The past six months have been tough, even punishing, for many retailers, but there was good news this past holiday season. According to Bazaarvoice, 81% of consumers planned to purchase holiday gifts this year, with 61% stating they would spend the same as last year.
However, a question mark still hangs over where they spent their money, as research showed that since the beginning of the pandemic, 49% of shoppers have been purchasing more online.
And in the ecommerce world, that can only mean one thing: online retail giants such as Amazon continue to dominate the market. This left smaller retailers searching for ways to boost online sales performance and customer experiences in the face of such stiff competition, especially for leveraging big-ticket retail events — Black Friday, Cyber Monday, Christmas — for securing much-needed revenue.
During the recent holiday season, most countries have experienced a second wave of the pandemic, and it was crunch time for retailers that aimed to win back profits lost and capitalize on the largest trends that defined 2020:
Advertisement
Challenge 1: Slow Economic Growth
According to IMF, the global economy contracted by 4.9% in June 2020, which is significantly more than its April 2020 projection of a 3% decline.
However, IMF projects a 5.4% growth rate in 2021 after most economies come out of full lockdown and continue to contain the virus, and start distributing vaccines.
Solution: Monetize the “By-Appointment Economy”
During and after the first lockdown, retailers confronted a new way of doing business in-store. Having to reserve staggered slots to offer services quickly became the new normal. However, the demand soon outpaced the offer, and most service and goods providers could not keep up with the demand and missed out on revenue opportunities.
Being able to offer your customers the possibility to jump the queue and shop safely by appointment will help retailers improve their customer experience, increase their basket size and gain more customer data, boosting sales efficiency and customer lifecycle value.
Blending online and offline shopping harmoniously to reduce friction in the entire buyer journey, from appointment scheduling to safe pickup, will make consumers more comfortable and easier to transition to the new in-store shopping experience.
Challenge 2: Consumer Confidence — Slow to Recover
The influence of consumer confidence on retail sales cannot be overstated. In 2021, the overall picture is gloomy: rising unemployment and subsequent low consumer confidence are projected to lead to a drop in consumer spending.
Even in the absence of any new national lockdowns, online retailers will continue to have the upper hand in retail sales and remain the main driver in increasing consumer spending.
Understandably, consumers are shifting their buying toward more basic human needs, such as food, rather than spending money on luxury items, saving their paychecks for a rainy day. They are also avoiding paying by cash and physically touching products while staying in-store for as little time as possible.
Solution: Adopt New Technologies
Grocery stores were the first to jump on the technology bandwagon by implementing new systems with a “tap to go” option that removes queues at the register. Consumers can just scan the items in their basket during shopping and pay the total at the register without having to rescan the items.
The use of conversational commerce on messaging platforms has accelerated in 2020. 90% of consumers prefer using messaging to communicate with businesses, according to Data Dimension, and 53% of consumers say they are more likely to shop with a business they can contact via a messaging app.
A key ally in catering to this consumer preference are chat apps such as WhatsApp and Viber. Each platform offers a range of functionality that can be used to drive up sales via optimized customer experiences and create new marketing opportunities.
A few ways retailers can use chat apps are to offer customer care via these channels, upsell and cross-sell services and products, and speed up sales cycles by booking appointments and sending reminders right on the channels the customers use every day.
Challenge 3: Coping with Online Demand
According to Global Web Index, in the U.S., 13% of all online purchases are now done directly through social media, whereas this amounted to only 7% pre-COVID-19.
Solution: Embrace Multichannel
In 2021, retailers should focus on making consumers feel comfortable and safe to shop.
Enabling online channels for selling by integrating social media, marketplaces and messaging platforms, such as WhatsApp and Viber, will help retailers meet their customers wherever they choose to be.
Personalizing the shopping experience by integrating the channels with CRM is key. Think of creating tailored multimedia experiences informed by previous purchase histories and offering new specials to customers. This will help retailers bridge the gap and humanize the shopping experience online.
Moreover, integrating chatbots with popular messaging channels will help businesses cope with high call volumes and boost consumer trust in buying.
Retailers need to realize that the digital customer journey has now become a competitive differentiator. Engaging with consumers on their favorite messaging platforms will not only facilitate their operations but also ensure their offerings remain relevant to increasingly digital-first customers in the long term. After all, Gartner’s research shows that 70% of all customer interactions will involve technologies, including chatbots, machine learning and mobile messaging, by 2022. This means that for retailers to secure revenues as the world emerges from the pandemic, reaching out to consumers on their preferred channels is now more vital than ever.
Jean Shin is Director of Strategy and Content at tyntec. As a seasoned tech marketing strategist and editor, Shin excels in connecting key business insights with tech innovations to create greater value for all stakeholders. Originally from New York, Shin now lives in Munich. Building on her 10 years of experience with Samsung’s Digital publication, she continues to cover the mobile industry, and she is a supporter of The Denan Project.
