The good news is retail sales continue to rise month-over-month. With a strong economy and low unemployment, sales are forecasted to remain strong throughout 2019, though the rate of growth is expected to slow. However, there are grayer skies ahead in the long-term. Forrester and other research organizations predict that a slowing economy is inevitable, and for retailers to remain strong when consumer spending slows, they’ll need to focus on longer-term strategies that drive loyalty. Here’s what the experts say are most important for success in the year ahead.
Experiences that compliment products
It’s well documented that Millennials prefer experiences over products. The next generation of shoppers, Gen Z, retain some of these experiential preferences but have upped the bar even further and show favor to brands who also demonstrate a high level of authenticity. All of this points to a demand for more in-store experiences to attract shoppers. Savvy retailers including Sephora and REI are leading the way with hands-on classes that encourage plenty of sampling while demonstrating how to incorporate products into busy lifestyles.
Customer data integration across systems
“Retailers must have a full picture of their customers, and act on that picture to compete effectively,” notes Salesforce Vice President of Strategy and Insights, Rob Garf. The problem, though is that research shows organizations use dozens of systems to manage customer relationships, resulting in disjointed and frustrating experiences. As information merges and talks to each other, it will provide a 360-degree customer view and finally deliver on the promise of more actionable information thanks to AI. That’s because AI results are only as good as the data it’s fed, and right now, it’s mostly feasting on disparate and incomplete data.
A more mature machine learning
With systems merging together and fostering an environment where AI can be more fully realized, with a focus on driving more accurate machine learning, a more mature technology landscape will evolve. It will be less about testing and implementation and more about measuring ROI. Specifically, smart systems will be able to offer highly relevant product and service recommendations. In addition, it will help with more accurate forecasting and enable retailers to predict customer behavior at specific times and places. Which in turn will serve as a guide to help them deploy the most appropriate staff where they will be most effective.
Social causes to drive loyalty
From the announcement that Starbucks will ban single-use straws, to brands including Warby Parker or TOMs who match sales with donations, more brands are choosing to build loyalty by giving back. Research has found that Millennials and Gen Z are more likely to incorporate social good into everyday life by doing everything from recycling to choosing to buy from brands that make sustainability and charitable practices a core part of their business.
Customer experience remains a critical factor
There’s no escaping it, customer experience is one the most important factors for consumers when choosing where to spend their money. Unfortunately, many brands continue to struggle, notes Forrester Research. In addition to better merging data to enable more accurate predictions, brands can improve the experience by empowering consumers to take the driver’s seat. One such way is to enable appointment scheduling at brick-and-mortar locations. Whether customers require personal shopping services or desire an expert associate to pick out a washing machine, make it easy for them to determine where and when they come in. And personalization doesn’t just make the customer more satisfied, it helps boost the bottom line, too. Engageware research found that more than 40% of consumers would pay 10% more for a highly personalized experience.