Omnichannel
3 ways retailers must pivot in 2021
Anthony Ng Monica, CEO of Swogo, says the good news for retailers heading into the new year is that there are strategies to help the accelerated digital transition and that omnichannel retailers have an opportunity to bridge the gap on online sales.
January 22, 2021 by Anthony Ng Monica
The 2020 holiday season was unprecedented in every sense of the word. Online sales increased at their fastest rate in 12 years, accounting for 20% of all retail purchases. This figure was up from 16% in 2019, according to Forrester Research. This makes the online channel more important than ever to not only have a successful holiday season, but to retain customers and ensure brand loyalty.
The good news for retailers heading into the new year, however, is that strategies can be implemented to help this accelerated digital transition and maximize their revenue. Moreover, armed with the right online strategies, omnichannel retailers have an opportunity to bridge the gap on online sales. Let's explore three ways retailers can best enhance their online experience to their advantage in 2021.
The right tech for the sale
As more and more retail sales shift towards the online channel, it's never been more important for retailers to ensure their digital services meet and exceed the rising expectations of today's shoppers to boost their sales and profit margins.
In physical stores, it's usually quite simple to cross-sell — the stores are laid out easily for customers to find what they need and trained sales associates can help point customers in the right direction. However, this shift to the online channel has caused profitability from cross-sell to decrease.
Cross-selling is an area that most retailers can improve online and it's a good example of how best-in-class technology can be used to increase their bottom line. The problem is that most online retailers rely on two approaches to cross-sell: customer behavior driven product recommendations and manual work.
Product recommendations that use historical customer behavior result fail to understand the products being sold, leading to irrelevant and missing cross-sell that hurts the bottom line. Meanwhile, the manual approach doesn't scale across larger product ranges. Cross-selling leaders today understand that the most important factor in effective cross-selling is understanding the products being sold, followed by leveraging machine learning and AI algorithms to drive automatic and dynamic bundles.
The customer as an individual
Leading retailers like Amazon that put their customer at the center of their proposition have raised the bar of modern customers. In fact, contemporary expectations are so high that 38% of customers leave a retailer's website because of poor personalization. The problem, however, is that most retailers remain in the early stages of their personalization efforts.
A key driver in online purchasing is convenience and retailers should be aiming for a frictionless experience that guides the customer to the right products at the right time. Thankfully, getting started in personalization is not as tough as it might appear. McKinsey reports that most companies have more than enough data and people to get value right away, so forward-thinking companies should be finding ways to advance to the next level of personalization maturity.
From the moment that a shopper arrives on the retailer's website, this is where personalization should begin. It's advisable to start small, for instance this could mean showing popular gifts when a shopper lands on the website or offering a discount to incentivize their first purchase.
And what about brick-and-mortar?
Retailers with physical spaces must leverage these locations in an omnichannel capacity. Despite the surge of online shopping in the past 12 months, brick-and-mortar stores can enhance overall customer convenience by making the shift from online ordering to in-store pickup as easy as possible. Offering the best of physical and digital channels will be essential for success in the coming new year and beyond.
In December, International Council of Shopping Centers' Pre-Thanksgiving Outlook revealed that half of shoppers (52%) expressed interest in using click-and-collect services to get the benefits of shopping in-store without needing to spend more time than necessary. The ability to see and touch the items, receive purchases immediately and take advantage of promotions ranked as the top reasons for shoppers to still visit stores in person.
So, there is still room for physical retail spaces going forward, but their role within the customer experience and overall business model requires a rethink. It will be those retailers who are willing to lean into an omnichannel presence that will be the most successful in this new normal shopping context. Since customers have become accustomed to being able to navigate seamlessly from the physical world to the digital world, so too must retailers in offering omnichannel fulfilment.
What's next for 2021 and beyond
Evidently, some of this advice will not be possible to implement immediately. At the same time, however, all of this advice will continue to be relevant in the longterm. A United Nations survey finds that the pandemic has forever changed online shopping behaviors, with more than half of the survey's respondents now shop online more frequently.
The pandemic has accelerated the shift toward a more digital world, and the decisions retailers make today will have lasting effects as the world economy begins to recover. The coming years will be anything but easy, but they are likely to reward those retailers who best respond to this lasting consumer shift.
Anthony Ng Monica is CEO of Swogo
About Anthony Ng Monica
Hundreds of retail leaders in over 30 countries around the world drive profitable growth with Swogo. Swogo takes a unique approach that focuses on understanding a retailer’s product assortment – Swogo Product Graph combined with machine learning and AI algorithms surpassing billions of recommendations per year.
Related Media
Subscribe
Get the latest news and resources from Retail Customer Experience.
Recent Posts
