The confluence of bricks and clicks continues to grow as physical retailers buy and code their way to a stronger online presence and digital retailers buy and build their way to a stronger physical presence. E-retailers like Amazon and Alibaba may capture the majority of the headlines in the press, but the ultimate winners in this battle have yet to be confirmed. Meanwhile, traditional retailers are pursuing some innovative ideas and practices to build share of shoppers’ wallets.
Case in point: According to recent Nielsen e-commerce data, Amazon’s dominance in digital retail, specifically for consumer packaged goods, is falling. Nielsen reports that during the past two years “established brick-and-mortar stores have taken back share and closed the competitive gap.” The data also indicates that some of the largest traditional retailers have experienced dramatic growth, with Walmart, Kroger and Target increasing their online customer base by at least 90% in 2017 and 2018. Nielsen also reports that the share of click-and-carry sales grew from 4% to 11% of all CPG e-commerce sales in just two years. All good news for traditional retailers looking to stay abreast of customer experience expectations.
Many of the opportunities brick-and-mortar stores are now taking advantage of leverage their primary asset — the physical store. The time seems ripe, in fact, to “make the store the hero,” by going above and beyond with new store experiences. Layering promotions; curating in-store event-based experiences; and activating unique, consumer-forward brand partnerships are all rich fodder to attract, keep and delight the in-store shopper. Five basic steps successful retailers are deploying to better leverage the physical store include:
The results of deploying these strategies are dramatic. Lowes Foods, a southeastern supermarket chain, created a shopper-centric approach by deploying an in-store continuity programme that rewarded shoppers with high-end cookware for buying promoted items and increasing their spending. Under these guidelines, the company experienced a 65% sales lift in supplier products participating in the promotion and created more than a 10% increase in shopper frequency.
Based on BrandLoyalty’s experience in Europe, Asia, Brazil and Australia, retailers investing in short-term loyalty, continuity and similar programmes that make the store the hero see an average increase of between 3% and 7% in total sales, and an additional 5% to 8% activity from the most profitable shoppers. These programmes have proven success in creating a differentiated and exclusive first-mover advantage for retailers around the world.
Traditional retailers are in an existential battle for survival. By making the store the hero through continuity programmes and similar promotions, they can build the engagement needed to keep shoppers coming back and spending money. The result is the classic win-win-win for the retailer, suppliers and the shopper.
Bruce Kerr is president of BrandLoyalty North America and a retail contributor to Mass Market Retailers, where the original version of this article appeared.
Take a deeper look into our programmes and concepts by reading our case studies.Go to case studies