The evolution of the retail business model
It is universally known that Amazon is obsessed with making shopping a seamless experience. For this reason, the company that started off pioneering eBooks, continues to contribute to the evolution of the traditional retail industry as a whole. Over the years, retail segments have followed Amazon’s lead and transformed their various e-commerce business models in order to influence consumer behavior and reshape expectations. Notable examples include shoe seller Zappos, who rewrote their premium e-commerce offering with a more generous and customer friendly shipping and return policy to aggressively compete against the growing demand and expectations of online shoppers and win back share of market from their competitors. The first e-commerce eye wear brand, Warby Parker, proved that even the most deeply entrenched brick and mortar businesses can be open to digital disruption. And digital-only brands like Harry’s and Dollar Shave Club turned high-margin CPG shaving products into beloved digital subscription based services.
Amazon and brick-and-mortar
Amazon’s decision to establish its first brick-and-mortar book store in 2015 is a testament that the former rhetoric of offline versus online channels is outdated and that brands need to focus on a holistic customer journey versus separating them by channel. The common denominator between these examples is clear: brand and customer entanglement. Both retailers and brands are working to further entangle with their customers by meeting individual needs regardless of the time, place or touchpoint.
Entangled Marketing is a new business model for building a supportive, enduring and mutually-rewarding relationship between brand and customer. The key to successful entanglement lies in having access to a deep understanding of customers and leveraging data-driven insights across touchpoints. Retailers should focus their digital marketing strategy on ensuring shoppers convert across the continuum of touch points as a holistic journey rather than only by channel. An IDC study indicates that these customers are the most valuable, with a 30% higher lifetime value in comparison to shoppers using channels in silo.Brands have missed the point when dividing their focus according to channel, rather than providing a fundamental need to their customers and prospects: creating a seamless cross-channel shopping experience.
This strategy, coined as ‘omni-channel retailing’ is the reason why there has been a continuous surge in traditional retailers seeking to establish an online presence and likewise, why e-tailers are looking to create a physical presence to complement their online channels.
The challenge for both groups of retailers is that they are used to operating in silos and instead, should be creating a seamless customer experience.
Creating seamless shopping experiences
Several retailers have created successful multi-channel experiences with built in social community, highly engaging mobile marketing campaigns, and intentionally well-designed, intuitive, easily navigable websites. However, having a truly entangling infrastructure entails these experiences synchronizing and complimenting each other. Some example capabilities that are increasingly ubiquitous include, retailers such as Best Buy providing customers with the ability to purchase products online and pick-up in store. Customers are now given a multitude of options as brands create more convenient ways to enhance their customers’ shopping preferences and in doing so, creating relevance and value that their customers share.
Similar to Warby Parker, men’s fashion retailer ‘Bonobos’ have hybridized the online and offline shopping experience for customers. The brand is focused on the customer first rather than product or distribution. Like Zappos and several other e-tailers, Bonobos offer free shipping and returns, however what really makes them stand out is their Guideshop.
Customers are provided ‘one with one’ attention, as the store provides them with a personal shopper that helps them find the perfect fit, and these guides also place the order on a laptop or mobile device to be delivered to the customer. Another example would be, eBay and Rebbecca Minkoff who opened a digitally connected store that innovatively merged online and physical shopping with its instore digital changing rooms and interactive mirrors. Across the U.S., Sephora is providing their shoppers with more personalized offerings with the use of iBeacon technology. These are just a few examples of ongoing retail transformation and disruption within the industry.
Entangling and retail
The modern-day shopper seeks information throughout their shopping experience and they are more informed than ever before. A 2015 InReality report indicates that 75% of in-store customers turn to their mobile devices to help fill in information gaps. This may be for information such as if a product is out of stock, or if a competing retai
Author: sebastian jespersen