The digital movement is no doubt revolutionizing the retail landscape as it has given rise to e-commerce, complexities to the path to purchase, shifts between planned and unplanned purchases, and changes to store trips. To remain competitive, retailers must develop new strategies and grasp the importance of an “omni-perspective.” That is a key message of GMDC’s recent whitepaper “Evolution or Revolution: The Impact of Digital on Shopping and Stores.”
“More and more, digital is looked at as a platform to drive business benefits. Although the future in digital is becoming clearer, there is still much room for growth and experimentation,” the whitepaper stated.
It is predicted that U.S. online sales of consumer packaged goods will reach $32 billion in 2015, a compound annual growth rate of 25%. E-commerce is the fastest-growing channel within the consumer space and, for that reason, the online market in CPG is moving from early adopter to early majority, according to the research. Three macro-trends are shaping today’s modern shoppers — consumer trends, retail evolution and technology.
Consumer trends have been altered by social changes such as immigration, growth in baby boomers, urbanization and shrinking family sizes. Retailers are evolving their big-box stores into smaller store formats; grocers are selling more non-food products. And improvements in technology, such as smartphones, have given rise to new shopping behaviors and activities.
Highlighting several companies that have incorporated digital shopping, the whitepaper includes Walmart, which is looking to reach the digital shopper with same-day delivery; InstaCart, which is a personal shopping delivery service offering consumers same-day delivery in as little as one hour; and Target, which is integrating the digital shopping experience across multiple channels with an “omnichannel strategy.”
Understanding digital tactics
According to researchers, digital tactics influence two shopping outcomes — where people buy and how people shop.
Where people buy depends on the presence of digital barriers, which occurs when a consumer believes he or she must physically be at the store to make a purchase, and a digital enabler, which is a product that is more conveniently purchased online.
“Understanding how digital barriers and enablers affect e-commerce is essential to growing online sales,” the whitepaper stated.
How people shop is a function of the digital shopper’s path to purchase and three digital shopping tenants. The path to purchase is the decision-making process that shoppers go through when making a purchase. The three digital shopping tenants ultimately enable the success of digital shopping, and include:
- Know the shopper (who). Are they “online reluctants” (36%) who spend little time online and are concerned with online security? Are they “grab-and-go non-planners” (27%) who are disinterested in shopping and make trips only as they are needed? Or are they “online advocates” (37%) who are tech savvy and on the leading edge of online shopping?
- Understand the category and occasion (what). The same shopper will likely have different shopping tendencies depending on the product they are shopping for.
- Use the right touchpoints (how). It is essential to know which touchpoints (website, email, blog, etc.) the digital shopper is most attracted to when it comes to your product.
When looking to establish relationships between their brands and customers, there are essentially four types of marketing objectives: engage prospects, acquire customers, inspire usage and foster loyalty.
Some examples include the “Ford Fiesta Movement,” which was used as a social platform to engage millennial shoppers. Procter & Gamble’s Old Spice campaign worked to bring in new customers with humorous content that was spread via social media and mainstream advertising. The Dove Evolution Campaign was designed to inspire usage as Unilever had a number of people use its Dove products over a period of time and documented the change in their skin’s appearance. And Microsoft created and engaged a loyal base of consumers using the tactic of Digital Social Care, which addresses customer issues, complaints and questions over social media.
“A marketer’s objective will depend on whether the brand is in launch, growth or maturity mode. … A marketer’s goal depends on the maturity level of the brand, and the brand maturity will ultimately determine the marketer’s digital influence strategy,” researchers noted.