Raydiant’s new series, the Future of Shopping, interviews experts and thought leaders with a goal of better understanding what organizations can do to prepare themselves for what lies ahead.
The following is an interview we recently had with Justin Scott, CEO of ATLATL.
How has consumer shopping behavior evolved over the past 5 years?
Ease of access and the infinite shelf mentality of e-commerce has accustomed shoppers to being able to discover, select, and quickly obtain almost any product or service they need at the click of the button. By 2025 e-commerce is expected to account for nearly 25% of total global retails sales, compared to 2016 when it was just over 7%. Across verticals, buyers are no longer limited by what is on the store shelf, and their expectations of brands and product availability have grown in accordance with technology. Consumers have become more comfortable with shopping online, and have demonstrated a great willingness to exchange the ability to physically touch a product prior to purchase for the convenience of having it delivered to their door, particularly in the case where free returns and exchanges are points of parity between brands.
It is not only the growth of e-commerce that has shifted consumer behavior, but the immense amount of information available has also shaped how consumers shop in-store, with 81% researching brands online prior to a purchase, and 59% actively reaching for product information or pricing while in a store. Consumers have been granted access to the infinite product shelf, which in turn has driven a greater desire for finding exactly what they are looking for. Whereas swapping the red for the blue or not having all of the bells and whistles that they wanted may not have inhibited a sale previously, the option to locate or in some cases design their perfect product has translated to shifting consumer behavior where substitutions and concessions in purchase are less tolerated.
What are the top 3 trends shaping the ways consumers shop?
Omnichannel. Consumers will gravitate towards the brands that provide the best experience with the greatest level of convenience to them, but what is convenient is not always the same channel. Brands who have found the greatest success in this changing market are those that have adopted an omnichannel approach, going further than just being available through several channels, but ensuring that the experience with each channel delivers the same level of value and brand equity across the board. While many DTC’s have achieved their primary success online, we are seeing more and more adoption of store-in-store concepts, pop-ups, and partnerships that allow consumers to pick and choose how they will interact with brands. Particularly as physical retail sees upticks in traffic, we see consumers who are interested in purchasing different brands or purchasing their favorites through new channels.
3D & A. AR has been the darling of the gaming world for a number of years, but we are seeing more brands bring this technology into the shopping experience. Virtual try on, in home design, and even car shopping are a few of the ways that AR has enabled a more immersive shopping experience that consumers are excited about. Consumers are looking for more information as they shop, and 90% of the information processed by the human brain is visual. Shoppers want confirmation that the product will look like the picture. Most consumers are unaware that many of the product “pictures” that they see online are actually 3D models. Now brands are taking that application a step further to allow shoppers to interact and evaluate a product in an immersive environment. The addition of AR to the shopping world has seen benefits for both consumers and brands. 66% of consumers surveyed by The Harris Poll indicated that they would feel more confident in purchasing a product if they could experience it in 3D or AR, while a study from Shopify found that products enabled with AR saw 94% higher conversions than those without.
BOPIS/Click & Collect. Consumers will generally choose convenience, and there are few things in the world of commerce that are as convenient as having access to the immense product list available online combined with the speed of grabbing it from your local store. By the end of summer 2020, 44% of retailers had begun to offer BOPIS, and estimates by eMarketer put BOPIS’s share of e-commerce sales at over 9% for 2020. While the growth of click and collect sales are not expected to grow at the exponential rate we saw in 2020, experts agree that the trend is here to stay, and will continue to account for 10 -11% of e-commerce sales through 2024. For the consumer, the benefits of BOPIS extend beyond convenience, with 73% of those surveyed indicating that the ability to see the product before bringing it home drove their decision. 65% have used BOPIS to avoid shipping costs. For brands, the foot traffic generated by BOPIS has also proven to be lucrative, as 49% of consumers have made an additional purchase while in the store to grab their order.
What’s the future of shopping?
While physical retail will never disappear, the way in which it is utilized in tandem with digital experiences is quickly evolving. Consumers now view the buying experience as part of the product and will evaluate products against the experience as a whole, as opposed to the pure functionality of the product. To satisfy those expectations, brands must deliver exceptional online and offline experiences that are consistent with the brand identity and value that consumers associate with that brand. Enhancements such as virtual try on, BOPIS, and more immersive store experiences will combine to deliver the convenience and confidence in purchase that consumers will demand.
What are 3 actionable steps an organization can take to prepare for the future?
Focus on experience. For many product categories, there is a great deal of parity among products and product features. Where brands can stand out is in making the experience of purchase and ownership a unique and valuable one. Whether that is a specialized delivery program or the experience of customizing or configuring the product, do it better than the competition.
Put your data to work. Google may be putting a damper on advertising data, but your customers provide you with incredibly valuable insights that show how they want to shop and what they want to buy. Go beyond the established KPIs for sales and channel metrics to see how your customers are finding you, how they choose to shop, when they choose to shop, and where there are opportunities to improve your touch points with them.
Don’t hesitate on technology. Technology has become a central part of commerce, and in the past many of the largest innovations were prohibitively expensive to implement.. With today’s rate of growth and innovation, the latest technologies are more readily available and affordable than many tend to believe. If there is a technology that would aid in your business or improve your customers’ experience, there is most likely a partner out there who is doing it at a scale or price that you can work with. Don’t wait and give your competitors the edge.