Transformation in regional retail channels
The retail landscape has since been diversified from the time of souks to online stores. At its core, retail is always defined by customer relationship and experience. Through the years, this foundation has not changed. What constantly changed are the ways by which retail established a customer relationship. In 2017, technological advances will propel small and medium enterprises and huge firms.
This year, we shall witness the retail market dominating with omnichannel presence, growing e-commerce and business distinction through big data use. As per the Dubai Chamber of Commerce and Industry, retail is expected to grow by 5% to AED 200 billion in 2017.
The UAE has gradually established its position as a shopper’s paradise with souks and malls serving as avenues for SMEs to grab a considerable portion of the consumer market. As years passed, E-commerce has penetrated the retail sector with brick-and-mortar stores acquiring presence online that boosted their sales. Social media also played an important role in shaping things up with surprising impacts on the visibility of those who know how to manage and use the internet.
Moreover, 2016 saw the rise of mobile shopping where consumers are able to share their information that can be utilised for marketing strategies.
The retail evolution has landed in 2017 with retail insights being hailed as the king. This led to the use of channels integrated to make consumer data generation possible. Through retail insights, behavioral patterns are detected and use as a basis for corporate and marketing decisions.
Customers will not only talk about the product itself; instead, they will share the experiences they had when buying the product – the kind of staffing businesses have, the design of the store, the delivery service, the payment scheme and all other things entailed with purchasing and shopping.
Experiential retail is all about memorable experiences which consumers set as a reason to come back and buy again. In general, retail is now all about how effective businesses are in connecting the customer to the brand’s emotional interaction.
Shopping is shaped by social media
Social media has discreetly dictated how shopping should be. The information from Facebook, Instagram, LinkedIn, Twitter and other sites have influenced bow consumers should think and choose. Per studies, 70% of buyers are searching online for tips and reviews before making a purchase while average consumers utilise about ten sources of information to take a final decision on what to buy.
Retailers can further embrace the advantage of social media platforms in considering, discovering and understanding their customers. Relevant social media content allows big advantages to retailers who can provide useful information to consumers online. As per Advertising Age, social media spend grew 55% to $10.9 billion, up from the previous year’s $7 billion.
Consumer experience is profoundly redefined by the presence of millennials who are exhibiting enormous spending power as compared to other generations. This generation is highly motivated and influenced by the information generated online making them firm decision-makers when it comes to shopping and buying. 50% of millennials use mobile devices to research products and reviews while only 21% of non-millennials do the same.
Millennials are extremely inspired by research and they trust brands more than they trust their friend’s advice. They do not believe overt and exaggerated marketing tools as their personalised shopping preferences highly depend on facts and real-life experiences shared by others. They are more brand loyal than their parents. 78% of millennials are more likely to select a brand with a loyalty and reward programme than a brand without one.
Social, local, mobile
There is a significant rise in the use of social media and mobile has given birth to SoLoMo, which is a mobile-centric approach that aims to provide a higher level of precision to local search results. The increasing popularity of smartphones and tablets, combined with the fact that mobile users spend the bulk of their time on social networks, has brought about this opportunity for local retailers to attract in-store traffic.
The omnichannel strategy is the biggest trend in 2017 with retailers fully realising that multiple channels will not be enough to offer customers a seamless shopping experience. The idea of smooth integration and management leads to commerce ubiquitously accessible.
An omnichannel strategy entails the tight integration of all channels to create a unified experience and understanding that online shopping happens in stores as much as it happens in homes. It means adding items to a shopping cart online and seeing them when you resume shopping via your iPhone. It means consistent pricing and promotions across all channels. It means receiving offers automatically on your phone when you walk into a store and then scanning a product’s QR code to read all the ratings and reviews on the retail site, then performing a one-click purchase right in the aisle and having the product shipped to your home the next day.
Vic Bageria at Sàvant Data System explains the influence of social channels, the millennium consumer and the need for an omnichannel approach.