How Retailers Can Embrace and Respond to Today’s Chaotic Consumer Behavior

The 2018 retail landscape is one of evolving platforms and new technology-driven consumer dynamics in which they change their preferences and purchasing methods as often as they change their shopping lists.

So, how can retailers keep up with today's chaotic consumer behavior?

Customer centricity is no longer an option, it's a marketing imperative.Today’s consumers are less focused on where experiences take place or what interfaces they use. Instead, they give their attention and business to retailers that take the time to know them and deliver what they want, when and where they want it.

This new reality begs the question: How do retailers adapt, and ultimately thrive, in 2018? To glean relevant knowledge and provide multichannel insights, North Highland surveyed more than 100 senior-level executives in the retail sector. To give the most comprehensive analysis available, all companies represented had 2016 revenue that was more than $1 billon, and had global operations.

Based on the survey responses, the ability to be adaptable and nimble ranked as the No. 1 priority for retailers, with 77 percent stating that these capabilities help them outpace competitors. The research also revealed three key retail-sector themes, which all ladder up to an overarching goal of adapting to changing customer needs.

Digital Capabilities Driving Retail Experience

With 77 percent responding that digital capabilities are a clear differentiator, retailers are looking for ways to harness data, analytics, artificial intelligence, cloud and mobility to truly understand customer behavior and create matching retail experiences. By taking an omnichannel approach, retailers use these information points to deliver seamless, tailored experiences. As noted in another recent guest article by Bart Mroz, CEO of digital commerce strategy firm SUMO Heavy, “the success of brands like Sephora, Ulta Beauty and Rebecca Minkoff shows that consumers are responding to retailers that provide state-of-the-art shopping experiences that are more sensory, information-rich, convenient and personalized.”

A cohesive, cross-channel view of the user experience at every touchpoint gives retailers a better chance of finding their way into constantly changing customer mind-sets. With a deeper customer understanding in hand, retailers can develop new layers of service that further differentiate brand experiences, making them highly personalized and useful for every shopper.

For example, Sephora’s mobile app leverages augmented reality so that customers can “try out” products such as lipstick or eyeshadow without the makeup actually touching their faces. At Rebecca Minkoff’s stores, fitting rooms have smart mirrors that shoppers can use to browse clothing sizes and styles, set mood lighting and request salesperson support.

Level the Playing Field With Mobile

Social media and mobile strategies are another top priority for retail leaders, with 76 percent responding that they are a definite competitive advantage. In spite of the top ranking, only 45 percent responded that they're “very prepared” to address them, revealing a need for retailers to rethink how they deploy mobile technology and staff and support social channels.

Mobile is and will remain a leading sales channel in 2018. A few months ago, over 61 percent of 2017 Black Friday traffic to retail websites stemmed from mobile devices, driving over 46 percent of total online revenue, an increase of 18.4 percent compared with 2016 figures. In response, retailers are continuing to promote deals and loyalty programs through mobile apps while also adding to in-store experiences through indoor positioning and wayfinding. Giving consumers the ability to use apps to find products on store shelves provides a better shopping experience. At the same time, retailers gain information about what shoppers are interested in buying and the paths they take within physical shopping environments, insights that e-commerce providers have had for many years.

A strong mobile strategy also helps build presence and level the playing field between retailers and consumers. One such example is The Home Depot, which provides store associates with company smartphones that serve as walkie-talkies and inventory management tools, supporting the lookup of product information and tracking supply and business analytics. Also, the devices serve as a mobile point of sale, providing checkout anywhere in the store. During in-store engagements with customers, this technology supports employees in co-discovery at the point of sale, providing more value and uncovering opportunities for upselling. A recent report from Forrester ranked Home Depot as having one of the best mobile web experiences for consumers, noting functionality, usability and overall engagement as differentiating factors. For example, the retailer’s mobile app helps customers identify product locations in-store with an enhanced search function that provides the aisle and bay number where an item is located.

Smart Social Strategy Builds Brand Awareness and Customer Loyalty

Social media channels provide a new front line for dealing with customer questions, comments and complaints that can now come from anywhere at any time. Often, retail brands use social channels to promote new products and services, announce sales, and share other content that speaks to a brand’s values, all in support of winning consumer attention. Dedicating full-time staff or hiring an agency to support constant monitoring and content development is one strategy to consider in order to effectively manage social feeds.

A strong social media presence pays dividends beyond answering customer questions or promoting a new product or service. Fast-food chain Wendy’s is known for having a digital team that pays close attention to what’s trending and engages audiences accordingly. Witty and pithy responses garner the brand likes, favorites, retweets and earned media coverage. This came to a head in 2017 when high school student Carter Wilkerson tweeted his desire for free chicken nuggets. Carter’s tweet went viral with the hashtag #NuggsForCarter, resulting in attention from Ellen DeGeneres, a new record for the most retweeted tweet and strong media coverage every step of the way.

Engaging Employees as Brand Ambassadors

Forty-five percent of survey respondents ranked employee engagement as a definite competitive advantage, but only 24 percent feel that they're prepared to address it. Organizations that invest in developing clear mission statements, brand values and company identities can more easily hire talent that shares those viewpoints. Investing in employee experience helps grow brand passion, which creates customer enthusiasm and loyalty. This allows for employee engagement at any level of retail, paving the way for more growth opportunities.

REI is one retailer with engaged employees who have deep product knowledge, enthusiasm to help customers, and lifestyles that represent the brand. Company employees are encouraged to get outside and use the brand’s products so that they can be more helpful when speaking with customers. REI’s focus on developing strong brand ambassadors from within is a differentiator that projects a feeling of connectedness with the customer, oftentimes providing a trusted voice that can be the final push a customer needs to make a purchase.

The Path Forward for 2018

As retailers forge ahead into 2018, their vision and strategy must be based on how to best serve rapidly changing customer needs, and service design must support that vision operationally. How can retailers calm their nerves around embracing new, dynamic customers and matching or exceeding the competition in 2018? Engage consumers by making technology and operational improvements based on the best opportunities to create a personalized, differentiated experience. Even the most fabulously conceived consumer experience is useless without the operational and technological acumen to back it up and engaged employees to deliver it.

Bart DeFoor is a principal consultant at North Highland, a global consulting firm. He has over 19 years of consulting experience, concentrating the last 10 years on the retail industry.