Salesforce data - connected shoppers have higher expectations for what they demand from retailers in the Vaccine Economy

Profile picture for user slauchlan By Stuart Lauchlan November 5, 2021 Audio mode
Summary:
COVID drove massive changes through the shopping experience, but what lies beyond in the Vaccine Economy? Salesforce's latest Connected Shoppers report offers some insights on the shape of things to come.

retail

While the long term impact of COVID on the retail sector has yet to be determined, it’s already apparent in the emerging Vaccine Economy that shoppers now expect things to be done on their terms more than ever before. With vastly more people exposed to e-commerce channels, the lines between physical and digital are ever more blurred and that’s left too many retailers playing catch-up with their customers needs.

Those are some of the top line findings to emerge from the 4th edition of Salesforce’s Connected Shoppers Report (registration required). Based on data and insights from 1,600 global shoppers and more than 1,000 retail executives, the report states:

The pandemic accelerated changes in the ways shoppers interact in the digital and physical worlds. Retailers and brands reacted quickly as shoppers embraced new channels and options. Now, retailers and brands are moving from scrappy to scale as they adapt to continued shifts and heightened shopper expectations.

The study finds that across the COVID crisis up to the present day, three key digital channels grew their transaction share by nearly 40% - brand websites and apps; retailers websites and apps; and online marketplaces. In 2019, during the ‘old normal’, physical stores were the main shopping outlets for shoppers (57% of respondents), with brand and retail websites/apps on 12% a piece.

The expectation among those polled for where they think they will shop in 2023 has physical stores down to 43%, with brand and retail digital channels on 17% and 16% respectively.

The store

That said, as diginomica has argued since as far back as 2017, the physical store still has an important part to play in the overall omni-channel retail experience. Shoppers like the real-world store experience for its ability to allow them to touch merchandise and take delivery of it immediately as well as the cash conscious consumer avoiding shipping fees and being able to score discounts in-store.

Above all, they enjoy the experience of shopping in a store. Online may be convenient in many cases and was certainly a lifesaver for essential purchases during the pandemic’s height, but a Saturday afternoon wander through the mall, window shopping, is still on the pleasurable to do list for most people.

Other channels have their own appeal, of course. Online marketplaces, such as Amazon, offer vast variety at your fingertips and multiple fulfilment options to match your own convenience, for example, while the new generation of delivery apps offers speed of delivery as their many selling point.

The report also taps into the phenomenon of shopping at the edge, described as being “where consumers start — and even complete — the shopping journey outside of a brand or retailer’s physical and digital space.” This is where social media’s creation, the ‘influencer’ thrives, with the much-sought after Gen Z shopper ready to look to social media (64%) and influencers (41%) to discover brands and retailers.  (Although it’s important not to forget that Gen Z also loves the stores…)

Meanwhile mobile wallers, email and social media enable buying at the edge, while self-service channels, such as instant messaging and chatbots, provide service at the edge.

The customer

All of this presents fresh challenges and opportunities for retailers and brands. To address them, the customer experience (CX) strategy has to come under close and truthful scrutiny as to its fitness for purpose in a connected shopping world.

As it stands, too many CX strategies are undermined by lack of alignment across channels - the average retail organization uses an estimated 44 different systems to manage CX - and an inability to be agile enough to turn complex consumer data into effective actions, with less than a third (32%) of polled retail execs confident that they can use such data to produce personalized prices, offers, and products in real time across channels.

What’s needed, argues The Connected Shoppers report, is a unified engagement platform that can increase agility, create a seamless customer experience across channels and devices, increase store associate productivity, make data-driven decisions and deliver personalization in real time.

Simple, huh? The bad news is that in practice, only 16% of retailers are at the stage of realizing the benefits of such an approach with the majority (55%) not even out of the planning stage.

Vaccine Economy keepers 

All of which brings us right back to the physical store and its new role as enabler of a unified experience by becoming an extension of the digital experience. The most notable example of this is probably BOPIS - Buy Online, Pick-Up In Store, which the majority of shoppers polled (57%) have done. This was a model already on the rise pre-pandemic - 48% of retailers offered such a service - but whose adoption by both buyers and sellers was accelerated by health-and-safety concerns during the crisis.

Those same health concerns also saw an increase in curbside pick-up services, whereby consumers didn’t even need to go into the store itself to collect purchases. Over a third of retailers introduced this facility during the worst of the COVID crisis. At the same time, more fulfilment options became increasingly important, as retailers partnered with third party delivery apps in greater numbers, with 36% of retailers engaging in this approach during the pandemic, adding to the 39% who were already active.

The genie is out of the bottle when it comes to fulfillment. As Salesforce’s GM of Retail Rob Garf told diginomica last week:

Most of the investments that retailers made in the course of the pandemic, whether it was on the logistics side or particularly in the store, they were doing these to make the shopping experience easier, more convenient, healthier. Those [investments] are sticky, they’re not going away.

Sure enough, retailers expectations of what they need to keep focused on post-pandemic - whenever that might be - is dominated by fulfilment flexibility. BOPIS leads on 73%, followed by ship-from-store (68%), online returns to store (68%), curbside pick-up (67%) and same day delivery from store (65%).

Meanwhile, for those consumers who enter the physical store, the shopping experience is due for a tech top-up and overhaul. Currently less than half (48%) of store associates are armed with a mobile device, for example. Retail execs polled want to see that changed to three quarters (74%) by 2024. Point of Sale (POS) systems are also long overdue for an upgrade, with 54% of execs saying they plan to replace existing tech with a cloud solution by 2024. These replacement POS platforms need to be connected to the company website and marketing data; mobile so that store associates can use them to engage with customers face-to-face; have a single view of relevant data about products, price, inventory levels etc; be easy to use for store associates; and be able to work in offline mode as well as online.

My take

As diginomica’s ongoing coverage of the retail sector’s omni-channel transformation has shown, the COVID crisis has acted as both a destructive sector disruptor and as an accelerant of operational change, much of it positive. It didn’t kill off the high street or the shopping mall - the process of decline was already well underway there - but it did force millions of shoppers online for the first time and, despite the awful circumstances driving that shift, lots of those people have found they enjoyed the digital experience.

Those people will come back to physical stores, but those stores need to be ready to change their ways. I said earlier in the year that my first forage back into the physical retail world once lockdown had lifted was a short-lived romance that began with a heady sense of excitement and rapidly declined into irritation at the poor CX and finally to sitting in a cafe completing my shopping on my phone. I won’t be the only one. As I said back in April, let’s get physical by all means, but retailers need to make sure that they’re in shape!