With Valentine’s Day hot on the heels of Chinese New Year – itself coming about a month after Christmas – there have been and will be great opportunities for retailers to capture the gift-giving market. Yet, it’s been well publicized that the retail industry is flagging, with data showing that the average vacancy rate of suburban malls, has doubled from less than 1 per cent in 2013 to 2.4 per cent in the fourth quarter of 2016.
The problem is that we’re no longer in an era of business as usual. Retailers cannot employ the same tactics which have worked for years and expect customers to come flocking back. In today’s age, customer experience is the new currency. The strategy of leveraging products to gain a competitive advantage is obsolete when you are fighting with “everything stores” like Amazon and Alibaba which offer almost infinite choice and cheaper prices. When everything is available all the time, at any price, experience is the remaining true differentiator
How can retailers generate powerful experiences to capture today’s new customers (and their Valentine’s day gifting dollar)? It’s a journey to get from being a product-based business to an experience-based business. In its recent “Path of Experience” report, Adobe sheds insights on the 5 milestones to experience-driven commerce:
- Segmentation: The first milestone on the journey is to truly know one’s audience. They exist, but the challenge is in finding them, and defining them. Not by demographics, but through shared attributes and behaviours. In practical terms, this allows a retailer to reach many individuals with a collective message and expect a certain desirable result. Each audience has to be large enough to make a difference in revenues, but small enough to be distinct. The answer to this is big data – be it through first party, second or even third party data. This is where a data management platform comes in, pooling all this information so retailers can experiment with traits that help them find these natural groupings
- Personalization: With the data, you can now create a special and specific experience for each audience segment. Wooing a customer with a one-sized-fits-all approach is no longer effective today, akin to giving a girl roses when she in fact prefers lilies. Whilst personalization is nothing new, today’s difference is that it can be delivered at scale using automation. By using the digital fingerprints that customers leave behind after every interaction, retailers can build a progressive personal profile that allows them to understand how customers feel, what they do, and ultimately, what customers want.
- Omnichannel: Now that retailers have gotten the ability to achieve customer intimacy, the third experience milestone is putting those relevant, personalized experiences where they count. Different customers use channels in different ways—without differentiating between touchpoints and channels, inbound and outbound. The consumer is everywhere. Retailers need to be there as well. And the best way to do this is via the mobile – the most personal device ever. Because of this, mobile often serves as a second-screen or cross-channel resource especially in brick-and-mortar selling. This opens the door for intelligent contextual marketing, where mobile is viewed as a behavior rather than a separate channel or technology. Because the behavior is constant, brick-and-mortar retailers can use mobile to augment the store experience, using various technologies.
- Dynamic Content: Experience-driven commerce requires that retailer reimagine what shopping looks like. It’s more about telling a story rather than telling the customer why they should buy the product, instilling a perception of increased value that differentiates from the competition. Dynamic content and shoppable media can bridge that gap, using the latest tools to tell compelling stories that take buyers straight to the checkout line. A great example of this implementation is Amazon Go – reducing barriers to commerce to make shopping a breeze
- Real-Time Analytics: As no two customers will share the same purchase journey, it’s important to always know where customers are at. Real-time data allows retailers to watch over the customer’s shoulder, understand the journey and smooth out any rough spots. It makes it easier for retailers to lead the customer from awareness to conversion. Analytics also provides optimization opportunities – and the chance to fine-tune the customer journey through a simple three step process: Measure (customer interactions), Adjust and Improve (the customer journey).
While the journey might sound a bit daunting at the outset, the key is to start small, move forward, and not stagnate. By carefully evaluating their ability to act on the five capabilities described above, retailers should get a better idea of where they need to go. And as they do, the customer experience will surely improve.
For more information, please download the full report here.