At the Digiday Retail Summit that took place in Texas in February, retail marketers came together to brainstorm around how the industry can address the issues facing– and threatening– their businesses. And there are quite a few. From changing consumer behavior to how to use First-Party Data while staying compliant and Amazon’s dominance of the e-commerce versus physical word approach.
As an attendee, I listened to the executives explain what’s keeping them up at night and thought about how we can best address these concerns as an advertising industry.
The overall concern and theme was the need for retailers to adopt an omnichannel approach, finding the right mix and balance of both e-commerce and in-store strategies and tactics, to target and engage with consumers. Although Amazon is clearly owning the lion share of retail e-commerce sales, more than 94% of total retail sales are still generated in-store. While obviously, brands can’t ignore the rise of e-commerce, the physical world shouldn’t be forgotten either. As Tomorrowland called it, retailers need to implement a “phygital” approach combining e-commerce with in-store.
Lessons from Digiday Retail Summit
How Can Retailers Best Implement This “Phygital” Omnichannel Approach?
Although there are many channels available, many consumers stick to a select few. Depending on where a retailer’s target audience is spending time, that channel should be a focus. For instance, according to Criteo, shopping apps generate 3x the conversion rates of the mobile web.
Why is that?
According to a report from eMarketer, the US adults spend almost two hours a day using apps on their smartphones but only surf the mobile web on their phones for 19 minutes a day. This means that marketers do need to focus on in-app retail marketing for the best chance of viewability.
But you can’t trust that consumers will stay on one channel. In this digital age, customers expect to start their customer journey to purchase in one place and continue it seamlessly on another device or store location. In fact, the consumer often arrives at the store informed and close to purchasing. This not only means retailers should be serving content before they walk into the store, but that they need to bring consistency and convenience across the customer journey–no matter the channel.
The ultimate goal for retail brands competing with Amazon is to bring that convenience obtained from e-commerce to the physical store. Implementing things like click-and-collect and deliver-to-home will help brick-and-mortar environments succeed. Furthermore, customers are increasingly expecting a more personalized and engaging shopping experience.
In fact, 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchases, OR knows their purchase history. This means retailers need to start offering services like having customer shopping carts and search history on the site accessible to salespeople to deliver a connected online-to-offline experience for customers.
In short, the best way to provide that seamless transition, in which consumers can pick up where they left off on the customer journey, is to ensure data is accurate across channels. Brands need to know that a customer identified on one device is the same person as the other and be sure that that individual has viewed and consumed the content previously shared so that the brands pick up the conversation where the customer left off.
Unsurprisingly, much of this responsibility falls on the advertisers. Brands deserve accurate data with verifiable value. There needs to be a standard in the quality of data used. Inconsistencies across agencies and brands cause confusion and frustration as can be seen from the conversations at the event. We as an industry, need to be better about self-policing and standardizing, to ensure we can continue to flourish and provide value to retailers.
With the rise of Amazon and e-commerce, the retail sector is at a turning point, retailers are either going to be the disrupter or get disrupted. According to Criteo, omnichannel customers generate 27% of all sales despite representing just seven percent of customers. Adapting efforts to omnichannel– offline and online– is no longer optional, it’s a do or die situation for retailers.