Lori Mitchell-Keller, co-president, SAP Industries
In the past, shopping experiences were a long and tiresome journey, limited to brick-and-mortar stores and narrow inventory selections. What a stark contrast to today, where retailers are racing to catch consumers’ attention on diversified channels—from shoppable Instagram ads to ecommerce shops and physical stores!
As retail paradigms continue shifting toward customer centricity, clear-cut lines between online versus offline and physical versus digital are blurred. In the midst of a retail renaissance, successful retailers are the ones who leverage advanced technologies and initiate business transformations to create personalized shopping experiences with multiple touch points that are seamlessly connected through all channels.
Intelligent technologies, as well as transformed business models, can help retailers analyze online consumer behaviors to reshape offline experiences—and vice versa. With this, retailers are better able to respond to market needs faster with well-informed decisions, creating new revenue streams and business opportunities.
In an environment where consumers are focused on the outcome and experience more than the product itself, this should be a priority for brands and retailers.
The Growing Demand for Outcomes
It has become clear that consumers feel loyal to brands, not products—and they expect to receive long-term outcomes catered to their needs. In the face of these changing expectations, switching the focus from product catalogues to business values can bring retailers long-term, meaningful relationships with consumers.
Netflix, for example, positions its users as stakeholders with a subscription-based business model. The company profits on the condition that their customers receive differentiated services and outcomes in the long run.
The initial step to adopting the outcome-based approach is to understand what the consumer needs. A great illustration of improving brand experience through consumer insights is Under Armour, which analyzes its customer interactions and reviews to improve its shoes for athletic activities.
Another one is Urban Outfitters, which is launching a clothing rental subscription service that offers a better, sustainable solution for subscribers who will be able to rent six items every month. The brand listened to consumer demands and is offering additional, technology-enabled and blended services to accommodate an outcome.
Blending the Lines
Consumers are not looking for a digital experience or a real-world experience. They are simply looking for a seamless shopping experience that bridges the online and offline worlds. To provide it, retailers must embrace emerging technology, think creatively about the services they can uniquely provide, and, most importantly, earn their consumers’ trust to become part of their lives.
While brick-and-mortar stores will always be an integral part of the shopping experience, their function is transforming at a great speed. Turning stores into brand experience centers starts with real-time consumer, product and inventory data across all channels, backed up with automated store processes, empowered front-line sales staff and store interaction.
Companies that are constantly creating new touch points with the shopper for interactive brand experience through smart fitting, fast delivery and instant personification are not only building a unified brand experience, but also loyalty. For example, Jacques’ Wein-Depot, a wine retailer based in Germany, aims to maintain customer loyalty by offering the online and offline integrated services such as, click-and-collect services, easy reservations, and hassle-free returns.
Additionally, companies like Lime Crime, a cosmetics brand that made its name on digital and social media channels, are finding that offering in-store experiences and touch points with consumers provides more value than solely offering products online. This demonstrates how the retail industry has evolved into a no-boundary territory, and this blurring of lines allows new business models and partnerships that are feasible and convenient in the outcome-based ecosystem.
Holistic Personalization
Did you know that even though 73 percent of retailers consider it important to deliver a fun, relevant, and personalized experience that is convenient and unique to customer sentiment, history, and preferences, only 10 percent are able to do so? That says a lot.
Most of the setbacks in creating a personalized shopping experience are caused by the confusion in unifying the brand experience in multiple channels. In order to achieve a seamless shopping experience, retailers need data management platforms that can build holistic customer profiles encompassing both online and offline behavioral traits. Offering individualization while being transparent about the customer’s data is a key enabler in elevating customer engagement.
A good example here is Tommy Bahama. It is constantly innovating its brand experience across all channels, from online apparel to in-store furniture and incorporated restaurants, to enable consumer interaction with the brand whenever and wherever—offering a lifestyle rather than focusing on individual products. Using intelligent technologies, Tommy Bahama is able to craft personalized suggestions for their customers based on their location and holistic purchase history.
The Consumer is the Stakeholder
As lines blur between online and offline and from one industry to another so quickly, it is vital to position the consumer as the stakeholder and deliver differentiated services across all channels. From blended to personalized brand experiences, shoppers feel loyal to the brands that are bringing long-term outcomes, rather than short-term products.
That’s why the winners in the retail landscape of the future will be companies who are truly open to new ways of thinking and radical innovation. The imperative for a holistic view of online and offline consumer behavior in order to reshape experiences is essential to future growth. From crafting a personalized customer experience on the fly to helping business users make informed, real-time decisions, retailers need to instantly connect historical and transactional data across the enterprise.
SAP Industries is a consulting unit of SAP SE, one of the world’s largest business software companies.
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