Lessons Learned: Taking Retail Marketing into 2021 and Beyond
As 2020 comes to a close, there are glimmers of hope for the retail industry that better days are ahead in 2021. First, the National Retail Federation reports a V-shaped recovery, with September marking the fourth straight month of year-over-year gains. Second, the U.S. Census Bureau, which monitors COVID-19 impact, announced that overall retail sales in September were up 1.9% seasonally adjusted from the previous month and up 5.4% year-over-year, more than triple and double the increases of August, respectively.
While being on the road to recovery is welcome news, retailers must be aware that as customers return in 2021 they will have increased expectations for highly personal, relevant experiences. With the pandemic causing seismic shifts in how people shop, work and socialize, time seems more valuable, and patience wears thin for any interaction that lacks meaning. A recent survey conducted by Dynata, on behalf of Redpoint Global, demonstrated the evolving customer expectation for relevance, with 70% of consumers saying that this holiday season they will exclusively shop with brands that demonstrate they personally understand them. Changing behaviors are reflected in Deloitte’s 2020 holiday retail survey, where 73% of those surveyed said they plan to have items delivered this year, up from 62% last year. Furthermore, the number of consumers planning to use curbside pickup doubled year-over-year.
Close the CX Gap in Retail Marketing
To meet increased expectations for personalized, digital-first experiences, 2021 will be a make- or-break year for retailers to make the necessary investments in data, personalization, automation and machine learning to close the customer experience (CX) gap. The customer experience gap measures the ability of brands to deliver the type of frictionless, personalized experiences that today’s connected consumers expect – across all channels and touchpoints. In a recent Harris Poll sponsored by Redpoint, 73% of consumers believe brands fall short of their expectations for personalized omnichannel experiences. Brands have, to now, underestimated the depth of the gap. Customers are 2.5X more likely than marketers to say that brands struggle to meet those expectations.
The problem for brands is that the gap is increasingly becoming a deal-breaker for the customer. In the same poll, 37% of consumers said they will stop doing business with a company that fails to offer personalization. That survey was conducted pre-pandemic; the delivery of a superior CX is likely even more of an imperative today. Brands that ignore the need to compete on a superior CX do so at their peril.
A Single Point of Control
Successful brands, meanwhile, will fundamentally change their value proposition in response to changing consumer behaviors.
Already largely commoditized, the importance of price and product will wane as customer experience is prioritized as a competitive differentiator. Delivering a personalized CX, as always, depends on recognizing a customer’s behaviors and preferences, but it also now depends on providing meaningful interactions that align with a customer’s values and interest.
Brands must be clear about what they represent, not just what they sell.
Recognizing a customer as an individual with unique preferences is the core of a personalized customer experience. It transcends superficial, high-level touches such as serving up a recommendation based on look-alike segments. Rather, it is being ready to deliver a next-best action for an individual customer on any channel, relevant to where the customer is in their specific journey with a brand.
With customer journeys becoming more dynamic, real time and digitally focused, the only way to provide a seamless CX across physical and digital touchpoints – at scale – is to integrate customer data from every source onto a single digital platform. This provides brands with a single point of control over data, decisions and interactions to orchestrate individualized and highly relevant customer experiences, resulting in a next-best action that drives a desired outcome.
An AI/ML Tipping Point
Because individualized customer journeys are more dynamic and unpredictable, I see 2021 as being a tipping point for the use of AI and machine learning as key tools in a marketer’s quiver for creating innovative, revenue-producing customer engagements. Many marketing organizations have, until now, viewed advanced technologies as somewhat ancillary rather than integral to overarching goals. But delivering personalized and highly relevant experiences to a segment of one, at scale and in real time, requires machine learning to ensure that a brand keeps up with the cadence of the customer throughout an omnichannel journey.
Ride the Road to Recovery in the New Year
Superior customer experience has long been understood by marketing teams as a driver of new revenue and business growth. Current events have accelerated the timeline for brands to meet increasing customer expectations for personalized, relevant omnichannel experiences, especially with customers changing behaviors in unexpected ways.
The coming year will present brands with a final opportunity to close the CX gap by demonstrating a keen understanding of an individual customer’s preferences, behaviors and values. Using data and analytics to provide a personalized customer experience across channels will be a make-or-break proposition for brands in 2021. It will be the difference between riding the road to recovery or being left behind in the ditch wondering what went wrong.