Digital technology has transformed consumers’ retail expectations but not most Canadian retailers, and that’s a problem, according to “Personalizing the Retail Experience,” PwC’s 2016 Total Retail Report.
“For Canadian retailers to remain relevant in the eyes of their customers, they must evolve now,” the report says. “Any delay could set retailers back far enough that they may have difficulty catching up.”
PwC says consumers—especially millennial consumers—expect technology and multichannel touchpoints including online, social and mobile, to provide a much more personalized, seamless omnichannel experience. While most retail brands in Canada aren’t delivering, there are signs of improvement. “I think it is a work in progress ¦ they all have something on the go,” says Ted Salter, partner, retail and consumer with PwC in Toronto. “What we say now is you no longer need a digital strategy for your organization, what you need is a strategy for the digital world.”
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PwC says consumers are leaving multiple digital markers along their path to purchase: 42% of consumers shop online every month, their smartphone is tightly connected to their instore shopping experience and social media reviews and feedback are increasingly important factors in what consumers buy. But, many Canadian retailers remain unable to connect those digital markers, hampered by siloed business channels, the inability to collect and use customer data and dated legacy technologies.
As technology improved and new channels emerged, retailers developed standalone strategies without first considering how it could be used to improve engagement with their consumers and positively shape the larger shopping experience, says Salter. That approach had a number of failings.
“In the study we talk about the virtuous cycle of how do I better engage with our customers,” he says. That comes from building more personal relationships through true, two-way dialogue, which just hasn’t happened. The problem was that each of those channel strategies was disconnected from the others. The result is disjointed consumer experiences as they jump back and forth between channels.
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Similarly, while everyone has been talking about the promise of big data delivering personalized customer offers, when retailers have multiple systems generating and managing data—from point of sale, to loyalty program, to inventory, supply chain and so on—running independently that promise of personal offers is never realized.
The problem is real-time analytics is still very difficult, says Salter. “It is not hard to identify you are in the store, the challenging part is to get all those legacy systems talking together to get a relevant real offer,” he says. “That next level of real-time location-based marketing is the next opportunity.”
Social media continues to grow as a powerful influence in consumer decision-making, and consumers are wiling to engage with brands in social channels, but retailers may not enjoy the benefits if they lack “a method to analyze and distill their customer interaction into actionable information and personalized offerings,” says PwC.
Almost 40% of Canadian consumers say reviews and feedback on social has an influence on shopping behaviour. That number jumps up to 55% for consumers 18-24. Eight-four percent of consumers 1824 say online shopping behaviours are influenced by social media. And 40% of consumers under 34 say interactions with their favourite brands in social have caused them to “respect and value those brands more.”
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Do you agree that retailers aren’t meeting consumers’ technology-driven expectations? What challenges are preventing companies from offering greater personalization? Let us know by commenting below.