Who wants to be a retailer in today’s business climate? Black Friday may have delivered some historic sales figures, but with more than 300 other trading days to worry about, there are a raft of persistent challenges to overcome.
Shoppers are in control, the pace of change has reached unprecedented levels and new technology is bringing with it as many challenges as opportunities. On top of that, the purchase journey has changed beyond recognition and the role of the physical store remains under question.
What is clear is that within manufacturing, a subtle yet significant shift is underway. Marketing philosophy is moving closer to retail as traditional models become outdated and shopper-led thinking moves to the forefront of strategy. This has led to much client introspection and information gathering. Yet most retailers have failed to familiarise themselves, much less react, to these emerging insights.
Manufacturers understand that the points of shopper influence go far beyond the store environment. They are fully embracing the connected shopper and the role that social, word-of-mouth and traditional advertising all play in the overall shopper decision-making process.
There is no better example of this than the Share a Coke campaign, which capitalised on the digitally-enabled trend for self-expression and sharing. In April 2013, with little fanfare, the first personalised bottles began appearing in UK stores. As expected, they lit the touch paper of socially-minded shoppers. Within six months, there were 330m impressions on Twitter, nearly 170,000 tweets from 160,000 fans and #ShareaCoke entered popular culture as a trending topic.
The company encouraged the social buzz through clever stunts and consumer stories while rolling out a series of digital initiatives. It’s a communications recipe they repeated when Share a Coke returned this summer. People delighted in sharing personalised virtual Cokes through the brand’s Facebook app, yet the virtual and physical worlds remain deeply connected. Nearly 250,000 real bottles were ordered from the online shop by consumers eager to see their names on Coke’s iconic glass bottle, while 150m personalised standard sales went through the tills in retail.
Smart manufacturers also understand the importance of emotion in influencing shopper behaviour. Retailers are masters at analysing transactional data to deliver against shoppers’ rational decisions, but most have been slow to recognise the importance of emotion in the purchasing process. They know all there is to know about what we want, but little or nothing about why we want it.
Emotional behaviours often trump the kind of rational communications beloved by retailers. A statistic from industry stakeholders POPAI shows that for top-end grocers, only 17% of shoppers note a piece of communication in their line of sight.
Meanwhile, new technology has provided retailers with the opportunity to improve service, engage and convert shoppers. But they face an ongoing challenge to cut through all the hype. For example, much of the talk this year has been around beacon technology and whether it represents the tipping point for the smart mobile shopper. This could be so, but caution needs to be observed with any new tech to ensure there is a clear shopper benefit at its heart. Retailers would be wise to test any such deployments with shopper-marketers first. It has to be self-evident to shoppers that the tech will make their lives easier.
Multi-channel retailers must also be careful not to get sidetracked by the bright lights of digital in which shiny new formats readily emerge. The physical store requires ongoing love and attention, because this is where most shoppers touch the retail brand and where most transactions continue to take place. The store plays the lead role in shaping brand perception as well as conversion, so it’s essential retailers deliver an inspiring, engaging, service-driven environment, whatever sector they operate in.
Part of the solution lies in bringing together smart thinking from both a brand and retail perspective. This collaboration will add something new and dynamic for retailers.
Adrian Thomas is co-founder of Mesh Retail
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