Modern Retail

2020: The Year That Will Kick off a Thriving Decade in Retail

Successful decade in retail

It has been one of the most tumultuous decades in the history of retail as the industry is dusting itself off and searching for strategies that will provide a more prosperous future. Why, where, when and how customers choose to shop will continue to change and the demands of consumers are radically different to those hitting the high street a decade ago. In 2020, experience, ease and quality will continue to rocket their way to the top of shoppers’ wish lists.

Retail performance over Black Friday and Cyber Monday will have boosted the bottom line for retailers, a momentum that they will be looking to continue in the New Year. Taking this, and a flat economic outlook (the UK economy is predicted to grow just 1% next year), spending is unlikely to dramatically increase, so retailers will be looking to take share from competitors as a route to growth.

The predictions for 2020 and the next decade haven’t been too positive. Global trade tensions and the growing dominance of Amazon and other ecommerce giants have driven changes that retailers are struggling to keep up with. New strategies, technologies and levels of service must be adopted if retailers are to survive and thrive.

All is not lost, however. To stay competitive, retailers need to understand the underlying currents of this shift towards ecommerce, to subsequently understand the changing needs and demands of the customer. Ecommerce is often seen as the ‘problem’ but understanding the reasons why customers will continue to choose to shop online, and how the high street can still play an important role in the shopping experience, is key.

Brick and mortar stores will become an extension of online retailers’ offerings

Where the high street was once a destination for people to spend the day browsing and window shopping, the growing ubiquity of online shopping and multi-channel purchasing experiences has become the norm. October’s ONS statistics once again showed an increase in online shopping, a trend that is continuing to redefine the retail landscape.

In 2020, brick-and-mortar stores will still be an essential part of customers’ buying journey. If executed correctly, integrating online buying experiences with the physical elements of retail can be a winning strategy for high street brands.

The government has tried to help, providing some financial support in the form of a £1bn Future High Streets Fund – but it still faces criticism on rising business rates. Some of the damage, however, has been self-inflicted by retailers who have not transformed digitally. It is no longer enough for brands to have the largest store on the most prominent high street – they now need to bring their brands to the doorstep of every customer, engaging with them at every touchpoint to provide the seamless and quick customer service they desire. 

In 2019, eBay and Amazon saw value in bringing their online presence to the high street, when they opened two pop-up stores in the UK. This is unlikely to signal a move away from their online dominance but does showcase that the online giants understand the value of physical human interaction. In a world where visual experiences are shared online, pop-up stores may provide retailers with some positive social media coverage. After all, consumers are unlikely to share an online experience on social media, unless it is to complain, but an exciting pop-up experience is a great way to get consumers talking about a brand.

Understanding who the online customer is, and why

Surviving in a competitive ecommerce environment requires an understanding of what drives the behaviour of the multi-channel customer and what their expectations are. 

In 2020, to create a robust and personalised customer experience (CX) that consumers expect, brands must take advantage of the plethora of customer interaction data available to them to understand the evolving demands of the customer. Digital help doesn’t have to cost the earth. Even retailers with smaller budgets can take advantage of the information that comes from customer interactions. 

Studying customer behaviour across digital channels is a cost-effective means to conduct valuable market research and behaviour studies – retailers can analyse page analytics, the types of content that followers respond to, conduct polls on customer likes and dislikes, and keep an eye on their competitors. This data can then be used to adapt the offline experience to meet the needs of the customer.

Automation and AI will continue to streamline CX

Technology continues to evolve alongside customer shopping habits and expectations. We’ve seen this in the rise of chatbots, artificial intelligence and messaging apps. In fact, our own research has highlighted that in order to succeed, organisations have to offer a choice of channels to meet their increasing demands and needs (81% of customers want a variety of channels), as well as delivering a seamless, integrated experience across all of them.

Fears over automation replacing CX jobs are misplaced, and in 2020, the technology will mainly be used to take over mundane tasks, creating a better human to human experience as CX workers will be able to focus more time on important enquiries and complaints. Elsewhere, AI and automation will be able to reduce contact centre chaos at peak shopping seasons and ensure channels are open for priority CX issues.

In 2020, AI will also be used by retailers to better visualise the customer journey. Retailers will need to have access to a unified customer data platform that can provide them with data-driven insights to help understand each customer’s journey across channels. Then, organisations can leverage a predictive analytical model to become proactive in customer engagement strategies such as: predicting the next step in the customer journey, understanding purchasing behaviour as well as having a clearer understanding of the offers that customers are more likely to be interested in 

By adopting some of these techniques in 2020, retailers can start to fight back and have a far more successful decade. As competition for market share increases, the answer lies in listening closely to what the customer has to say, and then enabling seamless and personalised customer journeys to meet their needs.

Credit: Simon Brennan, VP Europe, Engage Hub.