when adapting to the new normal

Retail has always been a fast-moving sector, but the retail future that many of us predicted has suddenly arrived in our present very quickly.  Last year’s COVID-induced restrictions forced consumers to adapt their shopping habits overnight, and ‘Couch Commerce’ quickly became the norm for a whole range of sectors.  The resounding message for retailers was loud and clear; it was time to re-evaluate their routes to market and quickly.

The question many businesses are now asking is whether the move towards online shopping is here to stay? The overwhelming evidence suggests it is. In 2020, according to Statista, 50% of customers shopped online for products they’d only ever bought in shops before and a recent study by Mintel found that 90% of current grocery shoppers plan to keep shopping online. Only 5% stated that they would stop.

So what does this mean for retailers today? How do they continue not just to survive but thrive, and what technologies should they be looking to invest in to stay competitive and maximise their success?

Challenge #1.  Ensuring a seamless and superior commerce experience.

For owners of bricks and mortar operations, the big question is how do they maintain their profitability when footfall and physical transactions are in decline. 

Faced with such a stark dilemma, they’ll need to reimagine the role of the physical shop and merge both online and offline operations to offer customers the most appropriate means of purchase.  This may involve migrating their business rapidly into an e-commerce operation or eliminating lost sales in-store by integrating digital access to their customer touchpoints, enabling customers to order from an unlimited product range when stock isn’t available.

And retailers who are fortunate enough to have their business models already firmly established in the digital world will need to up their game to stay competitive and maximise their market share.   To do so, they might need to streamline their order processes, optimise the shopping experience through smarter and faster shipping, elevate their sales output and increase their conversion rates.

For both types of organisations, whether entering into a new e-commerce era or simply making an existing one more efficient, getting the right toolset like Commerce Cloud is important, but the greater challenge is building a technical team and the processes to support a business’s digital transformation. 

Challenge #2   Building a marketing function that can multitask like never before.

More channels to choose from gives retailers a chance to reach a much larger and geographically unlimited audience, but it also creates additional complexity. 

Digital marketing channels have seen exponential growth over the last 18 months, but it is becoming more difficult to find new customers and manage campaigns across a growing number of communities, social media channels and advertising networks. 

Brands are looking to new solutions such as the Advertising Studio from the Marketing Cloud, enabling brands to manage their display, social and search activity from a single integrated platform. It allows marketers to visualise, monitor, report on specific advertising performance and, most importantly, adapt in real-time, enabling brands to reach shoppers with the right offer, and the right time in the right place.  Operating as a powerful acquisition tool, it can also help identify prospects using lookalikes and re-engage inactive users within the customer journey across digital advertising.

Chee Ho Wan, Business Director at Trigg, says, “What we are finding is that clients are struggling to break even on the first click conversion, so are looking at the lifetime value of those customers to get a return on investment. Understanding the value of each customer through using AI and data science is an enabler to quickly decipher this data puzzle. That is where integrated solutions are really powerful.”

Challenge #3:  Making every customer interaction one that counts.

Technological advances have augmented our ability to personalise marketing messages. Right person, right place, right time has never been easier. But in an increasingly fragmented market, both in media and some would say in society; personalisation is becoming more important. 

Perhaps, rather than think ‘personal’, we should think about relevancy, and by doing that, open our thinking to what is relevant, not just personally but culturally and contextually. 

These factors all have an impact on how messages are both received and acted upon. A solution like Interaction Studio, which adopts AI technology, can help here. By allowing marketers to gain in-depth insights into individual customer behaviour, enabling websites to deliver personalised content and drive relevant customer experiences across all touchpoints in real-time to make true 1:1 engagement a reality.

Challenge #4.  Building a loyal customer base to create a profitable business model.

Consumers have always been fickle creatures, but with so much choice and information available, driving advocacy and maintaining loyalty is increasingly challenging. And yet everyone knows that it’s repeat business that drives the real bottom-line forwards.

To be profitable, retailers need to invest in brand activity and rethink the value exchange they offer customers in return for their subsequent purchases. 

Developing truly successful loyalty programmes means identifying customer behaviour patterns and providing offers that meet or even exceed their expectations. 

Integrated Loyalty Management solutions allow marketers to create a single customer viewpoint that enables personalisation at scale and allows your loyalty programme to be a strategic business driver by integrating it into every customer touchpoint. Most functionality across loyalty platform systems are fairly standard, so there is little value in reinventing the wheel.

In conclusion

Ultimately the real challenge for retailers now is that the battle for customers has become increasingly democratised. The increasing customer expectations in terms of service, personalisation and availability have been met with new complexities in marketing and e-commerce, with retailers also needing to transform their supply chain and operations to meet demand. 

The retailers that will thrive in this more fluid world of commerce will be the ones that use technology to understand and meet their customers where they are and not where they would like them to be.