New tech platforms and evolving consumer attitudes are fundamentally changing the way we shop. Trends such as social commerce and live shopping are on the rise, and brick-and-mortar stores are experiencing a cabin fever-fueled boom. The challenge for retailers is to find out where they fit in this ever-expanding ecosystem while also delivering the customer experience shoppers demand.
At the recent Fast Company Innovation Festival, global payments and shopping service Klarna hosted a virtual panel entitled “The Retail Revolution.” Sarah Kleinman, global vice president of digital experience at The North Face, and Darren MacDonald, chief digital and innovation officer at Petco, joined Klarna CEO and Cofounder Sebastian Siemiatkowski to discuss current trends in retail and what sellers need to do to stay ahead of the curve. Here are five takeaways from their conversation.
1. China is on the cutting edge of retail trends.
Siemiatkowski suggests looking at the current state of Chinese retail to see where the rest of the world is headed. “They’re 10 years ahead of us,” he says. Specifically, Siemiatkowski expects that retail across the globe will follow China’s lead in the use of livestreaming by brands, retailers, and professional promoters to engage with customers. For an example, he points to the milk-alternative brand Oatley, which runs a popular livestream in China. “The only thing you can buy there are different numbers of boxes of Oatley,” Siemiatkowski says. “And they’re 24/7 live.”
2. Digital strategies need to add value for customers.
Social commerce and e-commerce open up exciting new channels through which brands can engage their customers, but brands shouldn’t be using them simply because they’re there. “[Using] streaming or augmented reality for technology’s sake is not adding value for your consumers,” Kleinman says. For example, her company has used digital channels to focus on helping their customers enjoy the outdoors with tutorials on tent setups or supplies for a rainy hike. Because the content aligns with the brand, she says, it effectively promotes The North Face without shoehorning in a direct sales component. That keeps the focus on the value for the customer.
With a little planning, a livestream can become an event unto itself. “We did [a Facebook Live event] earlier this year called The Perfect Fit,” MacDonald says. “We demonstrated a bunch of pet fashion for dogs…that pet parents really love. It was also an opportunity to bring some shelter animals into the limelight.” The result? More awareness for Petco’s pet fashions and adoptions of all seven shelter animals.
3. The in-store experience will get digital…
After the pandemic’s social distancing slowed in-person shopping, consumers are eager to get back inside brick-and-mortar stores. But these days they’re also used to the convenience of e-commerce experiences such as one-click purchasing or personalized recommendations. Translating that to physical retail will require a continued evolution for retailers. “As a consumer, [you’re] expecting the agent in the store to recognize who you are, to know what you purchased,” Siemiatkowski says. “I don’t think anyone is confused about the experience we would like to have. It’s just a question of how fast can we get there.”
MacDonald believes change will be an imperative across retail. “I think all retailers are going to go through some level of transformation with the brick-and-mortar,” he says. “The question is really the degree of change.” He sees fashion retailers, for example, following Bonobos’ lead: maintaining a small store where customers can try on clothes, but relying on e-commerce to process the transaction and ship the products.
4. …and e-commerce will become more like brick-and-mortar shopping.
While digital channels allow a high level of data-based personalization and convenience, they often don’t give consumers access to specific, real-time expertise. Creating e-commerce experiences that reproduce this perk of in-store shopping will help retailers differentiate themselves in the omnichannel age.
One way to do that is to use digital channels to connect customers to live humans. “We have gone so far as to actually use social networks to better connect even digital consumers with experts and associates in stores,” Kleinman says. Doing so adds not only real-time expertise to the digital experience but also some of that longed-for human interaction.
5. Data can drive better experiences.
We often read news stories about a company’s mishandling of customer data, whether through inadequate data security or targeted content that feels manipulative. But while consumers are certainly concerned with the ways their data is being used, Siemiatkowski believes this trend doesn’t amount to a wholesale rejection of data-based targeting and personalization.
“I think people are a bit tired of getting chased by bad personalization,” Siemiatkowski says. “Like, ‘I clicked on this ad…and now I’m getting chased by a retargeting service for the rest of my life.’ ” If the process is transparent, secure, and consensual, Siemiatkowski predicts customers will be willing to allow companies to use data in ways that enhance their experience.
“I think consumers really are ready to identify with a brand, to build lasting relationships,” Kleinman says. “And as long as that value return makes sense for them, they are willing to participate. And they’re willing to participate across channels.”