Modern consumers have placed new expectations on manufacturers, retailers, and marketers to utilize all channels available in a way that is innovative, emotional, and efficient for them to shop.
With so many distribution channels available, the challenge for marketers is finding ways to engage their customer in a way that is fulfilling and meaningful, but also delivers a strong ROI for their company. What is the role of brick-and-mortar stores in a fast-growing digital space? Will the in-store customer service experience continue to reign? These and other questions were discussed in detail at IIR’s 2016 Omnishopper conference, which focused on the future of retail through the lens of consumer engagement, research, and activation strategies that help define next steps for the insights and category management teams. The event showcased keynote speakers and presentations from companies such as Lowes, Mall of America, Pepsi Co., Wrigley, Red Bull, Kohl’s, Welch’s, Kellogg’s, ConAgra Foods, Google, and others. Many of their presentations highlighted the shift from an era of retailer control to a shopper centric model. The must-see keynote was an interview with Nobel Laureate Daniel Kahneman, who spoke on the principles of behavioral economics.
Here are some of key themes from Omnishopper 2016:
Bridging the Gap: In-store and Online
There are incredible statistics surrounding the online shopping habits of today’s consumers. For example, nearly 82% of consumers research a purchase online before buying it. Of those who research online, a little over half of those consumers plan to go to the store to make the purchase, yet 92% of retailers admit that they struggle with omnichannel integration. Retailers are expected to create a seamless transition from online to in-store, and much of the conference discussion centered on different ways to do that. One option is to design a visually appealing website with excellent user experience (UX) capabilities that allow users to navigate the site with ease, but also enable efficient online transactions. Customer service is not to be overlooked in the online space either, as Emily Shannon, Director of Digital at Mall of America, noted in her presentation. Whether it is instant chat or phone assistance, retailers need to be as accessible as possible to customers if issues arise.
Also, retailers can bridge the gap between online and in-store by allowing in-store pickup for online ordering, providing virtual tours of brick-and-mortar shops on the website, or even utilizing digital screens in-store that play the most recent campaign commercials so that branding is consistent across both channels. Related, there was discussion around the fact that augmented and virtual really could transform the retail experience in new ways and might offer a unique differentiator to brick-and-mortar (think Pokémon Go appeal). Finally, retailers can capitalize on the vast network of social media users, whether on Twitter, Facebook, Instagram, or one of the many others, to connect and share with consumers. Not only can a company’s social media presence be leveraged for solving customer service problems, it can also be used for promotions and even collaborations with other people or brands.
Emotions and Creating Experiences
There are 1.1 zetabytes of data in the world and marketers have easier access to it than ever before, but what does this say about emotion, gut instinct, or the power of strong human connection? Keynote speaker Jessica Hendrix from Saatchi and Saatchi defined it as “return on relationship” and supported it with the idea that emotions are the core of what it means to be human. Data can answer a question, but it cannot create an experience. If marketers are really trying to tap into why people buy, they need to be in tune with the emotions that are tied to consumer shopping habits.
Some companies highlighted the importance of creating experiences that engage customers, such as Mall of America and the ways it tracks guest activities and Lowe’s with an application of new technologies to help improve shopping for their customers. For some, the implication of connecting with a consumer on a deeper level means a consumer will approach their product with a slower, more deliberate way of thinking to benefit a brand in the long run. Others discussed how some retailers and manufacturers have tapped into human emotion through advertising in order to differentiate themselves from the competition. For example, a campaign that shows the connection between a mother/father and their child or demonstrates the impact one purchase can make on the environment, relates more to a consumer and makes them feel as though they are contributing to a bigger picture.
Renowned psychologist and Nobel Laureate Daniel Kahneman talked about the principles behind System 1 and System 2 thinking. System 1 is intuitive and instinctual, “fast” thinking while System 2 is analytical, “slow” thinking. Normal shopping habits live in System 1 thinking, further solidifying the statement that retailers and marketers have about 3 seconds to connect with a consumer before they decide to purchase an item, or move on to the next option. His examples of common misperceptions and how our brain uses shortcuts or heuristics to decide are lessons in the importance of studying behavior to really understand what will drive the changes we seek. Other presentations showed how understanding triggers and barriers to purchase in the store environment can lead to marketing that has greater impact versus the preferred ways of building demand through traditional marketing vehicles.
The Next Generation of Consumers
A topic that always creates angst among attendees is the rapid pace at which the younger generations move today. One presentation shared that generations are now changing every three to five years, which is right in line with major technological advancements. This means that while the intense focus companies have had on marketing to “Millennials” is certainly not null and void, a new generation of consumers is rapidly approaching its peak spending years. “Generation Z” consumers, born in the late 1990s and early 2000s, were raised on technology and have an interdependent relationship with all things digital. They expect a strong digital presence from all of the companies they frequent, but do not want to feel as though their personal space has been invaded by big data.
Discussion always turns to new models, especially those labeled the “sharing economy” or “collaborative consumption,” such as Uber and Airbnb. This was discussed as a way of life for the younger consumer groups. Rather than being loyal to a single source of information or goods, Gen Zs want to invest in speed, convenience, transparency, and high quality no matter where it comes from. The rise of “last mile logistics” (Amazon drones), same-day deliveries, and “wearables” (Fitbit) are perfect examples of companies matching the pace of the next generation and their unique needs and expectations. Gen Z will learn differently, live differently, and as such, consume differently than any generation before them.