In a Dynamic Retail Industry, One Thing Won’t Change in 2022

Shoppers are getting back out into the world after being at home and their behavior, preferences and activity continue to completely transform. Some are continuing to nest in Zoom-professional spaces with accents and apparel to match, while some are gearing up for new jet setting adventures — looking for anything from resort wear to travel gear and beyond. These shoppers are ready to spend more and create all kinds of different rich spaces and experiences for themselves — wherever that may be. 

And as stay-at-home imperatives are lifting and shoppers continue to reemerge from their homes, retailers are reemerging from two years of total unpredictability themselves. 

Shoppers have always changed and evolved in ways they interact with brands, but that feeling is compounded by the environment we’re in right now. Technology underwent a huge boom with new innovations and capabilities. First-party data is on the rise with third-party cookies going away. iOS15 updates are changing the way marketers measure shopper interactions. And on top of it all, the global supply chain shortage is causing inventory problems for retailers in almost every industry. 

6 ways top retailers are transforming the industry

Retailers are trying to either get back on track after 2020 or rip up the foundation and lay completely new tracks for 2022. 

So, should retail marketers throw out the playbook and try something completely new this year? Or stick to the status quo? We’re approaching a new year where a retailer’s risks are their opportunities, and the only constant is unpredictability — but there are opportunities to predict more than you think.

We sat down with marketers from Frette, ULTA, JTV, Bass Pro Shops, Reebok, ShopTrue, Glo Skin Beauty, Noble Panacea, Missouri Star Quilt Co., Goop, Adorama, Brady Corp. and The Paper Store to see how these brands are exploring opportunities in the new year.

1. Build-a-Customer doesn’t work anymore

What a brand knows about their customers is usually an amalgamation of some pieces of basic data (e.g. identity and past purchases) and what a brand believes their “ideal customer” or “ideal personas” should be. But with the wealth of shopper signals online and third-party cookies going away, brands have an opportunity to lean into first-party data to identify their shoppers and become better acquainted with each individual’s preferences.

To do that, brands need to understand the dynamic relationship between shopper and product data in the moment, in order to uncover those individual preferences (does a customer need a discount to convert? Do they have a preference for a certain category?) and use that information to create a relevant set of 1:1 communications.

2. Give your shoppers the opportunity to discover more

One way to seize an opportunity for your brand this coming year is simply by creating opportunities for your shoppers to discover new products. Everyone who approaches your brand is looking for something at least a little bit different than the next. By putting exactly what your shopper wants under their thumb, you can both improve the customer experience and encourage purchases.

Identifying these products and getting them under the right thumbs is all about providing a series of communications that surface personalized product recommendations based on those individual shopper preferences. Think of this as helping your customer navigate the variety of products on your site with as few clicks as possible. This can take the form of new arrivals campaigns for your full price buyers, best seller campaigns for those that love trends, and similar on-site messages and recommendations that use A.I. to understand where your shopper is in the buying process. 

You can also identify products that have low visibility on your website but high conversion rates and surfacing these products to shoppers who either purchase in that category or are likely to purchase in that category. This way, you can boost visibility and lead shoppers to that next best purchase on whichever channel they shop. 

3. Unlearn what you know about channels

It’s not about driving all of the traffic to your site; it’s about driving the right traffic to your site. The cost of ads are getting higher and higher, causing retailers to back away. But reimagining how you leverage channels and reassessing who you’re sending messages to on those channels and why will be a key opportunity for retailers this year. 

By getting smarter about building and approaching audiences on paid media and only targeting audiences who are highly likely to purchase, you can save on spend and efficiency. These efforts have had measurable impact for some brands not only for acquisition, but also for customer retention. This way you’re bringing in the shoppers that matter for this purchase and the next.

4. Nurture a discount detachment:

This year, retailers are looking to turn an old tradition on its head — discounting. Shoppers are conditioned by many major retailers to wait until a product moves into the sale section to purchase. But this teaches shoppers to wait until they get a discount because they’ve come to expect it. If you’re demonstrating personalized value to your shoppers and delivering product recommendations to them when they’re ready to buy, you can condition your shoppers to see through the discounts and purchase at the full value of each product.

And contrary to popular belief, discounts are not necessarily the strongest draw for shoppers to begin with, since not all shoppers require a discount to convert. 64% of shoppers report that they look at other factors before discounts when they’re engaging with a brand. With technology that can discern the likelihood of a shopper to actually purchase a product (and at what discount level) you can protect your bottom line by only giving discounts to shoppers that need them to make a purchase. By launching campaigns that only surface discounts to the shoppers that absolutely need them to convert, you’re saving your bottom line and minimizing shopper expectations for discounts.

5. Re-engage your holiday shoppers right now for a strong 2022

One of the biggest opportunities for 2022 is happening right now — the one-time buyer. 74% of buyers only buy once and 59% of your holiday shoppers will be first-time buyers. 

And the best way to keep those new or re-engaged holiday shoppers is to get them to a next purchase within 100 days, which increases the likelihood that they’ll continue to come back. So bringing your holiday shoppers back now is key to success. Whether it’s through loyalty program reengagement during the holidays or something else, nurturing those one-time buyers during the holidays will open up a huge opportunity for building lifetime value in the new year.

6. Balancing shiny and new with tried and true

This year, there are more opportunities than ever. It can be hard to decide between which strategy to apply where, and which message to send to which customer, and what channels and formats to explore. But any new initiative you’re trying and any new tech you’re implementing needs to be tied to outcomes. Things like AR/VR, AI/ML, and TikTok are great, but only if they’re getting shoppers to buy again and again. But staying grounded not just in your customer, but in programming that targets shoppers through a cyclical loop of identifying your shopper’s behavior, converting your shopper to purchase, and optimizing toward lifetime value with continuous self-learning rooted in data can make those decisions for you. 

Letting data be your tiebreaker can be the difference between exhausting spend on launching costly campaigns on new digital platforms and simply recommending what a shopper is likely to buy next on email. It might not be quite as shiny and fun, but it’s what shoppers want more than anything else.

Conclusion: Change is the only constant

The truth is that your shoppers aren’t the same people they were in 2020. And they won’t be the same in 2024 or 2030. As shoppers continue to change, the way that retailers will keep them at the center will entirely depend on their ability to move at their pace and predict and execute on each customer’s unique lifecycle and path to purchase, again and again.