Understanding the new breed of consumers and what they expect in today's age of technology and exploding internet penetration, Indian customers are rapidly moving towards continuous connectivity across every facet of their lives. Indian retailers need to define their digital strategy to cater to the needs of the connected customer. Understanding the new breed of customers will prove key.
Know The Connected Customers
'Connected customers' are those that connect to the internet at least once a week seeking interpersonal connection, self expression, exploration and convenience. This new age 'connected customer' is increasingly techsavvy and is more open to trying out new experiences enabled by unfettered digital access. This digital transformation is resulting in a profound shift in the way customers interact with retailers during their purchase decision process. Indian retailers must consciously take note of these changes and prepare their businesses effectively to win customers in this connected retail environment.
Connected customers have access to more information, are more discerning and seamlessly switch between retail formats. Although their purchase decisions are increasingly dispersed across channels, customers seek consistency in the brand across all their interactions (digital/physical). More than 70% customers expect complete alignment in pricing across all channels, more than 60% rate pricing consistency an important factor in their decision making and an equal percentage of customers expect similar promotions across all channels.
Therefore, it is important to have an authentic value proposition communicated consistently across channels - digital and physical. This will help connect better with customers. "It is of utmost importance for the customers to have clarity on brand communications. I personally feel, maintaining consistency in reinforcing the value proposition and actually delivering it increases the credibility score of the brand," said Manish Mandhana, Joint MD, Mandhana Industries. "Consistency is very important across brands - we can no longer have model stores. All stores are now critical to the retailer. The customer does not differentiate," said Vasanth Kumar, Executive Director, Lifestyle International - Max Retail.
Focus on Me-Tailing
Connected customers with short attention spans and dispersed media consumption expect tailored and relevant communication. Retailers will need to transition from one-size-fits-all to personalized and interactive marketing with higher use of digital media. The following shifts in marketing have been observed…
- Media consumption shifts from massmedia (TV, Radio, newspapers) to customized media (news feeds, social media, video streaming sites)
- Force multiplier effect in the digital world for viral marketing campaigns
- Increasing ask for immediate fulfillment from connected customers
- Advancements in customer data analytics make personalized marketing relevant (and possible)
Personalization of marketing campaigns benefit retailers immensely. Marketers see an average increase of 20% in sales when using personalized marketing campaigns. 90% of customers find custom content useful. For instance, 35% of Amazon's revenues generated are by its user specific recommendation engine. Customizing promotions to micro segments enrich customer acquisition and retention.
Customised Products and Promotins
Retailers can benefit from customizing product portfolio and promotions based on customer needs and shopping history. This is important as connected customers have higher expectations of personalization driven by increased exposure to e-commerce. It's possible as they leave more traces of their shopping behavior (digital data trail) than ever before. Retailers can improve relevance of assortment and promotions through :
- Customized assortment based on catchment profile (socio-economic, demographic and ethnographic profile)
- Iterative assortment selection based on previews for loyalty customers
- Use of IOT and mobile phones to passively activate customized promotions
- POS discounts based on shopping history
Technology is a key enabler for customization and personalization across all areas of retail. Retailers can leverage technology to improve authenticity and consistency of their value proposition. For instance, transparent assortment, pricing, promotion comparison with e-retailers, social Media observatories to tap into real-time customer perceptions and advanced retail IT systems to seamlessly connect different channels. Digital tools like targeted Google Ads, interactive end - cap displays, QR - product - coding, and virtual retail walls can be used to enable personalization and more interaction with customers.
Global retailers have invested in self - checkouts, digital displays, shopping cart interactive maps, mobile app synchronization with in-store shopping and special service lounges to improve shopping experience. Indian retailers can adopt simple, interchangeable and modular technologies while avoiding niche, elaborate and unproven technologies. Satisfying Connected Consumers is all about understanding who they are, what they expect and then delivering it.
- Burberry's flagship store in London offers 'me-tailing' - highly personalized interactions by pushing product promotions and discounts on customers' mobile devices and digital screens based on their in - store location
- can place orders online for bespoke garments and perfumes. Each bespoke garment piece triggers RFID - enabled 'smart mirrors' placed in the flagship store that describe the journey behind the making of that piece
- Tesco maps data from its loyalty card program 'Tesco Clubcard' to analyse and segment customer behavior
- Tesco's website recommends product offerings offerings based on customers’ Clubcard data, shopping history, and their wealth
- Clubcard data is also used to push product suggestions and customised offers to customers' mobile phones (via the store’s free Wi-Fi) when they're shopping in-store
- Loyalty customers can also use Tesco's mobile app-which prompts users about the in - store location of products on their shopping lists - when shopping in - store