Recent headlines have been riddled with announcements around brick-and-mortar store closures. In today’s digital world, many traditional retail store brands are struggling to keep the doors open. Industry experts warned last year that retailers would have to respond by restructuring, but the trend has continued into 2017. Understanding the current landscape and areas of opportunity is key in succeeding in today’s evolving retail world.
The State of Brick-and-Mortar
Data from the brick-and-mortar retail analytics firm, RetailNext, recently revealed that year-over-year traffic to U.S. stores has declined for at least 48 straight months while monthly sales have dropped for at least 36 straight months. However, while in-store sales are declining, pure-play e-commerce retailers such as Amazon and online subscription-based businesses are thriving.
Unlike traditional retailers, niche online brands have a wealth of online data, enabling them to grab and maintain their customers’ attention by opening limited stores in locations they know will be successful and offering products they know will sell. For example, retailers like Minted, Birchbox, BaubleBar, Frank and Oak, and (of course) Amazon started online, then took to the streets with brick-and-mortar. In contrast, while major traditional retailers like Wal-Mart and Macy’s are raking in online sales relative to what they’re seeing in-store, their e-commerce share of total sales is still 58 percent below that of Amazon’s, according to eMarketer.
For traditional stores, these stats can be daunting. Department stores and similar big-box stores are competing with giant like Amazon, and retail, in general, is becoming more competitive. It’s increasingly important for your customers to be able to distinguish your brand from others. So how can traditional stores combat e-commerce-first retailers? Brands must take a note from retailers that began online and create a true experience that is not focused just on the commodities. The key to competing with these retailers is to take an omnichannel, “experience-first” approach.
The Offline Opportunity
Regardless of whether a brand is trying to engage a customer online or offline, it’s important for marketers to reach them with the right time message at the right time in the right place. Even offline, this can be accomplished by taking a data-informed approach to create a more relevant omnichannel experience:
Target Customers Before They Enter Your Store
Roughly 55 percent of consumers begin their online shopping searches on Amazon's site, according to a study by BloomReach. However, geofencing is a way for other brands to reach those customers both online and when they are physically in the right place. Geofencing is a location-based service that sends advertisements to smartphone users who are within a defined geographic area. In short, it allows brands to target customers within a certain range of their physical store location. As mentioned in this post, retailers can use geofencing to prove the number of individuals who visit a brand’s location after browsing their online store and create a more consistent and meaningful experience for customers. Brands can deliver ads for products customers have previously seen online when they are geographically relevant, and customers can take immediate action.
Use Data to Connect the Dots
Data is just as important offline as it is online in informing your in-store strategies and on-site queries. Marketers can use online activity to track data faster and break down silos to create a more cohesive experience for customers. Connect the customer’s experience by offering previews of products online through programmatic and social display ads before they enter your physical store. Doing so could offer retailers a more complete view of the customer journey and entice customers to visit your store to view new, exclusive products.
Refine the CTA
To drive a true omnichannel experience, be sure to have clear calls to action, in-store. Align your product inventory with signage that has CTAs indicating there are more options online or on your mobile app, calling out special editions of products or additional colors. For example, an in-store display of a product might be accompanied by signage that shows other designs available online or within an app. By focusing on certain products rather than offering a ton of commodities in-store, retailers can concentrate more on the experience, creating more of a showroom for customers and a less cluttered experience. Retailers like Crate & Barrel are finding ways to connect online and offline to create that type of experience. Additionally, providing similar product recommendations in-store can also help drive a more complete customer experience.
Overall, adjusting your strategy may be challenging at first, but the faster you can adapt, the sooner your brand can begin to see results. With these considerations, traditional retailers can get a head start on creating a more seamless omnichannel experience for customers.
To learn more about creating an exceptional experience for your customers, reach out to our team.