As we launch into a new year, I once again asked the Yaffe retail experts what they expect to see in retail marketing and retailing in 2016. If you're interested in seeing how we did last year, you can check out our "7 Factors That Will Shape Retailing in 2015" post. A lot of what we were looking at is still true today. But with another year in our rear view mirror, here's what we see as the major factors moving forward.
Customer-centric personalization will be a must-have for retailers. This is the next obvious step in making big data work for retailers. As more brand messages bombard us every day, people are only going to key into the ones that feel relevant to their particular set of needs and values. So,retailers who are personalizing their messages down to what feels like a one-to-one marketing message will be the ones who thrive in this environment. Fortunately, we have reached the point where there are the tools that can help retailers do this at a scale that it becomes affordable. "Retailers will dive into their internal data on known customer preferences to understand their customers and provide appropriate offers," says Data Analyst, Bonnie Massa. "Predictive analytics is the tool that will enable retailers to know what customers are going to want and when!"
Millennials and Centennials will be okay with releasing more data. This is part of what makes the customer-centric personalization possible. With so many connected devices permeating our lives these days, everyone is releasing more and more personal data into the internet. This is especially true with the younger generations. "As a Gen Xer who doesn't try to share any personal data, I found this interesting," says Yaffe Senior Art Director (who is trying not to share his name). "the next generations are serving it up by choice. It's probably different for them, being born after the beginning of the web." These younger generations gave this answer as the number one reason for sharing data with companies, according to a recent eMarketer article: to receive promotions, coupons, discounts and product suggestions. This bodes well for retailers who can personalize those offers, coupons, discounts and product suggestions.
The best retailers will connect with customers in a more authentic way. As the web gets more personal and all media outlets start to serve up images of real people in authentic ways, retailers will need to jump on board this trend. More and more brands are adopting the attitude of Dove's Real Beauty campaign by appealing to individuals who aren't the perfect ideal that marketing has served up over the decades. More recently we saw it with Always #LikeAGirl campaign. This goes back to being customer-centric and creating a personalized experience for your customers. People want you to see them for who they are, not who the world thinks they should be. If you can do that, you create a stronger bond with your customer and increase their lifetime value to your brand. "I think some retailers are already branding and connecting with their consumers in a more authentic way by representing moms, family units, dads, teens, grandparents in a modern way that more closely matches real life," says Yaffe Account Executive, Heather Pence. "I also think brands who are doing this will continue to tell fresher stories in more innovative, engaging, share worthy ways."
Social customer service is key and a necessity. Face it, customers don't want to talk to customer service on the phone any more. For one thing, they're tired of all the hoops they have to go through once they get loaded into a company's automated phone system – it's long, tedious and often without an option you're looking for. For another, people hardly ever make phone calls any more – period. Customers are increasingly turning to social media channels to seek customer service. It's easy. It's fast (at least, if it's working the way it should, it is). And they don't have to jump through hoops. Retailers need to be able to answer customers questions, solve problems, find solutions and make suggestions through their social channels. Even better yet, monitor the social web and find people (both customers and non-customers) who need help you can provide – then provide it. "Companies that dial into this will be ahead of the curve," says Social and Digital Strategist, Billy Strawter. "Social media can also be a good means of getting customer feedback to improve your products and services."
Mobile will become a dominate force for retailers. Smartphone penetration has reached critical mass. People are connected to the web everywhere, all the time. They are showrooming and webrooming with their mobile devices while they shop. They are even starting to use their phones to buy things in store, with the rise of mobile payments. So, not only does retail marketing need to incorporate mobile marketing strategies and tactics, but the importance of mobile optimization is now rivaling that of desktop optimization. Mobile also becomes a tool you can arm your front-line sales staff with. This gives them the ability on the floor to better understand their customer preferences based on database information, including past purchases, wish lists and other web browsing history.
Retailers embrace smarter, data-driven decision making. Retailers now have the ability to find true insights that will drive sales and increase the lifetime value of each customer. Very valuable information can be gleaned when you combine the wide variety of data sets available these days: transactional data, social data, weather reports, store traffic numbers, web traffic patterns, input from associates at the point of sale, demographics and psychographics – the list goes on and on. Connecting these dots across the entire organization is difficult and is why many retailers aren't able to put the data available to them to good use. "Most retailers don't have the budget to keep a top-line data scientist in-house to help them sift through all this information," says Yaffe Direct President, Michael Morin. "That's why we put together a team that can help them understand data in a way that allows them to speak to customers in a language that contributes to the bottom line on an on-going basis. It takes tools and expertise most retailers simply don't have."
There are many more factors each retailer must take into account in this ever more complex world we are working in. But we see these as some of the keys to successful retail marketing this year. Fortunately, as the complexity of data and the marketing funnel increase, the tools and information to take advantage of these trends also increase. And that is the key to surviving 2016. What other key factors do you see having major impact in the next year?