Right now, the retail industry is reshaping where we shop, how we shop and when we shop. It is based on the realization that the macroeconomic environment requires drastic action to adapt to changing consumer preferences and lifestyles. As a result, there are several questions – and opportunities – that marketers must address. Here are some observations.
1. Retailers are expanding where they sell, but they must do so carefully. Dillard’s name is well received in the South, but outside of that region it is relatively unknown, so it would not be a big draw in northern cities. Name recognition is essential.
2. Retailers must plan for economic uncertainty. Raising prices in an uncertain environment can be a bad choice (even though costs have risen) when businesses need to maintain their customer base. Retailers need to know what the customer is willing to pay and why. For example, consumers will often patronize a small business to show support for the local community. In contrast, national chain stores must have friendly staff who invite customers to return to counter higher prices.
3. Automation can improve the user experience. More and more customers are fans of automation, and in most cases they prefer it when it can make shopping easier/faster or give them more control over the experience. 73% of consumers prefer local merchants to use automation instead of staff in at least one part of the shopping experience.
4. Customers want to interact with brands. Knowing when to send emails or when to promote via text – or both – usually depends on the audience, but understanding where to start can make all the difference. Connecting at the right time is more important than ever as customers are bombarded with more messages than ever before.
5. Social and mobile commerce are two of the biggest digital trends in the retail industry – and they’re booming. Social and mobile selling are enabled by e-commerce tools, helping retailers reach more customers at the same time. Today, 79% of consumers shop via their mobile devices. Square reports that mobile payments on their platform have grown by +117% this year. This is partly due to the growth of online and social channels. Doing business online is about meeting customers where they really are. These days, customers shop both in physical stores and in all available digital options, so a smart retailer will want to cover all options.
6. Experiential retail experiences are evolving rapidly. 2023 is about to see the return of ‘experience’. After two years of various restrictions due to COVID-19, consumers are eager to enjoy the brands they love again – and eager to do so in a new, tangible way. Virtual and digital experiences are still important. However, as the in-store experience returns to prominence, retailers are focusing on improving their operations in their brick-and-mortar locations.
7. The boundaries between verticals continue to blur. For today’s companies, diversifying their offering is a key way to increase revenue and grow their brand. In an uncertain economy and increasingly competitive business environment, businesses understand the importance of multiple revenue streams and need to look for natural brand extensions that customers will embrace.
8. Flexible payment options are becoming increasingly important for younger consumers – especially Gen Z – and should be explored. Buy Now Pay Later (BNPL) options improve the shopping experience, and customers – especially younger customers – are looking for them. The data are not as strong for older age groups. Currently, 33% of merchants offer BNPL options according to Square’s Future of Retail 2023 report. 41% of Gen Z-focused retailers plan to add BNPL to their payment option.
POSTSCRIPT: The Square report highlights some important facts. We are coming out of a pandemic period that has lasted for more than two years and customers have changed. Brands continue to have a strong influence on customers. The customer will buy what they know, but is likely to be increasingly influenced by social media and mobile e-commerce presentations, and this is changing the marketing model for retailers. The macroeconomic environment is also uncertain and, while I still see a strong finish to the current fiscal year, many economists fear a recession.
Forbes – Business