The rise of retail innovations from live stream shopping to augmented reality, while exciting, requires retailers to rethink their in-store and digital shopping experiences amid evolving trends. Petco’s Chief Digital and Innovation Officer Darren MacDonald, The North Face’s Global VP of Digital Experience Sarah Kleinman and Klarna CEO Sebastian Siemiatkowski came together to discuss directions and solutions during the “The Retail Revolution: How Social Commerce and New Technologies Are Transforming the Way We Shop” panel at Fast Company’s 2021 Innovation Festival.
Here are 6 key takeaways from the session.
Shopping habits have changed over the pandemic.
Shoppers are using credit cards less, with a 50% drop in overall spending volume over the past 2 years. As Siemiatkowski pointed out, many people received government stimulus money and opted to use it to pay down personal debt—and they don’t want to go back. That’s led to fewer instances of people paying with credit and is why debit cards, and flexible payment options like Klarna, have seen massive increases over the past 18 months.
Customers like the new experiences and don’t want to go back.
The North Face’s Sarah Kleinman noted one of the most surprising factors was the speed at which people were willing to adapt to and adopt new shopping models. When buying online and picking up in-store was offered to shoppers before the pandemic, few shoppers took advantage of it. Now a store without it is missing out on sales.
Customers have come to expect “omnichannel interaction models,” Kleinman said, and it’s led to “an incredible acceleration both in the experience we can generate, and the fulfillment models.”
Digital in the driver’s seat.
When large retailers look ahead to the future, they see a likely split of 50-50 between digital and offline sales, Siemiatkowski said. Digital’s sales gains ensure more digital teams will be where decisions happen—and those choices will reverberate through their organizations.
Additionally, as e-commerce teams drive more success at their companies, their leaders will also rise to higher levels within their organizations. Evolving leadership teams will further shift company priorities as more decision-makers have online backgrounds and focus on digital-first.
The utility of technology.
New technology can open up new sales channels and bring customers closer to your products. And, “just because other retailers are doing it, doesn’t mean it’s right for you,” Petco’s Darren MacDonald noted.
Just because something is new—or a competitor used it—doesn’t mean a company has to roll it out for itself. “Streaming, augmented reality, whatever it is, for just technology’s sake, is not adding value for your consumers,” Kleinman said. “We have truly found identifying that utility and benefit is the critical key.”
When introducing new technology to your shoppers, you’re doing your business a disservice if you don’t have direct use-cases in mind. And if those use-cases aren’t significantly additive to your customers, often you’re introducing a quickly ignored expensive tool, damaging your relationship.
Expertise drives connection.
As people returned to stores, a significant trend MacDonald and Kleinman identified was the need and desire from shoppers to have conversations with the store associates. People want the experience and expert advice that associates have—whether it’s correct ways to train a puppy or properly setting up a new tent.)
Facilitating those conversations in authentic, genuine ways online is a massive challenge for retailers and an even more enormous opportunity. Recent Klarna acquisition Hero shows retailers can provide stellar customer service to shoppers everywhere, bringing expert advice and assistance and improving their overall brand experience.
Membership rewards.
Another major trend is the significance of membership and loyalty programs for brands moving forward. Membership programs enable brands to provide customized experiences for individual shoppers and draw people into a larger community.
For The North Face, by giving their members more opportunities to try new products—while having the comfort and convenience of easy no-question returns—they empowered customers to be more daring versions of themselves and push their outdoor activities further. And by giving flexibility, they’ve seen far fewer returns.
Petco’s recent PupBox subscription service brings convenient home delivery of toys and food. Petco stands out further by using its data and pet expertise to anticipate what pets will need next. Each box then becomes a solutions center for owners, and those shoppers remember—and value—that level of attention and service.