Understanding consumer behaviors will be key to building (or rebuilding) a successful retail business in a post-pandemic world. However, retail marketers often lack the data they need to develop and execute more empathetic messaging. This data deficit makes it difficult for marketing to keep pace with a rapidly changing environment.
Data will fuel the shift to digital, according to expert contributors to the recent Retail TouchPoints (RTP) webinar, Analyzing The Shift To Digital From 7,000 Marketers And 1B Consumers Worldwide. Panelists shared insights from the Salesforce Shopping Index, which collected responses from more than one billion consumers worldwide, and the annual Sixth Edition: State of Marketing Report, which was released this May.
Retailer priorities have shifted slightly since the last State of Marketing report, according to panelist Megan Hostetler, a Salesforce Product Marketing Manager focused on Retail and Consumer Goods. “Last year the top priority was engaging customers in real time. That was bumped to number two, and innovation is at the top this year.”
Priorities may be changing, but retailers still need to provide a superior customer experience, added webinar panelist Caila Schwartz, Senior Industry Strategist at Salesforce Commerce Cloud. She noted that 79% of global marketing leaders co-own or co-lead customer experience on behalf of their brands, up from 45% in the previous State of Marketing report. “Marketers are really at the forefront of this transformation,” Schwartz said.
Other takeaways from the webcast include:
- With foot traffic at a near standstill, there was a 71% year-over-year growth of new digital shoppers in Q2;
- The ability to analyze performance in real time is a key differentiator of top retail marketers compared to their peers;
- Consumers want a personalized experience, but they don’t always trust how retailers are using their data; and
- Digital is projected to account for 30% of sales during the upcoming holiday season, up from 14% in 2019.
AI Leading The Transformation
Artificial intelligence (AI) is a critical component of successful digital and customer transformation. The use of AI by marketers globally has increased by 186% since the 2019 State of Marketing report. “It allows us to scale this personalization and generate insights in a way that we may not be able to do ourselves,” Schwartz said.
The pandemic has accelerated the shift to digital, especially in the world of retail and commerce, Schwartz added. “In a normal period, what we typically see is about 85% of retail sales coming from brick-and-mortar, and about 15% of retail sales coming from digital. But since the onset of the pandemic, we’ve seen a massive shift, as foot traffic flatlined and consumers turned to digital channels to buy essential and nonessential goods.”
That seismic shift included a significant influx of first-time digital shoppers. “In Q1 there was a 40% increase year-over-year in net new digital shoppers, so consumers from all generations are seeing the value of digital,” said Schwartz. “In Q2, we saw a 71% year-over-year growth.”
Successful retail marketers are embedding their brands within the platforms and devices that are most popular with their customers. Social commerce, engaging customers through influencers and shoppable posts are a few of the strategies being used by top retailers. “We’re seeing an influx of gaming platforms and brands embedding themselves within those platforms,” according to Schwartz.
Given the proliferation of shopping platforms, retail marketers are striving to make the checkout experience easy. Mobile phones are still the number-one device for driving traffic, which requires retailers to embed “intelligent experiences throughout the journey, including checkout,” Schwartz noted.
Creating A Frictionless Experience That Lasts
Many of the digital preferences that consumers exhibited during COVID-19 are going to remain in place even as stores reopen. “What we know from our history of reporting on trends is that whenever there is a new surge in digital, there’s always a new digital baseline,” said Schwartz. “Even when stores reopen, we’re really never going to be in that place of normal again.”
How are brands communicating in this new normal? A retailer’s web site “remains a main channel, which of course isn’t surprising,” said Hostetler. “We also see mobile messaging continue to rise and be an important channel, as well as influencer marketing. This was actually the first year that ‘influencer as a communication channel’ showed up in the Top 10.”
Many marketers are looking to add significantly to their technology stack and their ability to manage and analyze data. Hostetler noted that the top data sources used by marketers are transactional data, as well as knowing digital identities such as email addresses, social ID and phone number. “The challenge is reconciling data from all of the identities and applications in the tech stack,” she added.
“Currently, only 35% of respondents were satisfied with their data management capabilities,” Hostetler said, noting that only 28% are satisfied in their ability to manage data against their personalization efforts. “If you want to be a high performer, it is important to figure out what your customer data management looks like and how you can be empathetic to your customers. The goal is to be clever without being creepy.”
Nearly three-quarters (72%) of top performers can analyze performance in real time versus 49% of underperformers, according to the State of Marketing report. The number of metrics that marketers are tracking goes well beyond ROI on specific campaigns. “They’re measuring down to the channel level,” Hostetler said.
Consumers have to be comfortable with how their data is being used, Schwartz noted: 63% of consumers say that they don’t think that companies are using their data transparently, and 55% say that retailers don’t use their data for the benefit of customers. “We’re seeing what we’re calling a personalization paradox,” said Schwartz. “Consumers are telling us they want personalization that provides highly relevant and connected shopping experiences. But ultimately what they’re saying is they also don’t trust the way that companies are using their data.”
The webinar wrapped up with predictions about the upcoming holiday season:
- 30% of retail holiday sales will come from a digital channel, compared to 14% the previous year.
- 10% of the total revenue typically generated during Cyber Week will shift to October.
- 700 million packages across the world— orders placed between Cyber Week and Christmas — are at risk of being delayed.
- Stores will be critical again this year, but more as fulfillment centers providing curbside pickup, BOPIS or other contactless transactions.
- There’s a massive shift to personalization localization: 85% of consumers say that they find operational updates and messages important, almost critical, during this time.
Click here to view the webinar on-demand.