Although only 2% of household goods are bought online and 8% of all goods are bought online, shoppers continue to find more reasons to skip their trip to the store and shop on their favorite e-Commerce site.
In a presentation during the 2017 Retail Innovation Conference, Josh Wais, Emerging Technology and Strategy Lead at Jet.com, shared five key takeaways he felt retailers must follow if they want to survive and thrive in the midst of these constantly shifting consumer preferences.
1. Go Where Others Aren’t
“In the past, location was that,” Wais said. “We could have region differences in our footprint and we wouldn’t be competing with others. Today it has to be through your value proposition and the role that you fit in the lives of your customers. You have to think about how that’s unique, and how that’s going to serve not everyone, but your particular customers in a way that they’re going to choose you rather than one-click away choosing someone else.”
Moosejaw, whose marketing efforts are led by another RIC presenter, CMO Dan Pingree, is a great example of a brand leveraging its own content to distance itself as a brand and be the “most fun outdoor retailer on the planet.” Pingree noted that beyond the silly marketing campaigns, Moosejaw has even hosted its own Valentine’s Day “break-up service” where customers can ask a rep to call their significant other and end the relationship for them, showing that the company has a unique and quirky, yet relatable, sense of humor.
“There’s always been a lot of talk about experience since it’s a fairly obvious one,” Wais noted. “What’s different now, is that you didn’t have to compete with experience. Your experience could frankly be pretty poor and you’d still be okay.”
Luxury retailer Forty Five Ten has several boutique destinations in the Dallas area, most recently opening a flagship that includes lounges for charging electronics, a fine-dining restaurant called Mirador, a champagne bar known as Copper Bar and even a small book store, as well as pitchers of ice tea on every floor. With luxury retail certainly in flux as consumers prefer to buy less products and spend more on experience, Forty Five Ten aims to showcase the type of location that convinces shoppers to spend a day trip.
3. Try To Capture The Entire Lifeline Of The Customer, Rather Than One Transaction.
“You might lose money on your first transaction, but it’s worth it if you can get that customer to keep coming back, because that’s going to be the new normal,” Wais said.
Starbucks arguably does this better than any retailer out there. The coffee giant’s loyalty program membership has grown 11% year-over-year, with rewards representing 36% of Q2 U.S. company-operated sales. The brand takes all the right steps to stay top-of-mind to the consumer beyond the in-store purchase, enabling loyalty members to collect Starbucks Rewards stars for buying K-cups and ready-to-drink coffees at the supermarket.
Since last year, Starbucks has more than tripled the number of products eligible for its loyalty program, giving its most faithful customers more opportunities to redeem coffee, food and merchandise within Starbucks cafes.
“For the type of purchases we talk about that online has traditionally been for such as electronics, fast is great,” Wais said. “But as all categories start to move online, fast isn’t always necessarily what you need, and fast is really expensive. We’re going to hear more about blended fulfillment; being able to use traditional online methods with in-store methods to be able to do pickup, or even have a store hand it off to an Uber driver that can take it to your house.”
Target has made headlines recently with the announcement of its Target Restock next-day home delivery service pilot launch in Minneapolis, illustrating that the brand is raring to take on major competitors Amazon and Walmart. Household items, personal products and dry goods are all included in the service.
With investments in its Cartwheel mobile couponing app and REDcard loyalty program, the retailer already has a significant customer database to build out the Restock program, and it’s 1,800+ stores give it the built-in infrastructure necessary to scale appropriately. But it will be critical for the brand to convey a transparent pricing model if it wants to sniff the success of Prime.
5. Act Early
“There’s a lot of chaos, but there’s a lot of upending that’s going on,” Wais said. “In that, this is the opportunity to start going in and seizing customers and getting them to start shopping with you, and keep shopping with you. But if you don’t do it now, you are going to have to pay a lot more to acquire those customers and to invest in your experiences that will lead to repeat customers later on. Even though it’s always scary to invest a lot of money, if there’s a time to do it, now is the time.”
With these five steps in mind, Wais closed out his presentation with a clear message: today is not a time for complacency. Brands have to invest in innovation if they want to avoid the pitfalls many of their contemporaries have already experience.