Recently, IKEA announced their acquisition of TaskRabbit, the platform for hiring people to, well, build your IKEA furniture. This is the latest example of the major shifts retailers need to make if they hope to survive the next five years. As retailers struggle to gain traction with millennials, they need to find a way to convince people to buy anywhere beyond Amazon. But what can marketers do to help their companies survive? They need to offer more than just traditional discounts, and they need to change the way consumers interact with their brands on a fundamental level. To do this, marketers need to establish rock-solid brands and a deep understanding of their customers.
An Offer is Not Enough
As a retailer, it is no longer enough to offer a sale to your customers and expect them to come running. While price remains a key factor for consumers along their path to purchase, it also offers an opportunity for that same customer to take an exit ramp off their path to purchase and choose another retailer. An example: you send a marketing email offering a promotional price on your latest widget, sparking interest in the consumer. If the consumer isn’t deeply loyal to your brand and the experience of purchasing with you, they may take that spark not to purchase with you but to search for that widget in another location, seeing if they can find a better deal. If price is the only reason that a consumer is going to purchase, you walk a dangerous path to purchase, one with too many exit ramps for comfort.
But what if, instead of competing just on price, the offer is unique to your brand?
Then the marketing email isn’t about the promotional price for the widget but instead for the pairing of the widget with another product you offer or a unique experience paired with that purchase? If you sell cookware, that promotional email is about the recipes that come with the purchase or the cooking class discount with a partner. For example, if you’re IKEA, you offer TaskRabbit services to help build that affordable but exhausting furniture you’re considering. If you’re an ecommerce company, you offer a beautiful, unique, frictionless purchasing experience.
It isn’t enough to simply offer a product and expect consumers to purchase it. When you compete on traditional offers and discounts, you compete against Amazon and every other app on your customer’s phone. It is only when you change the purchase from a commodity to an experience that you compete alone.
What Marketers Need to Do
As retailers embrace this experiential shift, they need to consider its impact on their marketing plans.
Build Your Brand
When customers are turning to your brand for an experience, branding is critical. Marketers must build a rock-solid brand that consumers come to, not just receive information from. By becoming a resource and experience for your customers, your competition is no longer Amazon or other apps.
This brand building looks vastly different for different retailers. For ecommerce sites like Dollar Shave Club, it means creating content that is irreverent, funny, and often a bit off-color. By speaking loudly in a deeply unique voice, they have built a $1b business out of a niche. For more traditional brick-and-mortar retailers, it can mean building a seamless cross-channel shopping experience from app to website to store.
Know Thy Customer
Of course, marketers need to know who their customers are. But it’s more than that.
Marketers need to be able to identify their customers across channels – to know that Jane Smith is the same Jane Smith on her smartphone, her tablet, and her desk at work.
Marketers need to be able to segment their customer base according to metrics that are actually meaningful to purchase. It isn’t just enough to be able to segment geographically. Does that actually matter? What about by age? For some companies, these segments are critical to successfully adjusting messaging. For others, the past purchase history is the most important piece of data.
And marketers need to be able to anticipate their customers’ needs. Marketing is at its best when it is focused on the customer’s need, even if, especially if they haven’t yet identified that need themselves.
The retail landscape is changing, but it need not be bleak. With planning and forethought, nimble marketers can guide their brands carefully through these challenging waters.
Editor’s Note: This post is by Kristin Grages, a freelance writer on nDash who specializes in topics ranging from marketing & advertising to computer software. To learn more about Kristin, check out her nDash profile page.