Retail industry changes faster than you think – the “new norm” is happening

Over the past two years, retailers, brand owners, and basically most of consumer businesses have set their sights on ecommerce and digitalization. Adidas at 2020 Q2 reported “exceptional growth in online sales” during the quarter seeing sales through its own ecommerce channel jump 93 per cent. Nike put all effort on its own brand website after withdrawing from Amazon, resulting in an 80% year-over-year increase in its ecommerce sales and doubled market capitalization. New brands, such as Brooklinen, used the Internet as leverage to jumpstart their businesses.

Countless buzz words and new ideas are flying around these days. Commercial services have also become crazier than ever. Taking all these into consideration could offer some positive impact on your business. These may even help you improve your performance marketing, grow your number of users, boost your conversion rate, increase your revenue, and lower your cost. However, as leaders of a company, we need to go back to the basics and determine the most suitable strategy that would cater to and prioritize the unique demands of our organizations. Here are some questions we may need to clarify first.  

(Image source: Dr. Dave Chaffey)

1. Who is your customer and what does their customer journey look like? 

After solid definition, think about:

Multichannel but centralized management

  • Watch Tiktok -> Visit the offline retail store and buy the product
  • Check Facebook and see product promotion -> Go Amazon to search and purchase
  • Search Google for certain product -> watch tutorial on Youtube -> Go to brand website to checkout 

All these could be the customer journeys of your target customers, depending on their shopping preferences and how they are guided through the process. Brand owners certainly do not want to miss out on any selling opportunity or channel. However, we need to have a clear picture on which platforms are valuable to us and how to manage these effectively. Glossier recently launched a software as a service (SaaS) platform with subscription to test their new ideas. The beauty company’s initiative provided them with huge benefits on agile and personalized marketing across multiple channels, which were especially valuable during this pandemic.  

Shorten and optimize for each touch point  

Traditionally, marketers believe that consumers would only get an impression of a brand after seeing it four to five times. Only then would they consider making a purchase. However, this has changed in the digital era. Examples that demonstrate this shift in the buyer’s journey can be seen in China’s social commerce practices, which include live streaming and influencer marketing. Nowadays, consumers finalize their decisions to purchase cosmetic products, home appliances, and groceries in a matter of seconds and without even physically checking the items. This shift in consumer behavior demonstrates that the distance between customers and businesses could be just a few clicks away.  

2. What is your value proposition and differentiation that your customer would appreciate? 

After solid definition, think about:

Direct-to-consumer (DTC) with brand value

Brands and merchants must showcase their unique values to attract users and followers. Although a multichannel approach could be useful in reaching more potential customers, a brand that fails to stand out from the competition would only be buried in the marketplace or be forced to participate in a price war. Therefore, it is crucial to have a clear plan on how to communicate the distinct value of your brand and ensure that it resonates with your target consumers’ touch points. For example, a good e-commerce brand website will build your brand story, unique consumer experience, and direct communication to your customers to increase your conversion rate, unit customer value, and retention rate.  [More DTC story]

Data-driven automation 

A consistent user experience triggered by data-driven automation along the customer journey is critical to build differentiation in the consumers’ minds. However, this process can be challenging and could result in the disruption of the working model and coordination among the marketing, content, data analytics, management information system (MIS), operation, and customer service teams. Conversely, it could also be a one-off investment in terms of the integration or change in management of a content management system (CMS), data management platform (DMP), workflow system, personalization settings, and marketing channel integrations.    [More data-driven marketing story]

3. How can you adapt and act fast to make the most out of opportunities?

After solid definition, think about:

Growth team with right technologies

Nowadays, new media, new platform, and new marketing channels pop up quickly. In order to catch up with the trends, it is no longer enough that the growth team only exists in technology firms. It has also become critical in retail and several other businesses to leverage capabilities across different departments to drive growth. As mentioned in the section on data-driven automation, the success of the company involves the collaborative efforts of different teams and systems. Hence, it is critical to establish a team that takes ownership and has a growth mindset to enable the company and every employee to better adapt and grab new opportunities. 

(Image Source: Proship)

It will not be easy to keep brands relevant and continuously growing for years, especially during this fast-changing digitalization era. Thus, I believe that the idea of going back to basics to review these fundamental questions in the context of the new trends is crucial for company leaders. Also, it is necessary to launch and deploy strategic initiatives from a top-down perspective to move the fleet efficiently. 

Further reading:

McKinsey – Adapting to the next normal in retail: The customer experience imperative

Shopify – What is multichannel retailing

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