How the connected consumer increased the level of challenge for retailers (and Covid isn’t to blame)


By Sam Holding, head of international, SparkPost

According to IMRG, the UK’s online retail association, online sales in the UK grew by just 6.7% in 2019, but “a surprising surge in sales during Q4 suggests that it could be on track to bounce back in 2020″. That optimistic forecast was back in 2019, and it reflects the anticipated position of the retail sector in a stable landscape and relatively normal market conditions. Of course, when analysts and market experts were making predictions for 2020, little did they know that this would be a most disruptive year for global markets, with emerging adversities and anomalies. 

The rapid spread of coronavirus has added to the challenges retailers were already facing. The current pandemic has changed consumer behaviours in several ways: more people have shifted to online shopping, many have changed shopping habits, or even consolidated shopping trips to avoid unnecessary exposure. On the other hand, the increasing uncertainty has forced many retail businesses to accelerate provision of digital services, or redirect their focus towards their strongest asset: customer loyalty. Customer engagement and loyalty have always been two very important metrics, of course. Today though, they have become absolutely crucial.

The biggest challenge for retailers is not the pandemic or an economic downturn, though. It’s customer expectations which have been subject to continual change over the last years. When these expectations are not met, customers churn; and retailers know that very well.

Connecting with the connected consumer

New trends and advances in marketing automation have redefined the way businesses look into their customers, as they develop a “consumer-first” mindset. Businesses need to be up-to-date with their practices, and regularly review and evaluate their programmes to keep up with new tools, current trends and, most importantly, the increasing customer expectations.

Consumers across the globe are connected via all the devices in their lives, and they have become more proficient with tools, media and apps than ever before. The connected consumer is now at the epicentre of the digital world. What used to be the “internet of things” is now the “internet of me”, and consumers expect that all the things they want and need will be just one click away. When the connected consumer walks into a store, they know what they’re looking for. They also expect the retailers to know, and respond accordingly. With marketing technology (and a number of smart tools and apps) woven into the fabrics of consumer behaviour, the business is expected to be proactive and deliver on customer expectations.  

Offering an immaculate experience throughout the customer journey is not easy, but for many businesses this has been the only way forward. As most consumer products have become commoditised with very few differences and unique selling points, the connected consumer is in pursuit of better service. Not every company has a truly unique product, but any company could potentially deliver a truly unique customer experience. 

While marketing technology is generally on the rise, email remains the king of business-to-consumer communications. According to a recent report, 43% of the retailers agree that email marketing is a significant tool to customer acquisition for their business. But while the cross-industry average email open rate is 18%, retail scores lower at less than 15% – although the bounce rate in retail is one of the lowest (source: CampaignMonitor). And while the abandonment rate in retail is more than 75% (source: Salescycle), 40% of retailers in Europe send a cart abandonment email after two days or more; proving that there is definitely room for improvement. 

Assisted by Martech and the rise of analytics, marketers can design and deliver programmes that bring the highest return and enrich the day-to-day interactions consumers have with the business. For customer communications, email has always been an indispensable tool. Retailers can capitalise on email to optimise the brand experience for the connected consumer. To maintain a good level of engagement, though, businesses have to invest in developing meaningful interactions and prove that they are loyal to the customer. There are several MarTech providers out there who offer a plethora of solutions and analytics tools, so retailers can improve their campaigns and make them more relevant to the ever connected, ever demanding customers.

Consumers have always been making emotional connections with brands; even more so in a time of crisis. The current crisis has served as a powerful trigger for retailers to optimise the level of personalisation and engagement with the connected consumer by exploiting operational, contextual and behavioural data.

Email remains a pivotal tool. Companies rely on email and analytics that can help them develop a smooth and timely transition strategy to address today’s evolving market challenges, enhance brand loyalty, and keep the connected consumer engaged. The more loyal brands remain to the connected consumer, the more customers will reciprocate.