Beyond a consumer's basket, retailers are also looking at digital engagement for insight to better serve their base.
"Digital engagement is reducing [consumers'] need to make trips to the mall and other shopping venues," says Jon Weber, managing director and partner at Boston-based L.E.K. Consulting, and leader of the company's retail and consumer products practices. The challenge, he adds, is that, "while not everyone is the same, retailers and brands need to find a way to not get 'lost' as the consumer shops in different ways and different channels."
E-commerce, according to IRI statistics, currently accounts for 1 to 2 percent of CPG sales, but annual growth of the channel is expected at 15 to 20 percent. That's a lot of potential expansion for retailers to anticipate how to best meet consumer needs via e-commerce in addition to traditional brick-and-mortar stores.
The challenge is breaking through the consumer's "continuously divided attention," says Tricia Garrett, management consultant of The Parker Avery Group, Atlanta, Ga. Add in the fact that mobile technology is a key driver behind consumer demands like obtaining information about products and services, and the need for instant gratification, and retailers are struggling to figure out how best to use digital engagement.
The retailer that is able to cut through the clutter and not have their promotional efforts ignored, Garrett notes, is the one that is able to provide the right product with the right messaging, at the right time, with the right delivery method. Oh, and in today's "I want it now" world, the product has to be in consumers' hands right away.
"Retailers know this," Garrett says, "and they are working on honing their marketing efforts toward more personal experiences, both digitally and in the store. Mobile will morph to become even more pervasive, but how that translates into retail capabilities and value remains to be seen."
The Personalization Prospect
Providing a more personalized experience for shoppers has been on the radar for many, if not most, retailers in recent years. Consumers are bombarded by more and more advertising through multiple platforms, so it's no surprise that eventually all marketing becomes one big blur. Differentiating yourself as the retailer of choice for consumers is getting harder.
But it's not impossible.
For years, retailers have been collecting data on their consumers, predominantly from entities like shopper loyalty programs. And while that data has proven useful, myriad data remain that aren't being harnessed as effectively to provide retailers with the insights they desire.