Watch Out for These 3 Huge Retail Challenges
Regardless of the sector, retail businesses consistently face challenges on the path to winning their markets. The digital revolution created a huge influx of competitors from around the world, allowing the creation of retail without the need for physical space. Some of these competitors leveraged digital innovation to disrupt their retail sector, growing larger than major retail chains. Brick-and-Mortar stores face these unavoidable challenges as they target increasingly segmented demographics.
1. Online Competition
There’s no getting around the expanded competition that all retailers face. Online retailers continue to flourish, grabbing a larger share of sales growth compared to brick-and-mortar stores. In January 2016, online sales were 10 percent higher than the previous year. Projected online sales are expected to exceed one trillion dollars for 2017. Despite strong numbers, digital sales will likely continue to grow in the future, largely because of innovation.Projected online sales are expected to exceed one trillion dollars for 2017 Click To Tweet
The shift to mobile platforms has been one of the drivers of growth, placing thousands of digital shopping options in the palm of the shopper’s hand. Mobile traffic share has grown to 63 percent for Amazon and 58 percent for eBay, with new ways of retail shopping set to increase these percentages. The introduction of Amazon Go technology promises to disrupt most sectors of retail, beginning with grocery and clothing. Shopping brick-and-mortar via mobile, without visiting the checkout line, promises to become a new norm. Perform an audit of your mobile shopping presence to prepare your business for the next wave of digital transformation.
2. The New Buyer’s Journey
Consumers have more choices than ever before, including shopping sites and digital information sources where buyers learn about the products and services they wish to purchase. According to Forrester Research, buyers interact with an average of 11.4 content sources before they make a retail purchase. In fact, by the time they contact an online or brick-and-mortar retail presence, estimates suggest that 70 to 90 percent of a customer’s decision-making process has already been completed.
Prior to the new buyer’s journey, fewer sources of information existed for consumers, placing a greater focus on a streamlined sales funnel for retail. Today, the way consumers shop has changed. Adapting to buyer preferences involves an online presence that provides relevent content customers desire. Digital storefronts and information sources should coordinate communication with brick-and-mortar retail to ensure a consistent message for buyers.
Considering Amazon Go and the use of shopping beacons that trigger mobile apps, you will need to implement mobile retail platforms to cater to the new buyer’s journey. One significant upside will consist of the information you gather about your customers through apps. Using analytics, this data reveals trends and preferences while maximizing communication campaigns with shoppers.
3. Marketing to Multiple Retail Demographics
For the first time in modern retail history, many companies face the daunting prospect of marketing to five generations of consumers. Attempting multi-generational marketing requires segmenting buyers along generational trends. Fortunately, retail companies have the option of undergoing digital transformation, connecting data sources across all business activity while enabling an omni-channel presence. Digital retail solutions automate much of the information processing and analysis, easing the burden of multi-generational marketing.Attempting multi-generational marketing requires segmenting buyers along generational trends. Click To Tweet
This makes it possible to personalize communication with every customer in your database, as well as on social media, ads, promotions and recommendations. Every stakeholder in your retail business, including staff and customers, may be connected through your master database via mobile platforms, delivering powerful personalization over smartphones.
Digital Response Required
Similar to the genie in the bottle, the digital revolution will continue to grow and will not be contained. As a retail business, you need to respond to these challenges or risk losing ground to competitors who implement innovation. Don’t miss out on an opportunity to capture sales from an ever-growing digital consumer base.