Melanie Vala, chief commercial officer at Splitit, shares why the retail marketing effort should address growth and competition, the surge of online shoppers, sustainability, AI and payment methods.
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Online retailing is in the midst of rapid growth and evolution, significantly accelerated by the impact of the pandemic. In fact, e-commerce revenue is expected to reach a staggering $5 trillion this year and shopping patterns continue to shift.
Now, retail marketers must determine how they can take these changes and apply them to their marketing strategy moving forward.
It’s important to realize that today’s shoppers have a considerable amount of control over their path to purchase via a variety of channels. To drive sales in an increasingly competitive environment and meet ever-evolving customer needs, marketing teams must create memorable experiences at every touchpoint that keep shoppers satisfied and coming back for more.
As we look ahead to the rest of 2021, here are five top macro trends retailers should keep in mind when evaluating their marketing practices:
1. Continued growth and competition
The continued growth of e-commerce will lead to more companies entering the field. This increased competition puts added pressure on companies to remain relevant to their customers and to foster customer loyalty. In the past, merchants offered loyalty program perks for use only in their brick-and-mortar stores, but that’s changing. Now, online retailers are expanding loyalty programs to include online and mobile purchases.
One way retailers are doing this is by offering memberships that allow customers to save if they commit to a monthly membership fee that goes toward their purchases (e.g., Amazon Prime, Instacart, and Fabletics). Another way digital retailers are expanding loyalty programs is by offering subscription boxes or subscription items that are convenient or provide cost-savings. Today’s brands would benefit from evaluating whether these offerings could contribute favorably to boosting sales growth and brand loyalty and incorporating them into their marketing plans accordingly.
2. The surge of new online shoppers
The pandemic brought many homebound customers online and mobile for the first time. Now e-commerce stores, rather than brick-and-mortar ones, are the primary purchase path for many brands. To keep these new customers engaged, digital marketing strategies must include technology to ensure that the purchase path for the company’s merchandise is easier than that of competitors. This could include robust search and filtering capabilities so that customers can find what they want quickly, unobtrusive but effective personalization at each contact point, sites that load almost instantaneously and streamlined returns and exchanges.
In addition, ensuring prompt order fulfillment through upgraded logistics networks and increased fulfillment efficiencies will be key to gaining and keeping new customers. So will the use of chatbots, which can help customers find what they want, when they want it. Retail marketers who embrace technologies that improve performance will be in a better position to attract rising numbers of online shoppers to their sites.
3. Buy now pay later
Another way to make digital shopping more comfortable and more attractive is to offer the option of buying now and paying later. While credit cards have always provided this option, most buy now pay later (BNPL) vendors charge no interest or fees and don’t affect the customer’s credit utilization metric on credit scoring formulas. BNPL was popular pre-pandemic, but during the pandemic, consumers have preferred longer payment plan options. In fact, more than 40% of checkouts have moved from a five-payment-plan option to a seven-payment plan option. Online retailers that offer BNPL options experience increased spending among shoppers, lower risk of cart abandonment and customers coming back if they have a positive shopping experience. If your brand isn’t offering BNPL as a payment option, now would be a good time to provide shoppers with this added flexibility.
4. Sustainability
More and more, shoppers want to support companies that have been produced in an eco-friendly way or that preserve the environment or encourage recycling. The notion of sustainability contributing directly to the bottom line has been problematic for most companies to accept until recently. By 2030, at least $12 trillion of marketing opportunities will be linked to the United Nations’ Sustainable Development Goals. Online retailers must implement sustainable practices and develop marketing strategies to support this.
To this end, online retailers should consider practices like including sustainability messages in all advertising, social media, and influencer marketing, re-examining packaging materials, sending electronic receipts or adding either products that encourage sustainability or looking for eco-friendly alternatives to existing ones.
5. Artificial intelligence
By 2022, online sellers are projected to spend $7.3 billion on artificial intelligence, up from an estimated $2 billion in 2018. Modern retail brands can leverage AI to improve the customer experience through personalization. Offering personalized experiences onsite or in retail marketing efforts have been shown to increase sales. In one study, 40% of customers said they spent more than they had planned when retailers used a high level of personalization. AI also helps drive sales by improving the voice commerce experience and through fulfillment efforts. Continued investment in AI will help today’s brands stay competitive and keep customer satisfaction at high levels.
If we’ve learned anything from 2020, it’s that retailers can no longer dictate how and where customers will buy. Throughout the remainder of 2021 and beyond, retailers will need to stay flexible and communicate with customers regardless of whether they buy in-store, online, or via a mobile device, or what payment method they select.
Retail marketers who focus on personalizing the shopping experience with the help of AI and promoting environmentally friendly practices will help drive sales growth for digital marketers. As e-commerce continues its upward trajectory and digital customer experiences improve, e-commerce retailers who plan for and develop marketing strategies around these trends will be in a much better position to reap the benefits.
Melanie Vala is chief commercial officer at Splitit
Melanie Vala is Chief Commercial Officer of Splitit, overseeing global sales and marketing for the company. Vala joined Splitit in January 2020 as VP, Europe, and previously held leadership positions at Prospa, Paypal and Intuit.
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