Commentary: How to Take Advantage of a Resilient Economy and Keep Pace with Consumers
A resilient economy has left retailers optimistic about the sales environment moving forward, but concerns persist about keeping up with evolving consumer behaviors. Retailers enjoyed another strong year as the U.S. economy quietly grew by 2.9% in 2018 amidst negative headlines around a volatile stock market. This strong economic foundation on top of the Federal Reserve’s decision to pause rate hikes has more than 60% (63.37%) of retailers confident they will grow sales in the next 12 months, according to a TD survey of retail executives at the NRF Big Show on Jan. 14 in New York.
However, to make this expectation a reality, retailers understand they need to stay ahead of their competitors while catering craftily to their customer base. Nearly 65% (63.4%) of retail executives responded that their biggest concern is changing consumer habits, compared to a year ago when retailers did not pinpoint a single overwhelming fear.
Here’s how retailers can keep pace with and retain customers in this fast-moving retail environment.
Form mutually beneficial partnerships
The transformation of the retail landscape led by Amazon and other e-commerce platforms has conditioned consumers to expect fast delivery times and around-the-clock access to their favorite stores. Nearly all retailers have transitioned from exclusively utilizing brick-and-mortar stores to offering online and mobile shopping platforms. But it’s now hard for retailers to expose finicky online shoppers to new products without appearing intrusive.
To overcome this newly complex consumer, retailers should look for partnerships to grow their brand and improve customer awareness. For instance, rather than trying to compete with Amazon, thousands of retailers have teamed up with the tech giant to give Amazon permission to sell their goods on its site (which accounts for nearly 50% of all U.S. e-commerce). At the same time, Uber and other ride-sharing companies have partnerships with a number of firms to either encourage customers to visit certain retailers or ship products to their homes.
Invest in technology
Wary of falling behind the market, retailers are ramping up their investment in technology. Over 40% (41.6%) of retailers surveyed said technology solutions will be their biggest investment over the next year, the most popular response. However, these technological enhancements should not be limited to their online and mobile platforms. Retailers should also prioritize improving their in-store experience through innovative technologies.
Despite the emergence of e-commerce, roughly 90% of all shopping still takes place in stores. Consumers enjoy shopping in-person for a variety of reasons, including trying out a product, trying on clothing, talking with experts, socializing, and being able to bring a product straight home rather than waiting for delivery. However, now more than ever, customers place an emphasis on convenience, and retailers need to offer a seamless shopping experience to attract this new consumer base. This can be a multi-faceted effort, where the shopping begins online when consumers select goods they’re interested in, try the product in the store, and then have it shipped to their homes the next day.
Retailers that invest in the necessary technology to synchronize their operations and improve their customer experience can reap the benefits of this still very lucrative in-store shopping market.
Trust builds business
Even as retailers appear to be in a never-ending race to the bottom when it comes to prices, consumer trust still holds significant value in this transformed age. It’s certainly not the sole factor, but when customers are choosing between two competitively priced goods, they almost always will select the brand or store they feel most comfortable with. To help foster this relationship, retailers need to practice transparency at all times. One negative experience is a click away from being posted online and damaging a retailer’s credibility.
Once a retailer earns a consumer’s trust, it lends to enhanced spending opportunities. These consumers become confident in the products they are purchasing, and thus are more willing to consider higher-priced goods. Offering financing solutions can make expensive upfront purchases affordable. Instead of customers experiencing sticker shock from a $1,500 phone, an equal payment plan over 24 months provides a manageable alternative.
The retail market has transformed, but its core mission has remained static – stimulate demand. All these solutions fundamentally help drive customers to a business and make them loyal shoppers. Retailers can’t be afraid to try new strategies until they find the right formula to thrive in this constantly evolving landscape.
Mike Rittler is head of product management and merchant relations at TD Bank.
However, to make this expectation a reality, retailers understand they need to stay ahead of their competitors while catering craftily to their customer base. Nearly 65% (63.4%) of retail executives responded that their biggest concern is changing consumer habits, compared to a year ago when retailers did not pinpoint a single overwhelming fear.
Here’s how retailers can keep pace with and retain customers in this fast-moving retail environment.
Form mutually beneficial partnerships
The transformation of the retail landscape led by Amazon and other e-commerce platforms has conditioned consumers to expect fast delivery times and around-the-clock access to their favorite stores. Nearly all retailers have transitioned from exclusively utilizing brick-and-mortar stores to offering online and mobile shopping platforms. But it’s now hard for retailers to expose finicky online shoppers to new products without appearing intrusive.
To overcome this newly complex consumer, retailers should look for partnerships to grow their brand and improve customer awareness. For instance, rather than trying to compete with Amazon, thousands of retailers have teamed up with the tech giant to give Amazon permission to sell their goods on its site (which accounts for nearly 50% of all U.S. e-commerce). At the same time, Uber and other ride-sharing companies have partnerships with a number of firms to either encourage customers to visit certain retailers or ship products to their homes.
Invest in technology
Wary of falling behind the market, retailers are ramping up their investment in technology. Over 40% (41.6%) of retailers surveyed said technology solutions will be their biggest investment over the next year, the most popular response. However, these technological enhancements should not be limited to their online and mobile platforms. Retailers should also prioritize improving their in-store experience through innovative technologies.
Despite the emergence of e-commerce, roughly 90% of all shopping still takes place in stores. Consumers enjoy shopping in-person for a variety of reasons, including trying out a product, trying on clothing, talking with experts, socializing, and being able to bring a product straight home rather than waiting for delivery. However, now more than ever, customers place an emphasis on convenience, and retailers need to offer a seamless shopping experience to attract this new consumer base. This can be a multi-faceted effort, where the shopping begins online when consumers select goods they’re interested in, try the product in the store, and then have it shipped to their homes the next day.
Retailers that invest in the necessary technology to synchronize their operations and improve their customer experience can reap the benefits of this still very lucrative in-store shopping market.
Trust builds business
Even as retailers appear to be in a never-ending race to the bottom when it comes to prices, consumer trust still holds significant value in this transformed age. It’s certainly not the sole factor, but when customers are choosing between two competitively priced goods, they almost always will select the brand or store they feel most comfortable with. To help foster this relationship, retailers need to practice transparency at all times. One negative experience is a click away from being posted online and damaging a retailer’s credibility.
Once a retailer earns a consumer’s trust, it lends to enhanced spending opportunities. These consumers become confident in the products they are purchasing, and thus are more willing to consider higher-priced goods. Offering financing solutions can make expensive upfront purchases affordable. Instead of customers experiencing sticker shock from a $1,500 phone, an equal payment plan over 24 months provides a manageable alternative.
The retail market has transformed, but its core mission has remained static – stimulate demand. All these solutions fundamentally help drive customers to a business and make them loyal shoppers. Retailers can’t be afraid to try new strategies until they find the right formula to thrive in this constantly evolving landscape.
Mike Rittler is head of product management and merchant relations at TD Bank.