retail trends Archives - People Powered E-Commerce

How Retailers are Using Video to Increase Sales

Videos, and the immediate distribution of them through the internet has profoundly changed the way we live…and shop. We’re relying more and more on using video to help us discover and compare products we are looking to buy and retailers know it.

Traditionally, the merits of video were merely practical: it helps boost your Search Engine Optimization (SEO), helps your brand establish trust, and increases discovery to your site if you have a video people love to share. But there is so much more to video. Video still does all of that, very well, but it can be worth much more to your brand.

Retailers who adopt video are finding amazing ways to connect with customers or potential customers, and seeing existing customers’ average order value rise. In a recent survey, 57% of retailers said video is responsible for increased spend from the average customer.

So, how are winning retailers using video? Here are some great examples:

They’re engaging fans of their brand regularly

A clever campaign by JCrew on Instagram Stories

Retailers who are hesitant to deploy video should understand that more video means higher order values. A study found a startling 69.49% increase in order value the more videos a retailer deployed.

J Crew is a company that is using video very effectively. On their Instagram, they regularly post videos. Some videos are explanatory (like “How to Wear Denim on Denim”) while others are aspirational, but all of them serve a purpose: to draw Instagram followers in and entice them to make a purchase. Instagram Stories, a collection of pictures and video can help set the mood for customers looking to buy a new jacket and get them to purchase after seeing a 30-second clip. What’s more, Instagram stories expire in 24 hours, so J Crew has deployed them for sale announcements to drive excitement.

J Crew can also post a video of a new product and get immediate customer feedback. This can help them tailor future product lines based on verbatim criticism or praise.

They’re demonstrating products to bring the in-store experience home

A playable electric guitar shirt is much more interesting with video, no?

Photographs of products offer a limited amount of information about an item because there is little context. A video is an excellent way to show how large an ottoman is in relation to a child, a dog, or an average sized couch. Video can show you how a dress pattern moves or how long the hem REALLY is on a dress, where a photo simply cannot provide this kind of detail. Video can also show how easy it is to use a product (think Apple’s demo videos for everything from iPhones to their Airport Wireless Routers) or how a product can be useful. This is important for items that can’t be experienced in real time online. It helps bridge the experience of trying on an item to the immediacy of looking up a product online.

They’re showing customers how to use their products better

Instant Pot is the home appliance equivalent to a viral video thanks to their creative recipes

How do you explain how to use a brand new product with a learning curve over the internet? Video. That’s how holiday 2017 sensation Instant Pot was able to quickly ramp up their business, by simply showing how to use their category-busting product. Since there are some safety procedures and an interface to learn, Instant Pot knew that by making videos about how to make the most popular and easy to cook dishes, they could lower the barrier of entry.

They also have more advanced videos on their site to explain to intermediate and advanced users how to get the most out of their Instant Pot. It’s working. The Instant Pot is not only wildly popular, it has inspired dozens of knockoffs from major kitchen appliance companies.

They’re creating shareable experiences

This is a fun execution of video and experience!

Can you convert your fandom into walk-in traffic to your store? Give them something to talk (or snap) about. Recently, Eddie Bauer launched Cold Rooms in some of its retail locations to allow consumers to test out the efficacy of their cold weather gear. The Cold Rooms are designed to look like Ski Chalets and even have ice sculptures inside. Why? So visitors will share their video #Experience on their own social media, thus encouraging others to do the same, and raise awareness of this new way to shop.

They’re making themselves indispensable with advice

The Home Depot has a how-to for everything…including the kitchen sink!

Can you get someone to buy something they didn’t even think they needed? Ask The Home Depot. They have hundreds of videos showing how easy it is to change the hardware on a bathtub, or install a baseboard, for example. Home Depot understands that people don’t just need to be walked through the steps, they might actually need to know what products they’ll need to complete a project. Seeing objects in context and in use is crucial to convert shoppers who are unclear about a product’s worth or how to use it. Showing customers the complete project allows them to get fully equipped and retailers to sell more items, increasing cart size per visit.

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Video might seem like a big undertaking for your company, but there are so many advantages that it’s worth your investment. There are so many ways it can be applied to draw in shoppers, and so many advantages to trying out a video campaign, you might want to try to start out small. Even a few videos highlighting a sale, your staff, or a special event can help you connect with and build an audience.

Once you build out a video plan and commit to creating regular videos, you could see boosts that retailers who have mastered video are already enjoying. Are there other examples you can think of? Please let us know in the comments below.

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ABOUT SALESFLOOR

Salesfloor is on a mission to unlock the power of today’s omnichannel sales associate by connecting them with shoppers online and in-store. We believe that associates are product experts, trusted advisors and social influencers for customers in their local communities. In today’s omnichannel world, retail chains have a unique opportunity to leverage their biggest competitive asset: their people.

Learn all about how this works here.

KPI’s Retailers Need To Track: Part II: Retention, Talent & Marketing

In our last article, we talked about a bunch of KPIs (Key Performance Indicators) you can measure to help keep track of your retail goals, including overhead costs, online and in-store sales. These are all really great ways to measure your success. However, reducing costs and increasing sales may not be your only or immediate goals. There may be other metrics that you want to watch like: attracting and retaining talent, customer retention, even brand awareness. So, then how do you track these?

In this article, we explore what KPIs you can use to evaluate your customer retention, talent attraction, and local marketing tactics.

The Measurement Process

Like we mentioned in KPI’s Part I, measuring your KPI performance this way is a handy skill that helps you create conclusions based on the differences in your trends over time. It’s a vital skill for any retailer, and it’s easy to do with just a bit of experimentation!

First, you’ll need a control group: the reports on your sales, costs, or whichever figure you’re monitoring from 12 months ago. Next, make your business the test group by implementing one of these nifty KPI metrics for a while. Compare those figures from your current period to those from 12 months ago to see the results of your metric!

KPIs for Customer Retention

Cart Abandonment Rate:

Driving sales in e-commerce can be difficult when so many virtual shopping carts never make it to the checkout screen. While it may seem like counting a loss, measuring cart abandonment rate has a thick silver lining: it helps you keep track of potential customers that are already interested in your product:

Cart Abandonment Rate = 1 – (Total # of Completed Purchases / # of Carts Created)

Of course, you don’t need to do the math yourself. Marketing softwares such as those offered by BigCommerce can track your cart abandonment rate and respond by initiating email campaigns that convince customers to complete their shopping journey.

Customer Lifetime Value

Customer lifetime value is the projected revenue that a customer will generate during their lifetime. It’s a great metric that both measures your business’ return on investment and helps you strategize upcoming goals. Determining the lifetime value of a customer is simply a matter of calculating all the sales your average customer has completed since their first purchase and then doing some number crunching:

Lifetime Value = Revenue x Gross Margin x Average # of Repeat Purchases

Don’t know how to measure the average number of repeat purchases? Just use order gap analysis to calculate the time between each of your customers’ consecutive purchases.

KPIs for Talent Attraction

Source of Hire

Job boards, store windows, employee referrals, flyers—it’s easy to spread out your recruitment ads to fish for applicants. But did you know that employees’ performance tend to correspond with their source of hire? Tracking your recruitment sources and comparing them to performance reviews will help you determine which forums send the best candidates to your hiring manager. You can easily measure the effectiveness of your sources by using an applicant tracking system like iCIMS.

Offer Acceptance Rates

It’s easy to reflect on how many of your job offers are accepted, but what about those that were rejected? Understanding why your offers aren’t accepted by candidates can drastically inform and improve your recruiting process, which alone makes it worth measuring:

Offer-to-Acceptance Ratio = Total # of Offers / # of Acceptances

Low offer acceptance rates are a telltale sign that your employment incentives need improvement. It could be that you’re not meeting your candidates’ expectations or cultural tastes, or that they’ve taken a better offer from one of your competitors. Minimize the risk of losing attracted talent before they’re even hired by analyzing candidate feedback and offering new incentives.

KPIs for Local Marketing

Ranking and Reviews in Local Search

When locals search for a product you sell, is it your business or your competitor’s at the top of Google’s results? What about on Yelp, Facebook, or Apple Maps? Your ranking in keyword searches for your area is a strong indicator of how accessible your store is and how far your brand awareness has spread. Low rankings can be improved through SEO optimization tactics, such as pining for positive reviews online. The more (high) ratings you have, the more likely it is for your business to be featured with a star rating within search results. Take a look at Google’s review guidelines to learn more about how it’s done.

Social Media

Social media interactions can be pivotal in establishing your popularity among both current and potential customers, in addition to their own local network. While using this KPI effectively requires you to actively monitor and encourage growth in followers, likes, and so on, it yields great rewards in terms of brand awareness and foot traffic. Both Facebook and Twitter also have built-in analytics that can track customer engagement and web traffic to your site by tracing your shared links. Why not encourage check-ins and use of hashtags so you can follow along with your customer’s engagement?

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Want more KPI tips and tricks? Check out our other article on easy-to-use metrics for overhead costs and both online and in-store sales!

3 Ways Omnichannel has Changed Clienteling

With 73% of consumers now shopping both online and in-store, retailers are on the move to adapt. Enter the omnichannel approach: an integrated shopping experience that allows customers to shop however they like, whether they buy in-store, online, or both simultaneously. The media strategy has brought new possibilities to clienteling by changing the way people shop and how businesses interact with them.

Simply put, omnichannel marketing is improving relationships with customers dramatically, and here’s how:

#1. It brings customers back to you

Over the past five years, foot traffic to brick-and-mortar stores has declined, yet the value spent on each visit has nearly tripled.

Why? Google estimates omnichannel is to blame.

Shoppers are increasingly researching products, ideas, and availability online before heading over to their local store, but it doesn’t stop there—82% of smartphone users say they consult their phones on potential purchases while they browse in-store as well. According to the Harvard Business Review, this studying pays off: shoppers who conducted prior research on retailers’ sites spent 13% more in-store than those who did not.

Providing an omnichannel shopping experience not only adapts retailers to modern purchasing behavior, it also builds customer loyalty. Offering online shopper incentives such as in-store only coupons and free shipping on their orders if sent to their local store gives them options for how to proceed with their purchase and makes the brand more accessible to them.

Digital channels that feature live chat messaging applications with retail associates can especially be used to inspire customers to visit local retailers and experience their customer service first-hand. More importantly, retailers can use this virtual interface to engage with their customers online with the same level of service that they would otherwise have in store.

#2. It puts the customer first

Omnichannel considers the customer experience from their perspective, and in that, convenience is key. Customers now expect brands to be relevant, accessible, and easy to navigate no matter what or how many channels they use. In fact, according to Google, 60 percent of online customers begin shopping on one device and continue on another.

With an omnichannel interface, interactions both online and offline allow shoppers to identify themselves, access their personal shopping history and preferences, and pick up their shopping journey from wherever they left off—whether they continue shopping online or in-store. This cross-platform access gives the buyer total control over their shopping process and ensures that their experience is seamless from start to finish.

By recognizing the value of personalization, the omnichannel approach allows customers to build a relationship with brands at their own pace—anytime, anywhere—and that reliability shapes clienteling.

#3. Data is now a give-and-take

When customers take advantage of the user data saved by omnichannel interfaces, they provide retailers with their own data—behavioral data, such as when they visit the site or store, what products they’ve viewed, and which shopping channels they’ve used. Even clickable products can send in clienteling if monitored by the right omnichannel application. Predictive analytical tools can then use this data to determine which customers are more likely to use discounts, free shipping, or other offers, and then make those deals available to them.

This omnichannel marketing approach makes clienteling easier than ever; it stiffs full-blast email ads by opting for a more successful one-on-one approach that promotes specific offers based on individual shoppers’ needs. Bottom line: This data provided by customers is invaluable for retailers seeking to build a long-term relationship with their clientele.

Does your retail business have an omnichannel platform yet? Getting started now will help adapt your clienteling for the modern world. Check out Think with Google or Salesfloor for apps, articles, and tools to set up your own omnichannel experience.

6 Lessons We Can Learn from Sephora

[title image from Flickr]

Sephora is now the #1 specialty beauty retailer in the world, and it’s all due to how they’re different from your mom’s makeup buying experience. Sephora’s success shows that when you let customers create a shopping experience that works for them, it also works for you. Here’s how you can do the same:

1. Build the in-store experience they desire

When you walk into a back-lit, booming Sephora store, you feel more than welcomed, you feel empowered. Sephora’s approach to merchandising has contributed immensely to their success as they identified all the hurdles of purchasing makeup and promptly tossed them out the door.

Sephora knows that customers are exhausted by the grab-bag quality of pharmacy makeup aisles and the competitive product-pushing found in traditional department stores. The Sephora alternative offers a more accessible shopping experience that’s designed to be low-pressure. Retail assistants are taught to refrain from the hard sell that department stores rely on and instead work with each customer holistically to find the products that match them best while stepping back as needed. This gives Sephora customers the power to choose both their products and their service; they have the freedom to explore the store as they would a pharmacy without sacrificing department store-quality brands, tutorials, and assistance.

2. Offer a personalized approach

Customers are increasingly demanding customization as part of their shopping experience—especially if they’re shelling out for luxuries like makeup. Whether it’s primer for oily skin or moisturizer for dry, Sephora recognizes that their customers require a unique and personalized approach, and they offer this through in-store swatch samplings and makeup demonstrations that allow shoppers to test different brands to be sure they’re buying the right product at the right place.

But Sephora doesn’t stop there: their personalized shopping experience extends to the web, which has been a major key to their success in keeping customers loyal to their brand.

3. Reward loyalty

While baby boomers tend to be brand-loyal, the growing millennial market is more cost-conscious and would rather selectively pick and choose across brands so long as they fit their budget. So how do you get them to be loyal to your business? Give them the most bang for their buck: a loyalty program that rewards them and caters to their needs.

One of Sephora’s secret weapons is its VIB loyalty program, which grants members free gifts, in-store event offers, and discounts after their purchases. What makes VIB so dangerously effective is that it also requests that its members fill out their profile with information regarding their complexion, skin type, and other preferences. Sephora then analyzes this data to create a curated set of product recommendations that suit their specific needs.

The strategy is meant to digitalize the personalized, in-store shopping experience that customers have upon walking into their local brick-and-mortar.

“[We] figured out early on that if we were to get the basics right, we should ask the questions as if we were standing in the store,” Bridget Dolan, VP of Interactive Media at Sephora, shares with Forbes. “What skin type do you have? …If she tells us that she has dry skin then the product that she’s going to receive in an email will have that attribute.”

Evidently, all that tailoring works—Dolan says that a whopping 80 percent of Sephora’s transactions now run through VIB and that clearly, “It’s a win-win.” [Source]

4. Think mobile and digital first

Much of Sephora’s success is due its digital customer experience, which is interactive, multipurpose, and totally on-point. Nearly half of Sephora’s digital traffic is through its mobile interface [source], which features almost all the accoutrements of its desktop site, including a user-friendly layout that conveniently highlights all product news on the front page.

But Sephora didn’t just build their website around their customers’ desire to shop—it also accommodates their pressing need to ensure quality before they buy. This is why Sephora.com is revolutionary for providing sections for user-generated content such as BeautyTalk, a forum for casual customers and experts alike to discuss products, and the Beauty Board, a space for customers to post pictures of how their Sephora-bought cosmetics fare out in the real world.

5. Collaborate with the culture

If your customers aren’t already shopping through your website, they’re still likely to research your products online. Beauty bloggers on YouTube and Instagram are gradually replacing counter clerks in educating consumers on the best makeup brands and application lessons. Sephora embraced this culture by partnering with such key influencers, and their collaboration has indirectly increased the brand’s engagement with all other consumers online.

The reason why is simple: word-of-mouth continues to be the best way to market, and these big-name beauty bloggers are trusted by even the most discerning customers. Bloggers will speak plainly when they feel a product is expensive or reliable, and because customers crave this authenticity, they’re more likely to follow their advice than that of expert cosmeticians. Sephora now owes a great deal of its brand awareness to these bloggers who preach the quality of their products; their promotion has helped increase traffic to Sephora’s online storefront and cultivate a positive reputation on social media.

Speaking of social media…

6. Be truly social

Customers hate feeling that they’re speaking to a marketing department; they want brands with an online presence that’s personified, humorous, conversational. This is why being interactive with consumers via social media is crucial in giving them the experience that they want.

Along with actively liking, commenting, and responding to customers’ posts, Sephora frequently uses their Instagram to share looks posted by their fans. The prestige that comes along with this promotion has since encouraged thousands of users to tag #Sephora in their posts for a chance to be featured on their page. It’s Sephora’s sincere, mutually beneficial, give-and-take relationship here that keeps their customers engaged and their social media truly social.

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Combining the best of both in-store and online shopping is what makes Sephora shine in the industry. The beauty brand knows that digitalizing the in-store experience is the new market tactic, but it’s no secret—and it’s applicable to all retailers.

Want to bring your customer service to the mobile world, too? It’s easier than you think! Get started now with a retail app that works for you.

Retail Associates Through the Decades

If you’ve ever seen the television show Mr Selfridge you know that retail used to be an entirely different business than it is today. Harry Selfridge was seen as a vulgarian when he decided to open a retail store in London and allow buyers to see the goods before they were prepared to make a purchase.

Selfridge caused a retail revolution by understanding customer behavior. He allowed the goods to be put on display and also trained his retail staff on the art of finding the suitable item for any given buyer, thus beginning the first true democratization of the retail experience.

[Wikicommons: Selfridges in the 1920’s]

While the idea of keeping goods under a table is ludicrous to us today, we’ve seen an equally large shift in how retail works and the role of the sales associate. Since then much has changed, and only companies that can see which way the business is going will be able to thrive in the future.

But as much that has changed since the early 1900’s, the pace of change has only accelerated in the last 30 years – especially in the role of the sales associate.

The 80’s: Retail Companies Go From Monolith to Personal

[image: Michael Galinsky/Steidl/rumur.com from his book Malls Across America]

The 1980s were about conspicuous spending and cachet but also focused a lot on the large, department store experience. A good example of this is how many movies in the 1980s involved large department stores.

[Film still from Valley Girls]

Going to a place like Macy’s was seen as a way to get a lot of shopping done at once. Customers put trust into large department stores. Even if an item could be purchased cheaper across town, you were already at the department store, so you were more likely to make the purchase. People used to buy televisions and computers at Sears.

There was another strategic advantage for a customer in the Department Store experience: consistency. You could feel safe knowing that the sales staff were all trained the same way, and were all able to deliver a specific kind of customer care. This was comforting to the person making several medium and large purchases.

The 1980s were part of the era of the Monolith in retail. Employees were given specific instructions on how to dress, down to the type of hosiery and jewelry in some cases, and how to wear their hair and makeup. Training was administered according to one prototype. There wasn’t much room for improvisation. Keeping the standard was important. Sometimes, this came at the detriment to the customer. It was seen as the best way to communicate the brand at the point of sale.

It largely worked. It wasn’t until more competition entered markets and stores specializing in one type of good (for instance electronics, cosmetic, or shoe retailers) began to challenge the authority of Department Stores that we began to see a loosening of the rules.

Department stores had to adapt to the “eager specialist” model from the “monolith” model it had been employing.

Department stores began to ramp up loyalty programs, and engage more with customers in a service model that was more focused on the customer’s wants than how the monolith could fit into the customer’s stated need. More choices were made available across departments at this time in order to further suit customers that didn’t fit a certain box. It was the beginning of the larger trend of personalization in retail.

The 90’s: Stores Move From Approachable to On Demand

The 1990s were the last great heyday of the mall experience. Before e-commerce changed the game for consumers, the mall was still the place where most people went when they needed to shop.

The era ushered in a lot of very specific types of stores: No longer were there “teen clothing stores” there were now “teen pajama and underwear stores.” There were stores dedicated to movie posters. There were stores that only sold various products to scent your home.

On the other side of this was the rise of the specialized Box Store. The idea behind this concept was to provide a seemingly limitless supply of options to a customer for whatever need in a specific vertical (Office supplies, Housewares, Home Improvement, for instance.)

Both of these approaches served the same trend: being an exhaustive, on-demand place to serve customers’ needs. Yes, the candle store wasn’t going to be able to capture sales away from the stationary store that also sold candles, but it was the only place you could get that one kind of French candle, so it captured a certain kind of clientele. The specialty box store was able to scoop up customers who weren’t happy with the selection of 3 doorknobs at their local hardware store by supplying 30 options, and while you were there, you might be enticed to get some paint, caulk, and lighting fixtures.

Sales associates were encouraged to look and be themselves more in these environments. Often there were core pieces of a “uniform” but hair, makeup, and other items were left up to the associate. In box stores, associates were often encouraged to personalize smocks or aprons that were parts of their uniforms.

[Just some of the creative ways uniforms are personalized at the specialty box stores]

Sales associates also had to have an exhaustive amount of knowledge about hundreds of SKUs to hold up the brand promise that their store was the only place to go to get exactly what the customer really needed. They were the font of product knowledge and people often revisited specific sales associates they had good relationships with on subsequent visits.

These stores succeeded by providing the most tempting array of options for consumers to choose from, and gave them empowerment in knowing they could choose from 30 items and not just the 3 they were accustomed to. The 1990s began the era of on-demand retail.

The 00’s: Retailers Transition From “Available to Answer” to Proactive

[gif: Mean Girls 2004]

In the 2000s, commerce began to hit its stride. Now, customers were able to get ratings and reviews on products right on the page they could purchase the product from. There were entire sites devoted to just reviewing retail purchases that shoppers could visit to arm themselves with information. If a certain type of vacuum tended to fail at 6 months, you could find that out within seconds of looking at it online.

Price comparison also became an obsession for consumers. If you can spend 10 minutes of your time instead of hours in a car to find a retailer that could save you hundreds on major purchases, why wouldn’t you?

[Elvert Barnes – 08.Downtown2.WDC.11dec05 on Flickr]

The challenge for bricks and mortar stores and their online counterparts became how to be proactive toward consumers to get them to spend money in their stores instead of at a random online retailer?

The answer was two-fold: Become proactive, and deliver on trust. Retailers put money and effort into making their stores more welcoming. They put sales associates into the aisles to proactively talk to customers and provide product knowledge, and made sales associates on demand (Lowe’s famously had ‘doorbells’ in their aisles to summon sales associates) The Apple Store took this one step further by putting sales associates on the floor to encourage customers to play with their product offerings while they explained the benefits and comparison between models in a proactive, but non intrusive way.

The era of “me retail,” (retail centered around the individual) began to take shape. In-store, customers were encouraged at the point of sale to sign up for newsletters that would gain more and more intelligence as they were deployed, allowing retailers to customize these touches and bring more customers in-store.

Companies like Target used their loyalty programs to proactively suggest items in their customized newsletters to customers in order to increase purchase frequency at point of sale. Customers got used to receiving tailored offers.

What’s Next

Tailored offers have their limits. If you shop for gifts on Amazon, and then log back in, you can see the suggested “items for you” are not “for you” as much as “similar to things you just bought for your uncle.” There are limits to what you can do with data outside of a human touch.

“The next great leap in retail will be in-store clienteling.”

That’s why companies like Salesfloor are investing in what we call in-store clienteling. The evolving role of an associate is an empowered associate, no longer limited to sell and connect with customers in-store. They can connect with their customers online, via email, over chat and through social media any time of the day or day of the week. In addition to this, associates now have a lot of data about customers they can leverage, coupled with point of sale data that show trends like “customers who bought A will be happy with B” or “customers who buy C will return in a month to buy D” but data is nothing without insights to go with it.

Customer preferences and behaviors aren’t generally as cut and dried as we’d like them to be. A person might be primed for a sale based on data, but when they enter a store, they might not be in the right frame of mind, or may regret a “reckless” purchase later, and return it. The beauty of in-store clienteling is that it allows the associate to reconnect with the customer when the timing is better. If the customer isn’t in the buying mood in-store today, they can come back to the interaction a few days later online via the associate or local store’s Salesfoor storefront via URL given to the customer to ‘think about it’.

All of this points at the future of the sales associate being a combination of sales, stylist AND therapist.

[retail therapy is totally a thing…in more ways than one]

Retail is a living, breathing industry and it will always need to reinvent itself to meet the needs of the customer. The ability to marry good data with highly trained people poses the best possible future for retail success.

To Increase Spending, Reduce Friction for your Customers

How can all retailers learn from Amazon Go’s recent experiments?

Remember the first time you watched Star Trek and saw items magically appear in the replicator on demand? The advent of mobile shopping, in-home on demand buttons, and on demand replenishment services is making that science fiction become more of a reality.

[Star Trek Replicator image via: http://memory-alpha.wikia.com/wiki/Replicator]

What’s interesting is that as much as we imagined having unprecedented purchasing power at the tips of our fingers would change our lives, we perhaps didn’t bargain on how it might change our brains and behavior.

Frictionless purchasing is great for situations when customers need something as soon as possible and don’t have a lot of time to spend. Where it causes some concern is a situation comedian Patton Oswalt has summarized “I’ve been drunk enough to order stamps online.” When people lose the friction and barriers to shopping, sometimes they make purchases inadvertently or ones they may regret.

How does frictionless purchasing actually affect human brains? It’s obviously a new field of research, but the parts of the brain that form the reward centre are at work.

Back in 1998, Neuroeconomists at MIT discovered that credit cards, while convenient, did not connect purchasers enough to their purchases the way even debit cards do. This makes it easy to make the purchase in the moment, but not as welcome when it comes time to pay the bill. If something as manual as pulling out one card over another can have such a strong effect on our brains, what can pushing a button, touching a phone to a touchpad or even using a fingerprint do to the experience?

Something MIT has figured out more recently is that frictionless payments not only make people more likely to purchase impulsively, they are more likely to get them to pay more per purchase.

Of course, this is good news for retailers who are looking for lower cost methods to increase cart size. It’s also good news for businesses that are losing a percentage of sales to online outlets… It turns out if you make the experience as easy as possible at point of sale, you can reap the rewards.

If you make the experience as easy as possible at point of sale, you can reap the rewards.

That’s the basic thinking Amazon is running with with their new concept store, Amazon Go. Customers tap their phones on the turnstile when entering and leaving the store the way you might for a subway trip. Everything they pick up in the store is added to their cart and then they simply leave and are charged for the total order.

For convenience based businesses, this could be a new trend. It cuts down on overhead, reduces shrink, updates inventory in real-time and gives deep analytics to a retailer about what people are purchasing and when (consider that this data can be cross-referenced with weather, for instance, to discover that more cookies are sold on rainy days.)

Amazon was right to start this experiment with a grocery store. It’s hard to imagine another retail endeavor with such ripe potential for impulse purchasing. For those with carts, your only limit is your cart. For those with baskets, your only limit is what you can carry. We’ll have to watch to see what the results are of this experiment, but the science tells us this will lead to increased purchase frequency and larger cart size.

An interesting recent change in purchasing is the increase in tips caused by adding tip “buttons” to POS terminals in restaurants. When presented with tip percentage options, people often choose a higher tip percentage than if they had paid cash. There is an interesting bit of cognitive science here. The buttons play on three things – the suppression of friction makes it easier to spend more without consideration, the options indicate to us that perhaps others tip more than we might, and that can create a competition reflex, and we simply have a preference for round numbers. This leads to happier waiters, and much happier restaurateurs as a result.

When presented with tip percentage options (in POS terminals), people often choose a higher tip percentage than if they had paid cash.

How can retailers harness the power of frictionless purchasing? Getting your company fully up and running with a completely frictionless payment system can be expensive and may result in downtime or lost sales, so it’s not always easily done.

If you’re not in the position to switch to a new system, consider adding options. Square is one of many companies offering simple payments that only require a phone or an iPad to work. These systems often add payment options like Paypal, which aren’t available easy elsewhere.

Another option for retailers that seems to be working is the hybrid of buying online and picking up in-store. This way, you’re capitalizing on people who are incorporating shopping with you into their normal routine. If you can make this frictionless, so they can grab and go, you could see lift in your sales and cart size. Salesfloor has a ‘reserve in store” feature coming in 2017. For now, purchases can be made online and shipped to the customer’s home. Stay tuned!

If your business is primarily online, you can consider testing options for your cart procedure. Amazon’s 1-click purchasing is popular for the simple reason that users can shop and go as long as their details are up-to-date.

Looking at the science on the tip button, there are some interesting ideas for e-commerce retailers. Suggesting items that would fill a cart for free shipping or entitle a customer to a perk is an easy, frictionless way of increasing cart sizes. Salesfloor associates can offer these types of perks through a marketing campaign to their clients or more generally, by simply engaging with customers as they shop online.

Not every method of making purchasing frictionless comes down to technology.

Not every method of making purchasing frictionless comes down to technology. Businesses can look to companies like Apple and Sephora for guidance on what the future of payment might look like: having terminals in hand throughout the store, on demand, allowing customers to walk up to a sales associate, skipping big lineups. After the transaction, the customer just walks out. Receipts are sent to their desired email, so they can retrieve them as needed.

The psychology of shopping is an emerging and rapidly changing area of study, but some basic human behaviors remain consistent, which makes it easier for retailers to make small, educated tests of their markets to see whether these tests result in larger carts and higher purchase frequency. We think that retailers who make this leap will have their choice of consumers ready to spend some serious money.

7 Trends That Will Continue to Impact Retail in 2017

2016 has been one interesting year (to say the least). We’ve lost too many of our classic rock icons, we had one of the most divisive political races in history, and we found out that the UK will be leaving the European Union. We’ve talked to many people who are ready to move into 2017 with an eye to a hopeful future, and we are, too.

With that eye on the hopeful future, we’ve taken a look at seven hot trends that have really taken off in 2016 that we predict will make an even bigger impact on retail in 2017.

1. “On demand” Shopping

Though Google’s Project Wing partnership with Starbucks – along with the promise of drone-delivered lattés – has recently been shelved, the inevitability of drones delivering goods to our doorstep at a click of a button isn’t too far off into the future. Ever since Amazon released the test drone delivery footage in 2013, we’ve been anticipating the day we would see our packages flying through the skyline. And just recently, the Federal Aviation Authority gave Amazon the ok to proceed with the service.

Though a few retailers already provide same day delivery and pickup in-store, it won’t be long into the future before it’s expected that your customers will be able to get their purchases within hours of their purchase.

via GIPHY

2. The Internet of Things

Not one, but two different ‘internet fridges’ were offered to the buying public this year that turn your ice box into a smart food centre that allows you to do things like order groceries and browse recipes. Google is monitoring our homes with Nest, Amazon’s Alexa is our home voice-activated personal assistant who will do everything from playing music to suit our mood to ordering toilet paper and beyond.

What’s next? Will our vanities order expired cosmetics? Will our Apple Watches remind us when we are walking by the mall that it is our mother-in-law’s birthday coming up? Will our shoes send a message to our personal shopper that it’s time for a new pair because they’ve worn out?

You may think this is far fetched, but at the pace of technology, it’s not that far off into the future. As everything in our physical world gets connected to the web, more and more opportunities for retailers arise. Have you imagined how your business will take advantage of this?

[credit: http://theverynearfuture.com/post/137280998764/smart-fridge-what-is-this-comic-about-samsung]

3. Personalization

It’s not new or news that customers want to feel like they are more than just a number. For a long time, personalization has been key to improving the experience for the customer as well as increasing sales for the retailer.

There is nothing like coming into your favorite business and being greeted by someone who not only remembers you from your last visit, but can also show you directly to the new products based on their memory of your previous purchases. It saves you time and makes you feel special. It also influences your purchase. According to our recent study, 73 percent of shoppers say sales associates who remember their personal preferences/style impact how much they buy from a retailer.

But it isn’t only in-store where personalization can make a difference, you have the opportunity to do more than just recommend products through algorithm. Tools like Salesfloor allow you to give the same level of personalization online that you give offline. This isn’t a trend that is going to go away. As more and competition appears, personalization is going to become even more important.

4. Virtual and Augmented Reality

Have you ever looked at a chair or table in a showroom and tried to envision how it would look and fit in your house? We have. Back in the day of catalogues, we even cut them out and stood holding the clipping out in front of us to get a better sense. Thankfully as Virtual and Augmented Reality (VR/AR) have evolved over time, we no longer have to carefully cut out pictures, we can just hold our smartphones up to the room, place the furniture piece and -voila!- we can see how it will fit in its surroundings.

For those who don’t know the distinction, Virtual Reality (VR) is the technology that immerses the user into a simulated world, and Augmented Reality (AR) is technology that brings simulated elements into the real world.

In regards to VR, you have probably seen the goggles such as the Oculus Rift, where the person wearing them escapes to a 360 degree fantasy world. Though virtual reality is mostly used in gaming, we are seeing travel companies use it to create simulations of escapes, realtors use it for virtual tours of homes for sale, and car companies use it for virtual test drives. HBR.org gives the example of being able to test a tent remotely.

AR has been around for many years (Converse used it in 2010), however, the rise of Pokemon Go this year has not only brought it into the mainstream, it’s ignited the public’s desire for more applications of the technology. AR is especially attractive because it’s so simple: anyone with a smartphone can use it. To our example above around furniture, Wayfair, online home goods and furniture marketplace, launched Wayfair View to help customers visualize furniture in their homes (though Ikea did this back in 2013).

[credit: http://gph.is/2bFPCMq created from Lee Jeans ad]

5. Direct to Consumer

Direct to consumer fashion brands have been popping up all over for many years now, but according to Racked, many established designers and brands are also pulling their lines out of department stores and creating their own direct to consumer online and offline boutiques. This move is accelerating now because of several factors:

Number one, designers and brands have grown more direct relationships with their customers through social media. Number two, creating online stores is easier than ever and since more and more customers are shopping online, this has created a great revenue source to help fund (number three) the brick and mortar experience.

Though this could prove tricky for some department stores, others like Saks Fifth Avenue have embraced the idea of the direct to consumer model, creating shop-in-shops that allow for their brands to create unique branding experiences while enjoying access to the Saks clientele.

[credit: https://www.flickr.com/photos/thomashawk/12241789/]

6. Mobile Payments

Currently, there are only a handful major retailers that offer mobile payments: the Apple Store, Home Depot, Starbucks, Macy’s, Walgreens, Bloomingdales, etc. But we know that this is going to grow a lot in the next few years because of the number of options consumers now have available. According to TechCrunch:

A recent report noted that 39 percent of all mobile users in the U.S. had made a mobile payment in 2015. This is up from 14 percent in 2014 and by my estimations will in the 70 percent range by 2017.

There are three overarching categories of mobile payments:

Near Field Communications (NFC), which you’ll find in Apple Pay, Android Pay, and Samsung Pay, allowing the customer to just tap their phone to a device and authorize the transaction.
Commerce payments, where customers use an app with a stored credit card. Anyone who has checked themselves out at the Apple Store or used the Starbucks App have experienced this.
Mobile Wallets, where customers can store their cards on their phone to scan.

If you haven’t considered offering mobile payments as an option to your customers, it’s probably a good New Year’s resolution to make.

[credit: http://themerkle.com/shake-giving-android-apple-pay-run-for-money/]

7. Enhanced Experiences

As we wrote in our article on the retail renaissance, the retailers who are driving the most profit per square foot in their stores are those who are prioritizing experience over sales. Though it seems like a contradiction to get more sales from de-prioritizing sales, this is what appears to be a factor contributing to the enormous brick and mortar profits of retailers like Apple, Shinola, and Warby Parker, and more established retailers and department stores are taking note.

Bed, Bath and Beyond just announced that they are adding a cafe in their stores and have even applied for a liquor licence. Saks at Brookfield Place in New York offers up an experience they call a Power Lunch, which gives you a beauty treatment, style consultation and lunch – no purchase required. Harry Rosen partnered with Macallan Whisky to create a tasting bar in store.

The more excuses you can give your customers to just ‘drop in and hang out’ with no pressure to buy, the more likely they will buy. And the more often they have these experiences, the more they will start to get used to them. 2017 and beyond we are sure to see a rise in enhanced experiences in retail.

[Credit: Guru Blog covering the Barbershop in Frank & Oak’s Montreal retail location]

When it comes to trends, 2017 looks a lot like the next iteration of 2016, which will make things even more exciting for retailers and customers. Now, here’s hoping the trends outside of the retail world don’t continue along the same path as 2016. Have a happy holiday and a prosperous new year!

Retail Personalization in 2017: Exciting Times Ahead

Though the means of shopping may have changed radically, the emotional drivers surrounding it have not.

Think about how shopping is tied to some of our most precious milestones and memories: we spend time crafting lists for weddings; we fight our way across town in traffic to get the last of the latest trendy toys on the shelf for our children; we agonize over the possibility that someone may have beaten us to the perfect birthday present for our best friend; and this holiday season, we will search high and low to get everyone on our list the perfect present.

Buying the right gift for the right person at the right time makes us feel good. It also lets the recipient know that we understand them and what they really enjoy.

This is the heart of why retail personalization is so important. If you’ve ever received a little card or gift from a store that participates in a birthday program, you can understand the allure of a brand that goes that extra bit to make you feel special and like you have more than a transactional relationship with that company.

Retail personalization isn’t one thing. It’s a host of ways that customers and brands can interact to make sure that the needs of the buyer are being listened to and addressed by the brand.

The same reason you can take home samples from your favorite make up store is the reason this is an emerging area for retail: if a customer feels listened and catered to, they are more likely to continue shopping at a store.

Even though it seems that the landscape of shopping is moving full steam ahead to a “post bricks and mortar” approach, many smart companies are investing in personalization and bridging the online to offline experience, borrowing the best things about both to make customers happy, and keep them coming back.

Incredible in-store experiences aren’t just relegated to expensive stores or places where a lot of personal attention is a given (make up stores, lingerie, jewelry). You can have a delightful shopping experience buying plumbing tools at your local hardware store.

Using Personalization to Differentiate Experience

So, what makes a great retail experience, rather than just a good one? Here are a few key differentiators:

Sales associates understanding what makes the customer or the gift recipient tick
Associates teams addressing the needs of the customer and working to any constraints like budget or time
Associates building a relationship and trust with the customer

These elements are important to keep choosy customers, who can always price match from their pajamas at home, in the retail experience and purchasing from a specific retailer and building loyalty instead of just adding something quickly to a shopping cart online.

The future of retail is using digital tools to help augment, not replace, brand experiences.

Personalization Ghosts of Holiday Past

[credit: whateverjames on flickr https://www.flickr.com/photos/whateverjamesinstitches/6536829253/]

Up until recently, the pure e-commerce sector hadn’t really solved the problem of personalization. Targeted email marketing is not a real substitute for personal attention and care when selecting an item, especially if the retailer is sending “Father’s Day” emails to a person who really needs to buy something for someone else.

The best solution that pure e-commerce has built to address the “personal touch” problem is recommendation engines. There are many reasons these don’t come close to the personal attention of a shopping assistant:

An algorithm can’t distinguish between an item you buy for yourself or for another person, leaving you with suggestions which might not be appropriate
For some stores which sell everything under the sun, they can’t distinguish between your purchase of laundry detergent and your purchase of a wedding present by priority
If an item you truly want is sold out, the recommendations can sometimes be very far off the mark
An algorithm can’t glean why you bought a gift, which can be embarrassing or painful to you when you are suggested something you previously purchased.

There are many more reasons why a simple recommendation engine doesn’t work, but they all come back to the same basic issue: there is no human intelligence in the process.

Putting humans into the mix is essential for brands to deliver that personal touch and a feeling on the end of the customer that they are being heard and that they are making the best informed choice.

Price isn’t the only factor when people buy for themselves or others. Sometimes, people are searching for a way to purchase a gift that says more about their relationship with the recipient than just “I had $100 dollars to spend on you, and this sweater seemed nice.”

A great example comes from Saks Fifth Avenue. Saks’ sales team are empowered to reach out to valued clients and send them customized lookbooks in order to keep them interested in shopping with them, but also to build unique relationships with a few sales team members. The deeper the relationship, the more likely a customer is to return and spend money with a particular salesperson, and that particular store.

Sales teams can also answer questions through Salesfloor to ensure that a customer is properly informed and can feel good about the purchase they’re making.

Personalization Ghosts of Holiday Future

What’s next for retail personalization? The more sales teams and customers contribute data, the better predictive systems will work.

Look out for ways to connect with customers during times when they haven’t shopped in a while and enticing them with proactive suggestions related to their own purchasing and their purchasing habits for others, complete with customized visuals and copy that really add a personal touch and help eliminate the agonizing thought process some gifts elicit from customers. This might mean suggesting buying a gift for your mother, whose birthday is in June in March, because the item is in stock and at the right price point, and your sales associate has alerted you to the great deal.

The advantages of this system are obvious for retailers: regular, repeatable sales frequency, even when deep discounts aren’t being offered. Higher overall margins. Increased foot traffic, leading to larger per order spend and increase in word of mouth due to satisfying retail experiences.

While technology won’t replace human sales teams in the next year, it will continue to empower sales teams and customers alike to build strong connections and build brand trust and loyalty, which benefit both brand and customer ultimately.

We look forward to what’s next in 2017.