Customers Want Experiences, Not Products: Conclusions from NRF 2019
What can e-commerce companies learn from NRF 2019, the world's largest retail conference?
During the 2018 New York Fashion Week, a makeshift pop-up store appeared on Canal Street. Called “Deisel”, it sold clothes that looked like copycats of a famous brand. Bright-coloured cartons carried tacky marketing slogans scribbled in marker; clothes rolled around in boxes or dangled on cheap plastic hangers. It turned out, though, that this pop-up store was actually a Diesel campaign promoting a new collection.
Customers lined up in front of the booth to buy clothes branded with a huge logo containing a spelling mistake. They were seduced by the original idea, the wit of it, the affirmation of imperfection. It was not about the products themselves, but about the experience, the feeling of being part of a wryly playful event.
The Diesel case study was quoted during NRF 2019, a.k.a. Retail’s Big Show, the world's biggest retailer conference. The campaign's success clearly shows what today's customers desire: experience. In this article, we’ve collected some interesting trends covered during NRF 2019 that speak to the importance of customer experience.
The Blurring of Online and Offline
It may be common sense to make sure your brand is the same online and off, but 78% of retailers do not provide a unified brand experience across channels. Customers look for consistency not only in the sales process but also in other processes, like complaints and returns. A lot was said about BORIS (Buy Online, Return In Store): customers buying products online and then returning them in a traditional store. In such cases, store assistants should be well prepared – 42% of customers will not return to a store if they do not like the service. And in this social age, unhappy customers are likely to share their frustration on social media.
Another interesting trend is how some formerly purely online retailers are starting to build a physical presence. They open showrooms where customers can see and touch the company’s products for themselves, talk to assistants, and really feel the spirit of the brand. All of this creates a bond that will be transferred online, which is where customers finally make their purchases.
So, because the line between online and offline is blurred and because customers expect a unified brand experience, omnichannel has become one of the pillars of retail, right up there with having a responsive, mobile-ready website and a smart search engine (72% of users will leave store websites if the search results are not satisfactory).
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How Does AI Fit Into Retail?
What does Artificial Intelligence mean in the context of retail? The go-to response is “personalization”, which has become basically standard (91% of customers are more eager to make a purchase in a store where they are recognised and where they can receive relevant recommendations). But AI can do more for retailers.
Today, complete business models are being based on AI and the data-driven approach. Large pools of user behaviour data allow companies to design predictive mechanisms that provide real-time recommendations to customers and, at the same time, dynamically model prices. This can boost profit and can grow sales volumes (in sales promotions where margins are slashed) or increase the margin (for so-called “long-tail” products).
Thanks to Machine Learning and the continual monitoring of a product’s sales, prices can be optimised on an ongoing basis. Of course, this requires a storage solution for all this data, which is usually Cloud-based – but that’s another article. Suffice it to say that, for many businesses, Cloud storage is the only realistic data storage solution.
Is Voice Commerce the Next Big Thing?
According to ComScore, voice searches will account for 50% of all questions asked to browsers in 2020. Are we looking at the rise of voice commerce?
Voice commerce is an alternative to using a keyboard/mouse to make online purchases – customers search and order using voice commands given to virtual assistants like Siri or Alexa. It is a very convenient solution from a customer perspective; one can shop in any situation – while jogging, driving a car, or even taking a shower. Moreover, voice requests, unlike traditional searches, use natural language. This is close to customers’ everyday speech, which makes voice search user-friendly and comfortable. The process is also faster than searching a product and ordering it from a website or through an application.
Voice commerce does raise some doubt. Customers are mostly visual: they want to see a product before they purchase it. However, voice commerce also offers many new opportunities and may make shopping more convenient and less burdensome, particularly for things like groceries or other staples.
The Way Forward for E-Commerce
Technology is changing the face of retail: in pursuit of offering the best customer experience, companies are relying more on data, applying Artificial Intelligence, optimizing logistics, and automating various processes. But creating the store of the future requires much more than just technology: it requires retailers to become obsessively client-focused, to understand the customer journey, and to cater to customer needs and experiences. Building a brand is necessary, but it’s the emotions we evoke and the relationships we build that are of paramount importance.