Retail TouchPoints recently released their 2023 Predictions Report for the top trends and tech that will be leading the retail industry this year, asking several retailers for their opinions. They reviewed trends in how companies can maintain growth during economic fluctuation, how to attract Gen Z customers and the growing importance of trust and personalization.
We reflected on these trends and broke out some key themes we expect in 2023:
- customer loyalty
- digital technology and analytics
- community engagement
Retail Loyalty Programs
We’ve all been asked to sign up for a loyalty program during check out at some point. These programs are put into place to entice you to come back by rewarding you — sending out promotional emails, discount codes and new product releases. Many loyalty programs rack up points for you to cash in to put towards your purchases.
Although these programs are effective for many major brands as far as volume of signups, some in the retail industry don’t believe they are attracting and retaining lifelong customers, predicting instead that the retail industry is going to have to reimagine customer loyalty by shifting from a transactional approach to a more engaging experience.
Engaging Experiences to Fuel Loyalty Programs
With inflation continuing to rise, and the aftermath of the pandemic still prevalent, shoppers are even more particular about where they are shopping. Whether it’s for the best deals, best customer service, or best rewards, they are cautious of where they are spending their time and their money. Perceived value of the overall experience has a direct impact on earning a customer’s loyalty. If you focus on giving the customers the engagement they are looking for, rather than transactional programs, you are going to create lifelong customers.
Shifting Away From the Transactional Approach
There is more meaning when considering that loyalty programs are one way of turning an anonymous customer into a known customer. This allows you to customize the shopping experience, which is exactly that non-transactional, engaging experience that shoppers are craving. Taking what you know about your customers and dynamically adjusting messages on digital displays allows you to personalize and optimize messages, even down to customizing a one-to-one message to a loyalty program member. Think of the drive thru or check out lane where a personal message can greet customers, effectively upsell based on preferences and suggest items that are likely to be appealing to that customer. Upon existing, the known customer can be thanked for their loyalty beyond a transactional incentive to return. A final personal message can thank them for their order, and a satisfaction survey lets them know the brand values their input on the experience.
Creating Dynamic Content for Customer Satisfaction
The Retail TouchPoints report says that building customer loyalty goes far beyond the loyalty card, predicting that retailers will need to focus on creating visibility and trust across the path to purchase. We have yet to recover from the supply chain issues we were experiencing at the beginning of the pandemic, making for unhappy shoppers. The silver lining is that technology such as an in-store network of digital displays can effectively, dynamically show what’s currently available on customer-facing screens as well as back of the house displays. This is significant across all areas of retail, including fashion, grocery and convenience stores, as well as in the restaurant industry. Digital solutions are bringing customer loyalty back to life. These solutions and experiences will help retain your current customers while simultaneously bringing new ones in, driving revenue and customer satisfaction.
Digital Technology and Key Analytics in Retail
We live in a digital world and as technology continues to evolve, so does the in-store shopping environment. Businesses need to adapt. Every store is different, therefore, their digital marketing approach needs to be unique so that they stay relevant within their communities. One prediction in the report stated that 2023 will see an increase in bringing localized experiences to the forefront, mentioning that a major big box store recently announced that it would be investing in large-format stores with localized inventory over the next few years, and that other retailers will follow. Digital displays and solutions help to convey this brand value and message to the in-store customers. Gathering insights on customer reaction to any in-store change is vital to measuring success, and adjusting as needed.
Using Analytics Data in Retail Targeting
Imagine walking into a retail store right outside of Philadelphia during a Super Bowl run, and you see a digital display showing that Red Sox apparel is discounted 50% with the scan of a QR code. The strategy is put into place to connect with the local community, and entice them to make a purchase. By having dynamic digital boards, this in-the-moment relevant content can be looped in with corporate brand messaging, local store information and promotions, as well as third-party advertising. You are able to influence and reach more shoppers than ever before. If brands aren’t focusing on digital solutions, they need to. Static boards are unable to keep up with the content demand that digital displays can deliver 24/7/365 in an efficient and effective way.
If the customer decides to purchase the apparel at the discounted rate, the retailer is now able to begin tying this point of sale data to knowing who their in-store customers are. This now keeps them engaged and actively buying from that store, while giving the retailer key data to properly market.
Sensor-Based Technology for Shopping Engagement
That POS data isn’t the only data to collect in the store. Mature, proven and relatively simple sensor-based technology can tap into deep shopper preferences, patterns and behaviors throughout the entire shopping journey — where are the high dwell areas, are the aisles or end caps getting attention, how many people shopped in the high-value floral department — allowing you to market more effectively while learning about the store and its customers over time. When paired with inputs from other areas, such as POS, you can truly get a 360 view of your shoppers and optimize everything from on-screen messages to fixture placement, product positioning, store layout and more. Learn about the technology options for measuring in-store engagement in our blog, and find out which technology is best.
The Need for Technology to Offset Labor
The Retail TouchPoint report doubles down on retailers prioritizing the foundational elements of growth this year. During the pandemic, shopping associates were going above and beyond to ensure customers’ needs were being met. This seems to have dropped off recently as it was not sustainable and supply chain issues were still around. Adding technology in the store helps to offset these labor challenges, introduce automation and keep customers informed. This can include price checkers, assisted selling kiosks, digital shelf-edge displays, in-aisle touch screen displays, pick-up lockers, interactive product finders and more.
Another prediction stated that retailers will be adapting content, products and experiences to Gen Z, noting that while Gen Z might be the most tech savvy, they are also very mindful about how they spend time online. Social media plays a large role in product influence for this generation. Influencers and celebrities post reels and snapshots of their favorite products for their audience, which sends Gen Z searching online platforms and stores for these items. It is a very effective way to market, and one way in-store digital signage can leverage this trend is by displaying this content throughout stores. Having interactive digital displays showing influencers using their favorite products, and even showing shoppers where they can find the products in-store is a game changer for businesses.
Not only is the influencer increasing brand awareness and sales, but Gen Z as a whole has this influence amongst their friends and family. If they enter a store with an easy-to-use, interactive display that gives them exactly what they want in an effective way, they’re going to talk about it. Knowing the persona of your shoppers, whether Gen Z or another generation, allows you to update messages to appeal to their sense of value. If sustainability or getting the best bargain or brand community involvement is top of mind, digital displays allow you to promote, test, measure, adjust and optimize messages quickly.
In order to build brand loyalty, retailers must dive into their customers’ communities. Some brands are using platforms to gain customer feedback on products, new releases, and more, then rewarding customers with special promotions. This builds brand loyalty and creates lifelong customers. If a retailer’s goal is to increase foot traffic in-store, connecting with the community and localizing on-screen messages allow them to be engaged with their loyalists, draw in new customers and convert more casual shoppers into repeat customers. Even updating and optimizing messages to reflect what’s going on with the weather, product shortages or surplus, or cheering on the local sports team can resonate with shoppers, making them feel known and that they know the brand’s values. Local organizations can be given a small amount of time to promote messages or events during looping, scheduled content. Digital signage opens up new opportunities for brand promotion and awareness.
Out of all of these trends, and the ones that didn’t make the cut, it’s safe to say that retailers are going to need to focus on the three overarching themes this year: customer loyalty, data and technology, and personalized engagement. The retail industry is evolving rapidly and retailers need to keep up. Technology is vital to meeting shoppers’ needs and expectations in the store.