The changing tides of online retail and how to embrace an evolving landscape
By Dan Conboy, eCommerce Strategy Director at idhl
The retail market can feel unpredictable. With tough competition, continuously evolving technology to both understand and harness, and consumers who have ever increasing expectations – it’s no wonder that retailers are often overwhelmed when planning their online strategy.
While there’s no magic formula for success and every roadmap will look a little different, there are key trends within the space that businesses should be tapping into. Here are five things we think eCommerce retailers should keep their eye on as we head into Q2.
1) Artificial intelligence and augmented reality
Of course, no eCommerce article would be complete without this – but hear me out! You’d be hard-pressed to find a sector that isn’t talking about artificial intelligence (AI) and eCommerce is no different. AI tools, when used thoughtfully, can enhance customer experience, taking personalisation to the next level. Whether it’s used to simplify your search and merchandising or provide customer support through intelligent chat bots, AI can help elevate the frontend of a store and improve the customer journey.
Alongside delivering a best-in-class user experience, AI works behind the scenes to increase operational efficiency. Allowing processes to become automated, harnessing AI enables businesses to pivot their time and attention to other key areas – a key opportunity for time constrained retailers with lean teams.
Creating unique and memorable experiences for the user is also important, making augmented reality (AR) a great addition to a website. AR enables customers to take the visualisation of a product to the next level, with the ability to ‘try-on’ products or overlay them into an environment. This is a great addition for testing products that are typically suited to an in-person retail experience, such as furniture and make up.
The key takeaway is that AI & AR can bring benefits to the eCommerce landscape, both at the front end and admin side, but – as always – should be seen as additive to the baseline of delivering a great customer experience. The advice remains to focus intently on the fundaments first.
2) Understanding the power of in-person retail
People have always enjoyed the experience of shopping and while the high street has changed over the years, the importance of physical stores shouldn’t be underestimated. The landscape has undoubtedly evolved but in-person shopping still holds value, when done right. 73 percent of retail is still offline and stores can be a powerful driver to support both retention but also new customer acquisition.
Many retailers who have successfully tapped into the power of a physical store have done so by creating experiential shopping. Instead of offering just another store, brands are creating memorable experiences through interactive displays, additional offerings such as coffee shops, and more curated product inventory. Great examples of newer retailers implementing successful strategies are Gymshark, ON and Lounge – all of which have developed strategic plans to launch stores that add value to their proposition. There are also more flexible approaches – paint brand Lick recently announced a partnership with B&Q to provide an interactive shopping experience in some of their stores.
Ensuring consistency across all channels, digital and physical, is vital to creating a seamless customer journey with your brand. This can involve ensuring unification of systems to create a single customer view – this can be enabled through utilising functionality such as Shopify’s POS solution – Shopify calls this ‘unified commerce’. This provision allows brands to better capture data on buying behaviour which ultimately allows them to better personalise and serve the customer. Aligning your messaging across the board is importance to ensure a harmonious experience for your audience – no matter where they interact with you.
3) Loyalty and customer retention
It’s widely accepted that retaining customers is cheaper than acquiring new ones. But with consumers more fickle than ever before, how can you increase their loyalty and retention? Keeping the all-important customer happy isn’t as simple as just putting out good products and reaping the rewards, businesses must work hard to entice and retain them.
Loyalty schemes play a pivotal role in keeping your audience coming back for more. There are a multitude of different platforms available to utilise but simply having a loyalty programme isn’t enough. When implementing a loyalty scheme, consider what you’re trying to achieve, what incentives you can offer and how you can provide customers with a reward system that will keep them coming back time and time again.
Ultimately it’s about going ‘beyond points’ – listening to customers, understanding what they want from a loyalty or membership proposition and designing around these principals.
4) Embrace marketplaces
In a changing environment, retailers need to tap into new revenue streams. A rising trend over recent years is the increased implementation of marketplaces on brand websites. Big names such as Superdrug and B&Q have introduced their own marketplaces bringing in a wider variety of suppliers and in doing so, have seen great results.
What are the main benefits? Marketplaces can increase product range – which can boost both traffic to the site (through both organic and paid channels) and serve to increase customer average order values – both through capturing sales that may not have occurred (if the product wasn’t stocked by the brand) and also through the potential of increasing basket size by the customer being able to add more products to their basket.
As well as benefiting overall visibility, marketplaces make a site more attractive to prospects. With more options available in one place, consumers are less likely to visit another online store to make their purchase. After all, it’s more efficient to get all your shopping done in one place, potentially saving additional delivery costs and other fees.
5) Be more than just another brand online
There are oodles of businesses online, what makes yours unique? With so much competition and choice, it’s important to tap into what makes you special and why a consumer should pick you over the abundance of other brands online.
Thinking beyond ROAS and a pure focus on targets, it’s beneficial to approach things holistically. Understanding the value of your brand, as well as your revenue targets, will only serve to help you succeed online. By creating a community within your brand, you’re making something that goes beyond just your products and, in turn, building more than just another online business.
Gymshark, Represent, NEOM, ON, Huel: these are all brands, across different sectors, which cultivate strong and meaningful communities that support both loyalty and advocacy.
People buy into people, engage with meaningful stories, and like to feel like they’re part of something. By leaning into this, you can forge more meaningful relationships with your customers, with a whole heap of long-term benefits for your brand.
A happy customer never goes out of style
The retail world is constantly changing. Keeping up can feel like a daunting task but the one constant in the eCommerce world is the customer. When looking at your year ahead and considering which trends to follow or what action to take, put your audience at the forefront of your decisions and move forward with this in mind. From AI and loyalty to marketplaces and building a brand, make sure delivering the best customer experience underpins every move you make. Want to know a little more about eCommerce throughout 2024? Check out this comprehensive guide that covers all these topics and more.
To find out how idhl can help your retail operation, visit them here or connect with Dan here.
