How to woo the on-demand customer: insights from the UK’s top retailers
We recently brought together a select group of marketing and digital leaders from some of the UK’s top brands for an intimate dinner at Gauthier Soho. Discussion focused on a complex challenge currently facing the retail industry: how to woo the on-demand consumer.
With unprecedented levels of choice for consumers – and competition for retailers – how can brands differentiate themselves, optimise the customer experience, maintain market share and build better customer relationships in today’s digital-first landscape?
Featuring input from brands including M&S, Trouva, Jack Wills, Universal Music, Heal’s, Berry Bros. & Rudd and Figleaves, the conversation covered issues of data and personalisation, hyper-convenience and the future role of the bricks and mortar store.
Here we reveal some of the most crucial insights from the evening.
Do consumers really care about same-day delivery services such as Prime Now?
“It depends on the vertical. There will always be certain things that people want urgently – a last-minute birthday gift, for example. In this case, not offering fast delivery may lose you some business.”
“But when it comes to products that require greater consideration over a longer period of time, like clothing or furniture, the imperative of offering same- or even next-day delivery falls away. While immediate delivery may gain you customers in some verticals – in particular, FMCG – it’s a less pressing concern for those seeking a new pair of trousers.”
“For a lot of online shoppers, the concern isn’t so much speed as ease. Customers want to know when something is coming, so they can plan their day around a specific time slot. So the offer of specificity is a good alternative strategy for etailers who can’t feasibly manage speed.”
Should retailers pass the cost of delivery on to the consumer?
“There’s still a psychological barrier in people’s minds where paying for delivery is concerned – and the concept of ‘free delivery’ is just not sustainable for most retailers. In A/B tests where delivery is made free and base product cost is increased to compensate, conversion rates often rise by a significant margin. So although customers are seemingly reluctant to fund the perceived ‘add-on’ of delivery, they’re happy (or at least happier) to pay for it indirectly via increased product price.”
In an ‘on-demand’ world, is there still a place for traditional offline shopping experiences?
“The role of the physical store in establishing a brand identity remains critical – from the theatre of it, to the service, to the semiotic symbols associated with the business. An online experience is functional at best – that is, at best, nothing goes wrong. Going into a store, on the other hand, still has the power to transform a customer’s day.”
“For those specialising in experiential or high-value products in particular, the customer journey still benefits from a physical experience. Someone buying, say, a pram isn’t going to just click a PPC ad and immediately purchase the product presented. It’s a more complex, multi-step journey than most; the in-store experience can’t be replicated online. In a bricks and clicks business, the trick is to understand where the store visit falls in the buyer journey.”
How will retailers have to adapt in-store experiences to survive, and what will be the role of the bricks-and-mortar store?
“More and more these days, stores are being used as ‘showrooms’ to display products which customers may then go on to purchase online. As an example, the French store FNAC basically acts as a showroom for other brands. Shopping centres are also becoming more focused on offering experiential products and services – for example spas, hairdressers and cinemas.”
“A great example is the LEGO shop in central London, which is more of a media experience than a traditional store. For LEGO, the store is much more about media and branding than actual sales. Similarly, some pureplay brands have now invested in physical stores, using the physical venue to drive demand via other online channels. In these cases, the actual conversion of browser to buyer rarely occurs in-store, but the physical experience is essential to it.”
In the age of the “entitled consumer” (particularly Gen Y & Z), how can we anticipate and fulfill our customer needs?
“The concept of Gen Y and Z consumers being entitled is overplayed. There are certain things that these groups expect to be free – for example, downloads or delivery – but otherwise they’re not that different to other consumers.”
“With this demographic, creating a great brand is the most important thing. If a brand is of sufficient quality, post-millennials will actually pay more for it than other consumer groups. Also, in this ‘attention economy’, on-demand world, brand is one of the few ways to achieve true cut-through. Adherence to brand among millennials is actually extraordinary; businesses such as Supreme, the New York skate apparel brand, have developed an almost cult-like following.”
How can data help organisations develop a single customer view and deliver personalised experiences?
“All things being equal on price, a site that recognises your arrival and interests will nab the sale.”
“In the end, all sales are driven by ads and product exposure in some sense; personalisation is just an more advanced way of driving that exposure. It’s also an area where online retailers can excel; despite technologies like store beacons, bricks-and-mortar vendors still lack resources where customer data is concerned.”
“The trick is to deliver personalised experiences only where they are relevant. If a customer is surfing social media and comes across an advert for your fashion brand, the website of which they visited just yesterday, they may feel spied on. If they’re already on your site actively searching for clothes, however, and you show them products relevant to their last order, they’re more likely to be receptive to the idea of repurchase.”
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