As retailers pursue cutting-edge tools and technologies to improve customer engagement and boost purchases, analysts are focused on how social media and mobile payment help meet those goals. Best-in-class retailers have implemented successful mPOS and rolled out Facebook storefronts, but these areas will be top struggles for many merchants, according to predictions from Gartner. In fact, Gartner predicts that through 2015, 80% of multichannel implementations will fail.
In the report titled “Predicts 2012: Retailers Turn to Personalized Offers Through Mobile and Social but Will Struggle With Multichannel Execution,” analysts in Gartner’s Retail Industry Advisory Services share detailed insight on top retail trends. John Davison, Managing VP and Research Director, Retail, and Mim Burt, Research Director, indicate that multichannel efforts will fail due to gaping silos and channel-centric strategies. As shoppers continue to implement cross-channel browsing and buying behaviors, decreased loyalty will be an amplified risk.
“Customers will have greater visibility of retailers' offers — for example, product, pricing and promotions — across their channels,” the report explained. “As the channels converge and overlap, inconsistencies will be magnified. As a result, any channel-specific policies will come under greater scrutiny. Many retailers recognize this and employ work-arounds as mitigation against the risk of customer dissatisfaction, such as using price-matching policies when customers become aware of inconsistent pricing across channels.”
Davison and Burt recommend that retailers conduct in-depth customer research to better understand how their target consumer base shops in and across channels. In turn, retailers will be able to identify key areas of investment.
In the report, Gartner analysts also revealed that despite the buzz surrounding NFC-based mobile payments, through 2013, only one of the world’s top 10 largest retailers will implement NFC-based contactless payments in-store. Security of account information also will remain a primary concern for consumers considering mobile payment. By 2015, less than 5% of consumers worldwide will adopt NFC-based mobile payments, according to the report.
Analysts Question The Future Of Facebook Commerce As Localization Comes To the Forefront
Another trend lagging in implementation is Facebook Commerce. While retailers such as JCPenney and Nine West successfully have rolled out a storefront on their brand accounts, by 2014, less than 25% of Tier 1 retailers will integrate browsing and buying capabilities on the site, according to Gartner.
Van Baker, VP of Gartner Research, indicates that there are two primary reasons Facebook Commerce is failing to take off: “Retailers are reticent to move their e-Commerce activities to Facebook because they already have sites that they maintain to provide customers with a better experience,” he explained. “The other factor is that many Facebook members have no desire to conduct commerce inside Facebook. For most members, the social networking site is their vehicle to keep track of activities in which members of their network are engaged. In the majority of cases, these activities are not centered around purchasing activities.”
However, many retailers are tapping into Facebook to improve relationships with shoppers and integrate targeted offers and promotions. For example, when a consumer follows a retailer’s page, marketers can link the shopper’s information to a loyalty program. Merchants also can use Facebook as a vehicle to increase awareness of special online and in-store events.
“Many retailers have become adept at engaging their consumers inside social networks with promotional activities and other strategies that build loyalty and goodwill among customers,” Baker said. “Some merchants have developed contests, while others have put up pages in which customers can participate, such as photo sharing sites. Customers appreciate that these strategies are not focused on transactions, but building relationships.”
Today’s shoppers are presented with more channels to browse and buy items, leading to greater competition among retailers. To pique consumer attention and drive traffic in-store and online, many merchants are integrating more location-aware offers. Gartner research predicts that by 2015, 50% of leading Tier 1 retailers will be creating and executing real-time personalized offers for their best customers.
By tapping a more localized marketing strategy, retailers can tailor their assortments and minimize markdowns, according to Bob Hetu, Research Director with Gartner’s Retail Industry Services team.
“Improved purchase rates are driven by a more accurate understanding of customer purchase behavior, and localized knowledge of assortment and inventory availability,” Hetu said. “Overall, we predict that future activities surrounding context-aware technologies will continue to improve redemption rates.”
Several retailers are releasing coupons online and via direct mail, and pushing geo-targeted messages to shoppers while they’re in or near a store location. To create a winning strategy, merchants must tailor price, offers, services and items to individual customers. This can be achieved by adopting multichannel analytics and business intelligence solutions, according to the report.
“Use multichannel analytics and business intelligence to support detailed customer segmentation,” according to the report. “Identify and target the best customers. Prioritize the best customers, and provide them with the best treatment, including promotions, faster service, exclusives and personalized relationships.”
- Digital Receipt Solution Expands Communications ‘Real Estate’
- Can Retailers Keep Pace With Millennial Consumers?
- Timberland Tablets Blaze A Trail Connecting Physical And Digital Commerce
- New C-Suite, Data Centralization And Other Trends Transforming Retail In 2016
- Walmart Taps Former Target CMO To Replace Outgoing Exec
Latest from Alicia Fiorletta
- Lush ‘Merely Scratching The Surface’ Of Multi-Billion Dollar Cosmetics Market
- Innovation Labs Help Retailers Keep Pace With Industry Shifts
- How Moleskine Innovates In A Digital World
- Boll & Branch CEO: Great Products Are The Foundation Of Successful Sustainability
- Touch Of Modern Creates Curated Shopping Destination For Men