More retailers filed for bankruptcy in the first three months of 2017 than in all of 2016, sparking headlines warning of a retail apocalypse and painting Amazon as the villain.
With shoppers’ retail spending up versus last year, and 90% of retail sales still conducted in brick-and-mortar outlets, according to the National Retail Federation, those headlines are misleading. True, many established retailers have failed to compete effectively, but others are thriving. What can we learn from their attempts to propel retail and brand growth? Retailers who deliver a preferred shopper experience will win more shopper dollars.
Successful retailers share three key factors. Whether online or in-store, being mindful of these factors will elevate the retail experience and inspire success.
Winning retailers are obsessed with understanding their shoppers, ensuring relevant shopping experiences rooted in insights. Amazon has built an entire shopping ecosystem based on knowing what is popular among shoppers, and how shoppers who like one item tend to like certain others. These insights drive Amazon’s acquisition strategies, help set pricing, and inform solution bundles to enhance product sell-through. The result is personalized shopping experiences and higher conversion rates.
Successful retailers also leverage insights identified through manufacturer partnerships to elevate shoppers’ retail experiences. For example, Unilever helped CVS realize that merchandising the shampoo category by hairstyle instead of scalp condition could help overwhelmed shoppers find a personalized solution. This insight increased consideration of CVS as the go-to retailer for hair care inspiration and products, and also drove more sales.
Winning retailers recognize the need to create differentiated, shopper-centric experiences. Nordstrom is an example of a retailer that presents its differentiated high-touch shopping through its personalized service, online and offline inspiration, and even “magic mirror” dressing-room technology. And it continues to expand and scale the curated shopping experience with such digital acquisitions as HauteLook and Trunk Club.
Walmart’s purchase of Jet.com and potential acquisition of Bonobos further illustrate retailer recognition that the path to growth is about offering and scaling differentiated shopper experiences.
Winning retailers test, scale, and refresh solutions that they hope will delight shoppers enough to keep them coming back. For example, Winn-Dixie has created Hispanic-focused formats, while Weis Markets is testing stores with a pub and ice-cream parlor to drive community traffic. Tapping into the trend of healthier and more convenient food, Ahold created its bfresh® concept, emphasizing fresh produce and prepared meals.
Ikea has leveraged millennial interest in ethically sourced ingredients and healthier options, and transformed its Scandinavian restaurant and food market into one of its fastest-growing segments, feeding hungry shoppers and attracting store traffic. America’s interest in recreational dining has also spurred grocers like Kroger and Whole Foods to create in-store watering-hole-type bars with seating. Retailers who continually experiment, scale, and refresh relevant solutions for their shoppers will add value to drive traffic and loyalty to their offering.
The opportunity to delight shoppers with differentiated experiences across channels and technology platforms makes the retail landscape very exciting. Is your brand prepared to seize this opportunity?