Hyperconnected and spoilt for choice, modern-day consumers expect unique and personalized brand interactions that seamlessly blend the physical and the digital. To thrive in such a world, brands need to pull out all the stops to stay relevant by connecting emotionally with their target audiences, forming strong and lasting bonds.
Research by McKinsey reveals that 71% of consumers expect companies to deliver personalized interactions, with 76% getting frustrated when brands fail to deliver on their promises. These statistics further drive home the need to use data for personalization efforts across an omnichannel landscape.
This is where smartphones have proven to be invaluable. The rapid penetration rate of these devices has provided marketers with access to a wealth of valuable consumer insights. By using them to shape consumer experiences, brands can take their personalization game to the next level.
COVID-19 saw the rise of several frictionless alternatives to traditional in-store shopping methods, propelled by a surge in smartphone usage, mobile payment systems, and global lockdowns and travel restrictions. As people were unable to leave their homes for long stretches of time, they had to rely on their smartphones or connected devices for their food, groceries, and shopping needs.
With the global value of digital wallet transactions set to reach USD 12 trillion by 2026 (as per Flywheel Insight), brands are integrating mobile initiatives with brick-and-mortar stores in an attempt to blur digital and physical boundaries and create strong engagement with shoppers.
More retailers are leveraging QR codes, mobile self-checkouts, and personalized notifications to deliver a mobile-centric in-store experience across all stages of the shopping journey.
Some brands are taking things a step further by dabbling in AR navigation and smart shopping carts. Almost 75% of the global population is forecasted to be frequent AR users in the near future, while 66% of consumers are looking to AI for help when making purchasing decisions. Smart shopping carts, on the other hand, can be integrated with smartphones to link to shopper accounts and pre-built digital shopping lists.
Global luxury travel retail DFS Group recently launched its first-ever virtual universe, DFS World. As part of a campaign titled “Open Up Your Horizons”, the virtual experience invited customers globally to enter a digital luxury playground that promised immersive in-store activations for premium skincare, fragrance, and beauty brands. Among the store’s beauty themes was the metaverse-inspired “Future You”, which used radiant cosmetics and scents to mimic virtual filters.
Beauty retailer Sephora’s Singapore-based “Store of the Future” concept featured a physical store comprising exclusive hair and beauty products, masterclasses, cashless payment steps, and a slew of interactive digital touchpoints titled “Play Tables”. Using their smartphones, people could learn about product reviews and ratings, watch interactive tutorials, and book free beauty classes via the Sephora mobile app.
As physical loyalty cards are replaced by mobile loyalty programs, brands have an opportunity to prolong the length of their engagement with shoppers by keeping up interactions long after they have exited the physical stores. While many now offer free loyalty schemes that encourage the collection of points in exchange for rewards, paid membership programs often employ an omnichannel approach that straddles both physical and digital realms.
Digital memberships provide brands a wealth of access to first-party shopper data that can be leveraged to create personalized promotional strategies, as well as offer diverse retail opportunities crafted by partners. For instance, Asian health and beauty retailer Watsons China collaborated with messaging app WeChat to create “My Store”, an in-app rewards experience where 22,000 beauty advisors are available to connect to customers on any follow-up questions regarding products.
Physical store formats are evolving to become multidimensional and interactive, especially with the integration of digital touchpoints. In high-traffic areas, brands have been leveraging scannable QR codes and geolocation push notifications to interact with customers in-store.
As technologies like geotagging and smart beacons become increasingly sophisticated, brands will be able to deploy increasingly granular levels of in-store engagement — down to driving product interest when shoppers are at a specific aisle, or close to a competitor’s product.
Major ecommerce player ZALORA worked with Adidas to open up The Supermart pop-up store in Singapore to drive visibility for the sporting retailer’s online presence on its platform. Shoppers had the opportunity to browse the store, scan the unique QR codes on each item, virtually add the Adidas products to their ZALORA shopping cart, and have the items shipped to their homes. To further elevate the physical shopping experience, The Supermart pop-up also featured product packages featuring graphic artwork by local designers and illustrators.
Retailers on the lookout for efficient, store-based operating models will be heartened by the rise in popularity of unmanned and friction-free formats. In an industry-first move, leading Japanese convenience store chain FamilyMart plans to open 1,000 unmanned convenience stores in the country by the end of 2024. Equipped with AI-powered cameras, shelf sensors to track products, and unmanned checkouts, these stores offer the opportunity to cater to consumers in less densely populated areas.
QR codes and cashless payment systems are also among the exciting developments occurring in the frictionless mobile app shopping space. More retailers are leveraging QR codes for a variety of uses, including paying for items at unmanned checkout counters by attaching a payment card to an in-store e-wallet or attaching them to receipts.
Sustainability as a priority is gaining traction amongst shoppers, and brands and retailers have been responding accordingly, using mobile to deliver a frictionless omnichannel shopping experience. For instance, Unilever’s LOOP initiative, which positions itself as a global, waste-free shopping system, offers consumers the opportunity to scan and return their empty containers.
Dutch dairy brand FrieslandCampina also launched a new packaging initiative in Singapore empowering customers to track the source of its infant formula milk brand, Friso. FrieslandCampina’s scannable QR system, Friso TrackEasy, also provides shoppers with batch-specific information about Friso’s dairy farming process, from milk collection to export. These initiatives have been key in building trust and emotional connection with shoppers.
“Brands across the globe are working hard to elevate the consumer experience both online and offline. In more sophisticated markets, big retailers like Walmart, Woolworth, and Coles, are playing a significant role in marrying physical and in-store experiences,” said Tanya Gomez, Head of Advisory, APAC at Flywheel, on the recent developments in the omnichannel and digital commerce space.
“Southeast Asia however, is a little more fragmented — in this part of the world, it is not uncommon for brands to differentiate their offline and online offers. For instance, if you can buy a bundle of three products online, you would only be able to buy them individually in-store. Manufacturers and retailers here need to make better use of the wealth of consumer information available from in-app purchases and activity.”
At the end of the day, consumers expect deep connections with brands they love, and a robust omnichannel strategy is an effective way to deliver peerless shopping experiences. Simply being present on channels their target customers frequent is not enough — brands must provide consistent personalized experiences across all channels and platforms.
Given that within the next five years, 55% of global retail sales will come from ecommerce (with APAC accounting for the majority of the growth), brands need to craft winning strategies to succeed.
Flywheel can help brands and marketers stay ahead of the curve with opportunity assessment, competitive intelligence, strategy formulation, and a wealth of other solutions. Our team of retail experts works closely with brands to help them with digital ecosystem management, supply chain fulfillment, and shopper engagement and retention.
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