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Continual retail evolution and seamless buying is rapidly becoming the way people expect to shop and buy. Because disruption at retail is a constant, finding growth in this connected retail world is a challenge as the fundamentals themselves are changing.

Shoppers are humans and humans are shoppers

Fundamentally, human shopper behavior and experience has not changed. People have a want, a need and the desire to consume. Yet, the classic sales funnel no longer works because people want to shop at their own pace, using their own devices, picking retailers that cater to their convenience needs. What this has caused is an explosion of purchase engagement options that don't fit into a nice linear path because shoppers now hold the power of purchase in the palms of their hands. Instead, winning retailers are giving shoppers the right tools to make informed purchases on their own time.

For example, the apparel/fashion industry is giving shoppers entirely different ways to engage with, view and buy products. Increasingly, younger consumers no longer organize or buy by type, such as sweaters, jeans, tops or dresses, instead they're packaging looks based on occasion (i.e. festival, going out, office party), and creating full outfits that reflect an image, role or outward persona they're seeking to emulate. These purchases are then largely driven by now established consumer expectations of personalization, subscription and curated selection and are delivered via occasion-based marketing at places like Target (via pop-up departments around high-volume time periods).

Behavior shifts cause store format shifts

With in-store stock-up shopping down and quick trips now encompassing nearly 50% of all grocery trips, convenience-oriented shoppers have caused retailers to re-evaluate not only their store formats, but also product mixes and SKU assortments. Not only is this because of changing shopper behaviors, but it is also a direct reflection of the fast 8% growth rate of e-commerce sales in grocery.

This new dynamic shopper mindset requires retail alignment based on three key step-changes that further "humanize" product offerings both in-store and on the virtual e-commerce shelf.
1. "Value" transference — A fundamental shift from sole price association to more of a variable factor based on self-gratification and what the product "does" for the shopper.
2. Routine simplification — Online grocery pick-up, services like Instacart coupled with easy to use of digital tools are changing in-store formats.
3. Self-reflective shopping — Retailer apps now allow more reflective shopping based on the how and what people shop for.

Even though connected shopping reflects the best opportunity for total retail growth, statistics confirm that physical stores still draw a majority of all trip types. What this means is that a mix of bricks and clicks is required because as data has shown, the omnichannel shopper is the highest value-shopper, representing 7% of all customers but a four-times larger (27%) share of sales.

Key pillars of a connected commerce experience

In a complex shopping environment, the simple truth is that people don't shop in silos and thus manufacturers are being forced to respond holistically. It's now time to drop the e from e-commerce and manage businesses seamlessly, as one commerce. This demand is no longer a nice to have; it's becoming a must have because shoppers are being conditioned and expect a variety of solutions to meet their needs. Remember, shoppers now have the power because of technology, and online buying has given them to tools to buy anywhere, anytime.

As seen in early 2019 retail indications, shoppers seek convenience, experience and seamless buying based on the following:

  • Personalization – by leveraging a blend of retailers and manufacturer data to inform and drive shopper offers and experiences.
  • Fulfillment – by driving convenience for shoppers and closing that "last-mile barrier" through optimizing business operations.
  • Retailer media – engagement on on-platform retailer media networks (Walmart Media Group/Target Media Group) to supplement off-platform and brand media efforts with messages driving conversion and maximizing brand presence within the long-tail of the digital shelf.
  • Multi-channel engagement – ensure you're keeping the total experience in mind, supporting behaviors across desktop, mobile, voice, and AR/VR to respond to the ever-changing shopper needs

Harnessing data

Some major retailers are starting to bill themselves as technology companies to narrow the Amazon gap. In doing so, they're having to harness multiple data sources to go one level deeper, thinking about product assortment, fulfillment and logistics. Essentially, they're honing in on the promise of precision retail where data sits at the center. Embodying this data-first approach, the core tenets of connected precision retail then become:

  • Continually keeping items in stock.
  • Predictive buying behaviors (potentially based on AI).
  • Consistent data driven digital content (fostering engagement).

As one major CPG marketing executive put it, "As traditional marketers, we're trained to manage brands at the macro-brand level. With online sales/e-commerce, you must manage at the SKU level. None of us were trained to work that way." With digital commerce driving 82% of total market growth, it's clear retailers need to act on changing shopper behaviors and look at the full connected commerce picture.

The future of retail requires a mix of bricks and clicks where data and the in-store experience are coupled with choice and consistency online. And, as with anything in today's hyper-convenient retail world, appeasing shoppers' needs for immediacy delivers on the promise of a truly connected retail experience where commerce no longer needs an 'e' in front of it.