By Sean Keith
What are the most important common denominators retailers need to consider pertaining to Gen Z shoppers, China’s breakneck ecommerce growth, and the world’s biggest tech companies?
They are data-driven and digitally enabled.
These two qualities are critical for the survival of retailers in today’s landscape. Ecommerce giants like Alibaba and JD.com dominate, and China’s powerhouse economy, combined with Gen Z’s shopping habits, are shaping the future of the retail industry, among many other consumer trends.
At the recent Retail West Conference in Vancouver, the question underpinning most discussions was: how can your retail business survive in an increasingly digital ecosystem? Taking a hint from the digitally enabled and data-driven success of Amazon and Alibaba (with a $943 billion and $435 billion market caps respectively), it’s clear that retailers need to leverage data and incorporate digital strategies into their marketing efforts not only to survive but thrive.
Together with retail executives and professionals, many of whom manage operations within the Canadian market, the Eagle Eye team left the conference brimming with new information and insights. Here are our three main takeaways from the event:
Create Digital Connections with Customers: Attending retailers interested in the Chinese market were reminded that the country is now digital-first. Of China’s $17 trillion domestic spend, 22% of all retail sales were digital purchases and of that, 70% were made through mobile payments. Whether you plan to sell in China or not, the lesson is clear—digital-first markets are growing exponentially, as the country transitions from traditional (i.e. cash) to modern retail formats and transactions. The future belongs to retailers that can interact with consumers digitally, both online and in-store.
The vast majority (90%) of consumers of all age groups still purchase and/or collect their shopping in-store, but are likely to visit a retail website before buying, according to Eagle Eye’s new Connected Customer white paper. You need digital connections to engage these “channel-switching” customers – Gen Z or otherwise – throughout their shopping journeys. Domino’s Pizza, for instance, offers 15 different ways to order a pizza, from using emojis on Twitter to chatbots, voice assistants, and smart TVs. The right digital marketing solution should enable you to know and engage with your customers, irrespective of their specific path to purchase. Wherever they are (on your website, social media, in a physical store) at any time they choose to engage, you should be digitally ready and equipped to provide information, incentivize one more sale or visit and ease friction points.
Connect Data Points to Gain Insights into Customer Behaviour: “Data as the new oil” was one of the most memorable insights attendees took away from the conference. The success stories of big tech companies such as Amazon, Facebook, Apple, and Visa reminded retailers of the importance of capitalizing on data to penetrate markets worldwide.
But it’s not enough to aggregate customer data generated via online-only connections alone. Businesses of all types, especially retailers, should have the ability to connect the data from all touch points for a single and more complete view of every customer, and this includes inside their physical stores. Enabling a single, online-to-offline view of customers is the best way – and really the only way – to understand their motivations and respond to their preferences. With full visibility and understanding of what the customer wants, delivering tailored offers and personalized interactions becomes easier, more effective, and drives greater value to the business and consumer.
Differentiate Your Brand Through Personalization: For all the maligning they receive, the younger generation is our future. So naturally, the impact of Gen Z’s behaviours and preferences (consumers aged 22 and under) on shopping trends was a prevalent theme. Gen Zers, who grew up on Snapchat, Spotify, and now TikTok, love personalization. They don’t want retailers to treat them like everyone else. They have changed consumer expectations forever by making personalization the fabric of their experience.
Going back to customer data, as cliché as it sounds, it lies at the very core of personalization. Retailers can’t be effective marketers without access to it, and without truly understanding what data to use and when to effectively engage customers to increase sales and visits. Digital marketing solutions are constantly evolving, using machine learning with robust analytics and performance marketing techniques to help retailers make the best possible use of their customer data, not only to tailor offers based on customer preferences, but to anticipate customers’ future needs. That’s what will keep retailers in the relevant category, instead of being relegated to redundant; always-on knowledge of what customers are likely to want later today, next week, and next year.
The big tech companies, China’s ecommerce behemoths, and Gen Z expectations have already pushed the global retail industry toward an increasingly digitally enhanced and competitive environment. These moves, which may feel threatening to some retailers, have actually opened up a whole slew of opportunities for those most agile and digitally enabled retailers to increase customer engagement and, ultimately, drive more traffic and sales.
Sean Keith is the Director of New Business Development at Eagle Eye, a leading SaaS technology company that enables businesses to create real-time connections with their customers through digital and mobile promotion solutions. Recognized by the World Economic Forum as a Global Shaper, Sean helps brands in the retail, food & beverage and hospitality industries implement digital transformation initiatives to better understand customer behaviours and drive revenue growth among Canadian businesses.