This is reflected by an increasing shift to ‘promiscuous’ shopping behaviours.
People are increasingly becoming disloyal and unsentimental in search of lower priced and more convenient alternatives.
Global shopper sentiment is shifting from effort to entitlement, with people wanting and expecting more from their retail experiences.
In the past, price promotion has largely been the answer. While shoppers will always favour paying less, there is now a danger of them becoming promotion weary.
The 2013 IRI Pricing and Promotion Survey highlights that volume growth from promotions dipped in recession hit Europe.
European shoppers grew adept to seeking out the best offers and switched brands and retailers to do so.
As a result, brands and manufacturers have been moving towards less emotionally rewarding and meaningful exchanges with customers.
The European example points to a worrying shift, especially when you consider the number of retailers and brands reliant on promotions to drive sales.
To sustain and grow business, we need to take a holistic approach to the relationships we build with shoppers at every touch point.
Why? Because at it’s very core, great retail is built on emotional connection.
Best practice retail in the future will increasingly drive growth through return on relationships (ROR) and experiences (ROE). Here’s three key strategies to consider.
1. Humanise the experience: Better service
In an effort to reduce cart abandonment, The North Face set out to humanise its e-commerce platform.
The aim? To turn it into an interactive experience that better replicates the customer service provided in physical stores.
By leveraging new technology, The North Face has been able to combine both context and content to generate smarter customer solutions and build closer shopper relationships.
Its new shopper experience is based on deeper levels of engagement and trust than previously possible.
2. Connect on purpose: A fair exchange
Marks & Spencer was finding it difficult to drive high levels of impact among shoppers for its sustainability efforts. The solution was ‘Schwopping’.
This initiative rewarded shoppers for swapping one unwanted item of old clothing for every new item bought at M&S, playing to shoppers’ increasing demand for sustainability and value.
3. Understand me: Data fuelled insight
Cosmetics chain, Sephora, says it’s staring down the danger of digital erosion and welcoming instore online browsers in the name of driving sales and building loyalty.
Customers are encouraged to download the retailer’s Sephora to Go app, which contains a breakdown of past purchases, sortable lists of the Sephora product ranges, and user reviews.
Sephora’s dedication to customer loyalty goes as far as offering wi-fi instore to potentially showrooming customers, so they can use the app.
The value offered by the app is far reaching, with users able to see the amount of points they have left (a figure updated in real time as they make purchases).
They are also given suggestions around products to redeem points against, and can figure out what they can obtain with their points before visiting a store.
The new generation of shopper is connected by the common desire for deeper levels of exchange and engagement from brands.
In the year ahead, brands should be focused on creating stronger relationships that build value for both their businesses and shoppers.
It’s definitely time to rekindle the romance at retail.
Caroline Ghatt is planning director (brand and retail) at Leo Burnett Sydney. She works on shopper insights and retail activations for Caltex, McDonald’s and Canon.