By many industry measures, the pandemic has driven digitisation of shopping behaviours - and in particular, ecommerce - five years into the future, with both retailers and brands having to either adapt or be defeated.
“This change, however, should not be interpreted as the ‘death of physical retail’ which has been really overhyped,” says Carl. “The truth is that most purchases are still made in physical stores and this will continue in most categories for the foreseeable future.”
“What has changed,” he tells us, “is that digital is now completely, and irrevocably, integrated into every shopper journey and there is now a renewed focus on delivering a better in-store experience to drive traffic.”
Carl explains that “18 months ago marketers were thinking about how to win the ‘O2O’ (online to offline) journey as shoppers moved between online shopping and physical (offline) shopping. Today, we need to think in terms of ‘O+O’ (Online + Offline simultaneously).”
That means that brands and retailers need to make sure that whatever they do digitally matches and syncs with what's happening in-store and, equally, that the store experience is compelling enough to make the store visit worth it.
“Physical retail is far from dead, but one dimensional retail certainly is,” says Carl, who using the vernacular coined by Jack Ma & Alibaba, calls this the ‘New Retail Revolution’.
2. New Retail & The Customer Moments That Matter
Diving into the topic, Carl states that “New Retail is essentially about creating a seamless and simultaneous customer journey across digital and physical shopping moments - thinking about the process holistically - especially when you consider that the vast majority of store sales are driven by a digital experience and that these digital touchpoints are also often happening while people are in-store.”
“The customer journey today is truly omnichannel and leading brands and retailers need to think in terms of digital and physical touchpoints and how they can change behaviours from home to the store and back again,” he continues. “These are the customer journey moments that matter.”
In a recent report by Big Four firm Deloitte
, 76% of surveyed consumers admitted to using digital devices to shop before a trip to the store, making purchase decisions much earlier in the process. What’s more, 34% of shoppers surveyed also used digital while in the store, highlighting just how much the traditional shopping experience is now influenced by digital experiences.
Going by the data, shoppers can expect the 2021/22 holiday season to be characterised by a step change in the integration of digital and physical touchpoints by leading brands and retailers.
3. Tap Into Revenge Spending and the ‘New Roaring Twenties’
The Post WW1 and Spanish Flu era of the early 20th Century saw the ‘Roaring Twenties’ – an era defined as a ‘great coming out for societies’ after years of global crises.
Carl notes that “similar to this era, we are already seeing a global trend of ‘revenge spending’ as countries emerge from Covid enforced lockdowns. Consumer optimism, buoyed by additional Covid-driven ‘splurge spending’ should hold strong for the holidays, leaving retailers in a much better place than last year.”
“While this optimism is currently somewhat divided (with lower income and older consumers still being less optimistic), spending remains buoyant in high income and younger consumers, suggesting that ‘the intent to splurge’ post-covid is likely to be a foundation for market growth for years to come in a (hopefully) new 21st Century Roaring Twenties,” Carl says.
“To tap into this mindset we must understand the shopper’s motivations, which at this time of year will be focused on making up for the occasions and time lost to Covid over the last 18 months – it’s going to be a top of mind shopper driver for the 2021/22 holiday season”.
4. New Retail Data Integration for the 2021/22 Holiday Season
While ecommerce obviously remains a key industry ‘must win’ 2021/22 capability focus, there are other areas where we can expect to see retailers and brands lean in to drive competitive advantage.
With the rise in more digital shopping both brands and retailers have the opportunity to understand their shoppers in ways that were not possible previously.
“Loyalty card data has always allowed a deeper view of customer purchase behaviour but for retailers and brands to truly get to the crux of how shoppers are behaving this year, they should be tapping into smarter, more integrated data that brings together media touchpoints with search and purchase data for a holistic view of the customer and their past and potential future behaviors,” Carl outlines.
“While we can already understand what people purchased previously, the integration of card, digital media and search data will allow us to understand and forecast what categories and products customers are searching for online and what they are likely to purchase in the future,” he says. “It’s a new integrated view of your target shoppers that allows for much smarter forward communication planning.”
Crucially for the 2021/22 holiday season, smart data integration will provide insight into upcoming gifting trends for specific shoppers before they purchase. “Use of search data is one of the best ways for both brand and supply chain managers to understand product purchase (and supply) trends – particularly for seasonal holiday shopping trends.
5. ‘Tis the Season for Purpose
“Very much like the trend of ‘revenge spending’, Covid has also dramatically accentuated the focus on community and social responsibility,” says Carl. “The 2021/22 holiday season is going to see an avalanche of purpose-driven brand and retail marketing but this is actually a long-term trend that will be driven by the rising ‘Gen We’ shopper – the millions of Millennials and Gen Z entering the market over the coming years who are deeply passionate about purpose and social responsibility.”
That means, for the 2021/22 holiday season we can expect there to be a step change in focus on cause and community. “But be warned,” says Carl, “purpose isn’t a ‘tactic’ - it’s a strategy, and something you need to do properly. Brands that don’t do this authentically will get hammered by shoppers.”
So, what does this all mean?
The holiday season is rife with opportunity and understanding the rules of the new shopper journey is key in making the most of this.
Omnichannel strategies must be mastered, leveraging digital to create a more seamless O+O shopper experience while also step changing the in-store experience itself.
New data is a priceless tool in implementing smart business decisions and, critically, understanding future trends.
And Purpose must not be an afterthought.