JENNIFER UMSTEAD on 14 February, 2017 at 11:02
Ogilvy’s Continuous Commerce™ team kicked off the new year with the National Retail Federation’s annual “Big Show” conference. The team was able to hear from some of the best in the retail industry in this three-day event, and explore the latest technologies on the expo floor. On reflecting the show, here are our top three takeaways:
Get Ready for Gen Z
Millennials move over, Gen Z is here and ready to make their mark. Generation Z, the newest generation, is starting to make an impact in retail buying. According to Forbes, Gen Z can be approximately classified as those born in and after the year 2000, making up 25% of the US population. That makes Gen Z a larger percentage of the population than Baby Boomers and are quickly approaching Millennial levels.
Gen Z is not only large in size but strong in purchasing influence. According to an IBM study (of 15,600 people in 16 countries), Gen Z has $44 billion in purchasing power. Furthermore, Gen Z influences 93% of the family budget. The study also shows that Gen Z is all about mobile; 25% of Gen Zers spend over five hours per day on a mobile device. Mobile is being used for everything from socializing to entertainment, to learning to purchasing. Gen Z is the first generation to be born into a life where mobile technology is omnipresent; it is all they know. This transitions to their omnichannel approach to shopping. Gen Zers want to browse online and in stores, and they are looking for a seamless experience no matter what the channel. If a brand can’t pivot quickly to their needs, they will drop it quickly.
To tap into Gen Z and their growing purchasing power, brands need to be mobile-savvy, create a seamless, omnichannel experience and respond quickly to their needs. They are a new, but powerful group of buyers, so it’s important to start preparing for them now as they are impatient due to their overstimulation to technology.
Omnichannel means more than just multi-platform
Omnichannel may not be a new topic of discussion, but it is still hugely important, as retailers are still underperforming in connecting their browsing and purchasing experience seamlessly. The industry shows a gap in mastering the omnichannel experience. Brands must make sure their brick-and-mortar brand image translates seamlessly to their online image, on mobile apps, and to their in-store experience.
A successful brand provides the same caliber of experience both online and in stores. According to PricewaterhouseCoopers, 40% of consumers believe a knowledgeable sales associate would enhance their shopping experience and 66% of people said they would return to an online store that had a live chat option versus one that did not. By having both in-store and online customer experience a customer will feel valued and better able to engage with the brand.
Brands also need to create a seamless transition when customers move between channels. At the NRF we heard many brands speak about the challenges they faced with the in-store delivery and pick up options during the holiday season. They either didn’t have the storage facilities, employees were overwhelmed by the influx of customers, or their digital processes failed and they had to switch to manual procession. With a 13% rise in online sales during the holiday season from 2015 to 2016 (according to Forrester), brands must continue to improve the interaction between platforms.
Overall brands need to be sure to not just invest in having an omnichannel experience, but that they are truly connected in creating a single, unified brand. A strong brand is vital and if one of your channels does not reflect your brand and the experience customers have come to expect, it could lead to a loss of customers.
Personalization is key
We all know how valuable it is for a consumer to feel that a brand really “gets” them and with the rise of data and new technologies, personalization is going to continue to grow and improve. So how can a brand stay up to speed?
Data. Data leads to a personalized experience. Most brands are constantly mining the profiles of people who shop on their online presence and in their physical stores, but they don’t all take advantage of it. You can glean so much information but you then have to put it to use. Don’t stop at just building buyer personas and customer segments—get it down to the individual level. Jodie Fox, co-founder of ‘Shoes of Prey’, said that while it starts with the persona “then go in and make sure we’re having those one-to-one recommendations.” Amazon makes 30% of their sales through personalized recommendations via the data they captured, which other brands could replicate to generate more sales.
Personalized targeting leads to higher conversion rates. In fact, according to a report by Lyris, personalized email offerings led to a 39% higher open rates and increased conversion rates of 18%. Brands are then also able to retarget, which 69% of respondents said they liked, in a Listrak & Harris poll. This demonstrates how implementing learnings from data can enhance a company’s bottom line.
Being able to connect with a customer on an individual level will lead to higher engagement rates and as a result, higher sales. So the brand’s job is to ensure that they take advantage of every opportunity to personalize the customers brand experience.
Erika Koiva also contributed to this article.
