From Traditional Retail to D2C: How the Shopping Landscape is Changing Customer Engagement

New-age customers are impacting retail marketing strategies like never before. They are not just tech-savvy but are also highly discerning and demanding. They place the convenience of shopping at the top of the pecking order whether it is online or offline or a hybrid one. Then come quality, price, brand image, rewards, and other benefits and features, alternating with each other in the pecking order, totally depending upon the mood of the consumer at the point of purchase. 

Yes, indeed the world of retail is fast changing. To be top of the game, retail enterprises, be it a brick-and-mortar or a direct-to-consumer (D2C), have to be extremely agile in catering to the varied needs of the consumer. Consumers today strongly believe that the products they use reflect their personality – who they are, what they believe in, and what values they cherish. A retail enterprise armed with this data can accordingly tailor differential experiences and offerings to the consumer. There is no one-size-fits-all marketing here. The combination of offline and online is here to stay even as digital platforms, new technologies are bringing about a paradigm shift in retail enterprises.

Consistent Shopping Experience 

According to retail consulting firm BRP, 87 percent of customers want a personalized and consistent experience across all shopping channels – offline/ online or a combination of both (click-and-collect). Retail customers looking for personalized service, online/ offline/ hybrid experience, discounts, rewards, brand engagement, and more. As the new age consumer is hyper-connected, retail enterprises would do well to push relevant notifications to them in a channel-agnostic scenario.

Channel Agnostic

To reach out to the customer, the retail enterprise has to deploy all channels of communication as forecasting which service channel a customer would use at any given time via a mobile device is a difficult proposition. The retail enterprise has to have in place all channels – social media platforms, web, chatbots, email, SMS, IVR, and a live executive answering all the queries.  This is not an easy task, hence it is imperative for the retail enterprise to pick the right technology partner who understands what, whom, when, where, and how to connect with the consumer whose buying behavior is so dynamic.

Omni Experience

A consistent and complete view of its customers allows a retail enterprise to engage the customer with connected, hyper-personalized, and meaningful interactions, to take the customer experience to greater heights. The bottom-line is a convenient shopping experience for the customer, be it online or offline or a hybrid such as researching the products online then purchasing from a store or vice-versa. With the pandemic, customers prefer omni experience and convenience over everything, compelling brands to become omnipresent with the focus being online channels. With growing shopping avenues, the need to improve engagement across channels is a must.

Customer Engagement is the Key

With the right engagement, a brand can easily fulfill this need of being a convenient shopping store. All that a brand needs to do is add relevancy to its customer engagement and assist customers aptly during their shopping. The retail enterprise should:
a) Understand customer shopping journeys and create engagement campaigns based on the various journey stages; 
b) Utilize the right channel and touch-points when engaging customers; 
c) Focus on social influencer marketing to gain reach and brand awareness; 
d) Add relevancy to engagement by tweaking messaging and communication based on shopping journeys and historical data; and 
e) Provide timely information on various seasonal, annual, and festive sale periods; or any important discount periods.

Consumers Make or Mars Retail Enterprises

The consumer’s buying behavior makes or mars retail enterprises and understanding and addressing that consumer need is a challenge for all marketers. Right algorithms at the right time are showing the way for retail growth, fulfilling customer needs and aspirations. Successful retail enterprises are customer-centric, offering hyper-personalized solutions to their customers with digital technologies at play, customized content, customized product, enhanced quality, customer rewards, and a holistic customer experience. 

Interplay Between Channels

Avendus Capital in the report ‘Decade of D2C – Disrupting the Next Decade of Shopping’ talks about how there will be an interplay between its own platform, marketplaces, and omnichannel strategies. The D2C segment is likely to have a US$ 100 billion addressable market by 2025, projected to surpass the US$ 1.7 trillion retail markets by 2025. In the last three years alone, India has added 80 million online shoppers to reach 130 million. Online spending in India is expected to grow at a CAGR of 35 percent plus from US$ 39 billion in 2019 to US$ 200 billion over the next 5 years, supported by internet and payment infrastructure developments.  No doubt, digital technologies have been core to D2C but the most critical element is the ‘C’, that is the consumer, who is driving the digital transformation.

Pandemic Accelerates Shift Towards Digital

The pandemic has merely accelerated the shift towards a more digital world and triggered changes in online shopping behavior that is likely to have lasting effects. It has taken in its swathe the initiated and the uninitiated and the D2C segment has benefitted the most.

The United Nations Conference on Trade and Development (UNCTAD) reported that consumers in emerging economies made the greatest shift to online shopping as women and consumers with tertiary education increased their online purchases more than others during the pandemic. People aged 25 to 44 reported a stronger increase compared with younger ones, being early adopters, swearing by smartphones and the Internet of Things, while having purchasing power. 

It is not just enough for the retail enterprise to be omnipresent, it has to also monitor the changing buying behavior and have agile customer engagement strategies. A retail enterprise with a 360-degree customer engagement view can easily control its product movement through push or pull marketing strategies, achieving omnichannel equilibrium and the recipe for growth.