Digital acceleration will be one of the most popular topics in the retail world in 2021.
Coming out of a pandemic-centric 2020, retailers expanded e-commerce capabilities, cultivated (and relied upon) core customers and became creative with customer fulfillment.
How they continue to improve and iterate on those solutions will determine how customers view them in the year ahead.
Expanded service capabilities
Subscription services provide customers products delivered to their doorstep with minimal effort.
Some subscriptions are predetermined; a subscription to a shaving club may mean automatic delivery of razor blades and shaving cream on a monthly basis.
Others might provide something unexpected, an assortment of athletic wear, for example, curated especially for the customer.
During shelter-in-place orders implemented to stem the spread of COVID-19, such services became particularly popular with consumers who appreciated this type of expanded e-commerce capability.
According to Zuora’s Subscription Impact Report, a measure of the economic impact of COVID-19 on subscription businesses, subscription-based revenue continued to grow between March 1 and May 31, 2020, increasing at a 9.5% annual rate.
S&P 500 sales in Q1 2020 contracted at a -1.9% annual rate in the same quarter.
The key for companies will be to not only continue growing its subscriber numbers, but to also increase the average revenue per subscriber.
And that will require a focus on building customer relationships.
One way to do that is to offer incentives for brand loyalty.
Perks that build retail relationships
Some retailers have taken the past year to reevaluate their rewards programs.
As more customers were locked down, retailers saw foot traffic dwindle.
Statista found 52.7% of U.S. Internet users avoided stores due to COVID-19 in February 2020, and a virtually identical number, 52%, who reported shopping more online in May 2020.
Now more than ever, loyal customers need to know retailers are thankful for them and appreciate their business.
Smart retailers are examining the data collected from their loyalty programs and discovering more about the members, so they can tailor rewards that are extraordinary.
The result will be stronger bonds with customers, resulting in more sales and referrals in the future.
Customers who have been cooped up due to COVID-19 restrictions are also hungry for interaction.
Retailers are looking at video to help bridge the physical distance between customer and retailer.
Livestreaming with product and personality
With more than 24 million e-commerce sites vying for attention, using video via livestreaming is a way for retailers to differentiate their brands, even if it does seem a bit nostalgic of Home Shopping Network.
“Live commerce” brings together digital and physical shopping experiences.
While it’s a trend that became more popular as retailer’s faced slower foot traffic as a result of a global pandemic, it’s one that will continue in the years to come.
With livestreaming, or live commerce, customers watch a presentation on a product or service, coupled with a social element such as a video call or comments.
Content can be viewed within a retailer’s app, on a website, social media, etc.
The strategy, especially when coupled with a high-profile celebrity, can yield outstanding results.
For example, in November 2019, Kim Kardashian joined top Chinese influencer Viya Huang on her livestream channel and sold 15,000 bottles of her KKW fragrance in under an hour.
Not all retailers have such firepower available, but livestream events simply centered around “real users” could add the bit of differentiation some may need to jumpstart sales.
The “new normal” for retailers revolves around augmenting the familiar areas of customer experience.
By providing more convenience, working toward improving loyalty, differentiating their brands and working to transform themselves from old sales models, retailers can position themselves for success in 2021.