The rise of the “phygital” shopping experience. An uncertain economic outlook. Changing consumer media consumption habits.
It’s no exaggeration to say today’s shopping experience — and the retail vertical, in general — is unlike any seen before. But for retail brands, understanding what’s going on in the industry is different than being able to navigate it.
From Post-Pandemic Enthusiasm to Everyday Wants and Needs
It is no surprise that shoppers returned to stores enthusiastically with the gradual lifting of pandemic-related health restrictions. After over two years of quarantine, the rush back to the old-fashioned way of buying provided a way to, again, be social. It also contained the added benefit of instant purchasing gratification.
As much as the consumer of today does not mourn the loss of pandemic-related shopping mandates, such as masking indoors, there are conveniences that live on.
For instance, take curbside pick-up and same-day delivery. These e-commerce options became the “new normal” for brands to still service customers when store operations were limited due to pandemic-related restrictions.
Unsurprisingly, reporting suggests, and retail brands should note, shoppers now want these conveniences to remain even though COVID health restrictions have been lifted, thus further encouraging today’s “phygital” — or physical-digital — shopping experience.
The Will-It or Won’t-It Recession
The rise of physical-digital buying experiences isn’t the only factor contributing to transformation in retail. Today’s rocky economy is driving further change in the industry, if not complicating the direction of the vertical for the rest of 2023 (and likely beyond).
For example, take consumer willingness to spend during the year’s first half in the face of decades-high inflation. Despite purchasing dips in February and March, purchasing bounced back in Q2 with month-over-month increases from April to June. Why? Analysts point to the “resilient consumer,” even as other economic areas show worrying signs.
But how concerned should consumers (and retail brands) be about those worrying signs across the economy?
Despite some relatively good economic news, like low unemployment, there is reason to believe consumer spending could start to feel the impact of financial uncertainty in 2023’s second half. For example, in May and June, spending was lower than expected, suggesting the factors of persistent inflation, rate increases and a drawdown in pandemic-era savings are slowing retail momentum.
New Solutions for a New Retail Landscape
The combination of digital-physical purchasing and an uncertain economic outlook has resulted in a dynamic retail buying experience. That’s spurred deal-conscious purchasing across the vertical, yet a willingness to spend on goods that provide something consumers crave in post-pandemic life: a seamless shopping experience.
Delivering a seamless shopping experience, however, means reaching consumers where they’re paying attention — a problem for retail brands relying on traditional marketing methods, such as third-party cookies.
As you may know, cookies are slowly being phased out of, well, everywhere. Apple no longer allows them on the iPhone in an effort to assuage consumer concerns about companies sharing their personal information without consent. Google, which has pushed off sunsetting cookies for the last few years, has committed to removing 1% of them in Q1 2024 and concluding them entirely by the end of that year.
But, retailers may already find that cookies are ineffective. Cookies emerged at a time when brands could count on single-device conversions, i.e., a consumer would see an ad and then purchase on the same device. Flash forward to 2023, where owning multiple devices is “de rigueur.” To add a further sticking point: video and audio streaming services do not support the third-party cookie.
Personalizing the Shopping Experience Across Today’s Media Landscape
Yet, delivering the personalized and seamless shopping experience consumers desire is not impossible.
In Viant’s latest cheat sheet, Personalizing the Shopping Experience Across Today’s Media Landscape, explore how people-based technology can help brands navigate the evolving retail industry and deliver personalized, privacy-minded campaigns across traditional and emerging ad channels.