Trends and Technology Impacting Consumer Shopping Habits

January 31, 2018 Catherine Malone

Consumer expectations are constantly evolving and transforming due to the continuous wave of new technologies and platforms entering the market. It’s certainly an exciting time for marketers to explore new ways to connect and engage with existing and future customers. Let’s take a look at the trends and technologies that will provide the maximum opportunity for marketers to sell to consumers, impact business, and drive retention in 2018.

Retailers are Investing in the In-store Experience

In the face of such fierce competition from online-only retailers, many retailers with physical locations are exploring ways to invest in their competitive advantage: brick and mortar stores. Retailers are finding value in improving the in-store experience and incentivizing people for coming through the door.  Steve Madden made an investment in loyalty in 2017 in an effort to drive greater foot traffic to their stores. Their newly launched SM PASS loyalty program features storewide points promotions, and personalized geotargeted bonus campaigns designed to incentivize customers into the store, drive a better in-store experience and encourage customers to make a purchase.

Despite the boom and continued growth of ecommerce stores, previously online-only brands are also investing in brick-and-mortar stores. Boll & Branch, Allbirds, Away, ModCloth, Glossier and Madison Reed, for instance, have all opened their own physical stores in the past year. This has become an almost necessary investment considering 84 percent of Americans prefer to shop at brick-and-mortar stores or at a combination of online and in-store retailers. Many these brands are also finding ways to provide greater value and better in-store experiences. For example, at ModCloth’s Austin store, shoppers can have their measurements taken which they can then enter into ModCloth’s “Fit For Me” app to receive personalized clothing recommendations. Improving the in-store experience will be a huge priority for marketers this year as bridging online and offline shopping experiences becomes crucial in providing a seamless shopping experience.

Consumers are More Likely to Purchase from Responsible Brands

Millennials are driving the change for brands to become socially and environmentally responsible, so much so that it’s a major influence in their purchase decisions. The Shelton Group, a marketing company specializing in sustainability, found 90% of millennials will buy from a brand whose social and environmental practices they trust, and are thus more likely to recommend their purchase to friends. Therefore, demonstrating social and environmental responsibility can have a major impact on sales and customer loyalty. And it’s not just millennials who are influenced – the research also finds that half of Americans remember a time when they’ve purchased or not purchased a product because of the environmental reputation of the manufacturer.

Brands such as TOMs have pioneered the trend by offering members of TOMS Passport Rewards the option to redeem points on a donation to a charitable cause or initiative. More and more, brands are demonstrating their commitment to social and environmental responsibility in their loyalty initiatives. For example, Best Western Hotels & Resorts’ hoteliers just announced that have committed approximately $1 million towards charitable donations over the next five years. Their loyalty program Best Western Rewards® supported disaster relief efforts in 2017 through the donation of BWR points, contributing $250,000 to the American Red Cross to bolster relief efforts associated with Hurricanes Harvey, Irma and Maria. Brands that take a responsible stance and make it easy for customers to support causes that are important to them are going to be more attractive to the growing socially conscious population of consumers.

Social Commerce Will Drive More Sales

PwC conducted a global survey of nearly 23,000 people and found that 78% of consumers are influenced by social media when shopping online. Social commerce is a powerful tool brand marketers should be tapping into in 2018.  Facebook, Pinterest, and Snapchat are making it easier for brands to not only advertise on their platforms, but sell directly to the consumer.

Facebook allows brands to build stores on their site from which customers can browse products and make purchases. Brands are able to advertise and promote products and get insights on those promotions. The entire commerce experience can be fulfilled from advertising, to order processing to managing the customer experience.

On Pinterest, brands can attach buyable pins to product images so when shoppers select “Buy It” they can make an instant purchase with Apple Pay or a credit card.

Brands can advertise on Snapchat and direct consumers to swipe up on the screen to learn more and make a purchase. Brands with verified accounts on Instagram can post videos and photos to the app’s Stories feature that prompt users to do the same. This is called deep linking.

Michael Kors launched an #InstaKors hashtag campaign on Instagram to create a more seamless shopping experience for its 8.2 million followers, according to Luxury Daily. Similar to MVMT, followers can click on hyperlinks contained within the images of products for sale which directs them to the Michael Kors store. The #InstaKors website mirrors the Instagram feed and allow online shoppers to click and purchase products depicted in its Instagram pictures. The #InstaKors feature was launched with a view to turn into a social loyalty program. The program is designed to offer Instagram followers unique deals on products, as well as the opportunity to purchase exclusive merchandise before they are made available in retail stores.

Emerging Technology Is the Future of Customer Service

Emerging technology such as machine-learning applications, chatbots, and mobile messaging will play a bigger role in customer service this year. We’re starting to see the rise of chatbots, virtual digital assistants, and artificial intelligence (AI) agents employed to answer basic queries, solve common customer problems faster and even take orders.

Chatbot technology made waves in 2017, with plenty of companies becoming early adopters of the technology. By 2020 chatbots are expected to become the norm. According to a survey by Oracle of  800 decision makers including chief marketing officers, chief strategy officers, senior marketers, and senior sales executives, 80% of respondents said they already used or are planning to use chatbots by 2020. Brands such as Marriot, la Quinta, and Columbia Sportswear are integrating chatbot capabilities into their loyalty programs to more relevantly respond to customers, drive higher engagement, increase rates of conversion, spend per visit and frequency of spend.

Voice activation technology presents a huge opportunity for brands, especially in the CPG industry. Experts forecast that voice activated assistants will help drive the ordering of everyday purchases such as milk and toilet paper because most consumers know their brand preferences and their cost points. Using loyalty program data and predictive personalization technology, brands and retailers can leverage voice assistants to make product recommendations to consumers and alert them of special promotions or remind them to make repurchases.

Conclusion

Retailers in 2018 need to provide seamless offline and online shopping experiences. They should maximize investments in the technology and trends that make it easy for consumers to make a purchase. Consumers also expect brands to represent the values and support the causes that are meaningful to them.  Retailers need to find new ways to engage and communicate with their customers, loyalty programs continue to add value in this competitive space.

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