Consumer buying behavior has done a 360: Three ways to digitally drive retail sales
A shopper who bought a pair of Calvin Klein jeans at her local Macy's store in 1995 might have been lured by a store circular, by a TV spot touting a one-day sale or by simply browsing the women's department. What a difference two decades make; radically changing consumer buying behavior means digital footprints often pave the path to purchase, as consumers' shopping journeys increasingly originate on digital devices. As a result, savvy retailers are taking a 360-degree view of consumers by tracking their footprints, including pins on Pinterest and their use of shopping apps.
Merchants are integrating data gleaned from these digital touch points to craft more personalized merchandise offers. These are delivered through shoppers' preferred channels for brand interaction. This could be through email promotions or text alerts, for example. Here's how to ensure your business is not passing up this opportunity.
The beacon benefit
Beacons are getting a lot of attention these days, and for good reason. These sensors, embedded throughout a store's shelves, signs and product displays, can interact with mobile devices using Bluetooth signals. Macy's, for example, rolled out ShopBeacon from Shopkick in 4,000 key positions in all of its stores last fall. This was the largest beacon rollout in the retail industry, according to MediaPost. Shoppers who use the Shopkick app in Macy's stores are offered personalized product offers, discounts and rewards.
For retailers, the specialized outreach capabilities of beacons can boost shopper spending, store traffic and customer loyalty. They also have the power to unearth data on shopping patterns, which can help merchants adjust merchandise assortments and store layouts where needed, all while gathering information on consumer buying behavior that can be leveraged even after they've left the store.
Although the use of beacons is still in its infancy, forecasts indicate a strong potential return-on-investment for retailers. At the nation's top 100 retail locations, in-store retail sales influenced by beacon-triggered messages are expected to soar to $44.4 billion from $4.1 billion this year, according to a BI Intelligence report in Business Insider.
Because consumers are spending more of their time on social networks, sales at the top 500 retailers driven by sites like Facebook and Pinterest surged 26 percent last year to $3.3 billion from 2013, according to Internet Retailer's recent Social Media 500 report. Facebook accounts for the bulk of these retail sales, the BI Intelligence report notes, generating 50 percent of total social referrals and 64 percent of total social revenue. Meanwhile, social scrapbooking site Pinterest yields 16 percent of social revenue, although its audience is 6.5 times smaller than Twitter, the report revealed.
Retailers have been testing a variety of ways to churn sales via these networks. Target, for example, highlights "cool stuff everyone's talking about" on its "awesome shop." A virtual visit to the store indicated consumers' top Pinterest pins. As another example, fast-fashion retailer Forever 21 launched a summer promotion wherein shoppers are invited to upload images of their favorite sunny-season outfits from the retailer to Instagram, Facebook or Twitter. Consumers can shop from these selected outfits showcased in these sites' photos, Mobile Commerce Daily reports.
These retailers' efforts reflect a nod to a major shift in consumer buying behavior. Shoppers increasingly value their peers' opinions on products rather than retailers' marketing messages, so stores are exploring ways to leverage a shopper's "thumbs up" on a product in their marketing efforts, as well as user-generated content. According to Mintel research, over a third of millennial women who bought clothing online in the past year cited social media as a leading influence in that purchase.
The power of persistent shopping carts
Consumers are increasingly jumping from smartphone to tablet to desktop computer throughout their purchase processes. While it may seem like a no-brainer, persistent shopping carts retain a record of the merchandise in a consumer's online cart across multiple digital devices and browsers, significantly mitigating abandonment.
Given that millennials are expected to displace baby boomers as the nation's biggest consumer buying group in the next decade, retailers should take note. The millennial generation is almost always connected, be it on social media or on multiple devices. Retailers can turn a significant profit by tapping into these channels.
For more information on how to optimize your retail data, visit the IBM Retail Solutions page.