DIGITAL OR BUST: HOW TO SURVIVE IN A RETAIL LANDSCAPE FACING SEISMIC SHIFTS
In the span of just a few months, the United States has “vaulted forward ten years in consumer and business digital adoption.” E-commerce experienced a staggering 30% rise in sales during the lockdowns last year, and according to a recent McKinsey report, 40% of consumers “switched brands or retailers” in 2020. As vaccine distribution efforts across the United States and Europe continue, businesses should not dismiss 2020 consumer behavior data as a fluke. This crisis has “ushered in a new reality for consumers and retailers.” The quick digital transformation of the retail shopping experience has changed consumer expectations and spending behavior for good. Businesses will need to adapt their digital strategy in three key areas in order to survive.
WEBSITE DESIGN AND FUNCTIONALITY
During 2020, a functional website was the difference between survival and permanent closure for many companies. Businesses need to invest more time and energy into their digital storefronts if they want to remain competitive. 38% of online users will immediately “will stop engaging with a website if the content/layout is unattractive.” Good design is a must. Businesses should start by optimizing the functionality of their websites for mobile users. Mobile devices generate 50% of all online traffic. 85% of mobile users expect “a company’s website… [to] be as good or better than its desktop” presence. Secondly, companies should place a strong emphasis on optimizing for speed. 53% of mobile users will abandon a site if the page takes more than 3 seconds to load. It only takes 0.05 seconds for customers to form an impression of a website. Do not let long loading times make a negative first impression. Ecommerce websites should have a solid foundation in good design. Take time to think through the graphic design and user design experience (UX) of the website. Great websites incorporate a cohesive aesthetic with intuitive fundamental design language. It should look great and be easy to navigate. Finally, businesses need to keep up with basic digital housekeeping. Remember to regularly update the website with “informative product descriptions and clear product images.” Research shows that 65% of customers “research a product online before purchasing” at a physical store. A website that clearly communicates the brand and products will give customers the confidence to make that all-important first purchase.
CUSTOMER LOYALTY PROGRAMS
Given the shifts in consumer spending, it is crucial for business to capture customer loyalty whenever possible. In a recent survey, over 10% of respondents “switched to brands that sent them relevant messages or promotions in their preferred channel.” If businesses want to retain these new customers, they need to rethink their loyalty programs. 77% of people are “more likely to continue using a brand’s services if it has a loyalty program.” Customer loyalty is important because “65% of a company’s business comes from existing customers.” Modern brand loyalty programs are not the boring point-based systems of the past. Instead, businesses should look to offer exclusive deals and experiences to their members. The Chick-fil-A One App is a great example of this strategy. Through the app, individual stores can directly message local customers with exclusive deals and communicate about special in-person events. Similarly, REI Co-op offers exclusive in person garage sale events where REI members can shop for used gear at heavily discounted prices. In short, modern loyalty programs should invite real engagement from customers.
DIGITAL INTEGRATION WITH PHYSICAL LOCATIONS
2021 is an opportunity for business owners to rethink their physical store experience. Since the pandemic began, contactless payment methods (i.e. mobile payments) in stores grew by 13% in the United States. For many small businesses, mobile payments are an easy way to digitally integrate stores. Other forms of digital sales like curbside pickup are also incredibly important to invest in and expand. Curbside pickup sales increased 208% during April 2020 alone. In 2020 overall, 85% of shoppers have increased their curbside pickup usage. Experts highlight “digital screen browsing” as one growing trend to consider here. A recent industry report notes “Kiosks or apps that enable shoppers to easily browse products or categories or customize products, or that feature navigation tools to help shoppers move through the store quickly” are useful technologies that positively influence consumer experience.
Now more than ever, retail = convenience. Customers have long expected free shipping, fast delivery, and easy returns when shopping online. However, 2020 witnessed a massive shift in consumer behavior, and customers will expect even more from their online experience moving forward.
At CASTUS, we specialize in planning and implementing successful strategies for business growth. 2021 is an opportunity to reimagine your business. Let us help you rethink your digital business strategy.