In 1950 there were 600,000 retail stores in the UK, in 2012 there were 290,000, and just 220,000 are predicted to survive in 2020. Physical stores are not what necessarily attracts shoppers to make a purchase in the mobile era and pureplay retailers are looking to take advantage of the shifting structure in retail.
It has never been easier to shop online, penetration of smartphones in the UK is now over 80% and with more and more retailers making it straightforward to purchase and free shipping becoming the norm, there are less barriers than ever before.
Online sales across the entire retail sector, excluding food, have been outpacing in-store growth for some time now and John Lewis recently announced that it expects online sales to account for half of its revenue by 2020. This growth is contributing to a rise in the number of companies with an online only presence as opposed to a traditional bricks and mortar structure.
Pureplay retailers need to differentiate their shopping experience. Their lack of physical presence can be an advantage if they use data more effectively to separate them from the competition and in order to surpass customer expectations, transforming shoppers into loyal customers. Creating brand advocates helps expand their audience and therefore increase sales.
What can pureplay retailers do to retain and impress their customers shopping online?
Improve delivery services
In the era of Amazon Prime Now, consumers expect a wide choice of shipping times and destinations that fit within their busy lives. We started ecommerce shopping with five to seven-day delivery, then we moved to next day delivery, and now we are witnessing not only same day delivery but the promise of delivery within hours of orders being placed. Currently, many retailers fail to offer flexible and alternative delivery options such as click and collect, which increases choice and convenience for consumers.
Harness the power of customer data
By examining customer data companies can create successful customer loyalty retention programmes and personalise consumer interactions in meaningful ways. Customer analytics enable companies to analyse that data, gain buying pattern insights, and deliver valuable, personalised customer messages. Big data analysis offers a way to identify the shoppers who are the most valuable as returning customers. Such information can also help ecommerce to target customer communications, marketing campaigns and special offers. The premise is that to stay competitive, companies need to understand not only their customers’ wants and needs, but also predict their future tendencies.
In order to develop trust online, brands must be able to engage with their customers. Much like shopping online, consumers expect the same quality of interaction whether they email, call, or engage via social media. Engagement builds trust, fosters loyalty and increases the number of customers. When a customer buys online and is satisfied, chances are that they will let others know. It’s therefore essential that retailers engage with their customers to understand them and improve their offering to them.
In such a competitive market, retailers that do not innovate are at risk of being left behind. For pureplay retailers making the customer experience engaging, seamless and personal is vital to making sure customers become loyal. With no physical stores to impress customers with, pureplay retailers need to use all the weapons in their armoury to differentiate themselves, excite customers and thereby increase the chances they will become loyal and therefore more profitable.