How can phygital retail support the new digital consumer? Throughout the pandemic, the use of digital services rose to record levels, but this dramatic push was influenced by the heavy physical restrictions in place. As restrictions ease in 2021 and digital consumers have the option to switch again – what will happen? Will they stay or will they go? New evidence suggests that consumers will begin to move away from some digital channels with consumers favouring the luxury of talking to a human, avoiding difficult to use digital channels and most importantly, the freedom of going to the store. In this article, we’ll be discussing the new digital consumer and the role phgytial experiences play within eCommerce and brick-and-mortar stores.
What to expect:
- Digital consumer trends
- Digital consumer trends: messaging and personalisation
- Digital consumer trends: privacy
- Digital consumer trends: loyalty
- Why avoid digital channel in favour of physical?
- Phygital experiences – a solution to the digital hesitant consumer
Digital consumer trends: what does the post-pandemic digital consumer look like?
For many of us, the pandemic starved our social lives and in turn digitised our existence to feel connected with the people around us. Work, education, relationships, quizzes, exercise, and shopping were all areas of human activity which saw the digital transformation. However, flash forward to 2021 and sectors are beginning to see the resurgence of personal interactions. While many brick-and-motor and eCommerce stores saw online sales rise, their digital channels’ effectiveness is now brought into question.
The post-pandemic consumer presents a broad spectrum that is hard to conjure into a few sentences. Consumer perception has changed across personalisation, privacy and loyalty. These new consumers are fluid in nature and the stickiness of their preferences seems to be everchanging. For retailers, they too must adapt to how these perceptions are changing and how they can improve their offerings to match the changing consumer demand.
Before we dig in, let’s take an overview of what the digital consumer looks like in 2021.
Messaging and Personalisation
- 90% of consumers will share data with a brand that offers the right value exchange
- 78% say the Covid-19 pandemic has made them realise online shopping is better and easier
- 39% post Covid-19 will continue to buy more through digital channels
Source: Cheetah Digital and Econsultancy
When it comes to messaging and personalisation, the pandemic has emphasised the convenience of online shopping, with over 78% of consumers saying they pandemic made them realise how much easier and better online shopping can be. In addition to that, 39% of post-COVID-19 consumers will continue to use digital channels for online purchases. Although, the method of personalisation is up for debate. As consumers are becoming more self-aware of how their data is handled, they are less convinced to give it up. However, if brands are open and transparent, 90% of consumers will share data if the right value exchange is present.
With the extra traffic coming in, not all are converting which presents the issue at hand. On average, only 12% of those surveyed in a McKinsey study performed more than two different actions. The intent of their visit focused on information, advice or a recommendation. However, if you are in the grocery and apparel sector – 73% of respondents made a purchase.
When it comes to messaging and personalisation – consider the availability of information and how transparent you are about the products you sell. It is no hidden secret that most transactions begin with a thorough online search to seek reviews, comparisons and product descriptions. And while plentiful rely on YouTube and influencer marketing for reviews, it is best to present thorough descriptions across your website to meet various digital touchpoints.
Privacy
- 52% of consumers think product recommendations from cookie tracking is creepy
- 27% of consumers have installed ad blocking software
- 27% increase in consumers who are loyal to a brand that is responsible for their data
- 65% of consumers do not trust social media platforms with their data
Source: Cheetah Digital and Econsultancy
In a previous article, we touched on zero party data and what it means for businesses and the future of ethically collecting data. However, in the case of how it changes the post-pandemic consumer – it encourages businesses to think about how they can holistically collect data without being intrusive and ‘creepy’. For marketing – a key component in personalising online experiences leveraging cookie tracking data to target specific marketing ads. However, 52% of consumers believe product recommendations from cookie tracking is “creepy” with 27% of consumers installing adblocking software. How a business leverages its data has a dramatic impact on consumer trust. 44% of consumers say they do not fully trust digital services with personal data being placed a top priority. Nevertheless, brands see roughly a 27% increase in consumers when they are data-responsible and place customer’s privacy at the core of business objectives.
Loyalty
- 62% of consumers are prepared to pay more from a trusted brand
- 24% of consumers are not loyal to a brand because the brand did nothing to encourage their loyalty (frequent shoppers)
- 8% decrease in consumers expecting a discount in return for loyalty
Source: Cheetah Digital and Econsultancy
It is no surprise that 62% of consumers are willing to spend more from a trusted brand. But brands must look beyond offering discounts to win their loyal customers, those who did actually saw an 8% decrease in customers. What this means is brands must truly understand customer needs to curate loyalty incentives that will entice them to stay. For now, the one-size-fits-all is not enough to win customers over. And with personalisation, privacy at the core of what influences consumers intentions – it is important for businesses to make key strategic decisions on this ethos.
What is turning some consumers away from digital channels?
Whilst the digital consumer is certainly booming through post-pandemic times, they also have good reason to switch back to physical channels across a number of industries. First of all, the question to answer is what are the main reasons for digital channels? In the McKinsey survey, 45% of respondents answered COVID-19 pandemic was a key driver in switching their channels. Whereas 43% of respondents answered digital channels provided greater convenience and availability.
Those moving away from digital channels conveyed difficulty in navigating digital UX/UI and a lack of information regarding products and services. 56% of dissatisfied users expressed difficulty in digital UX/UI in addition to lack of product information. This is especially true for high-ticket or high consideration items where a live agent is preferred to navigate the consumer through the purchasing journey.
Among that 56% who are dissatisfied with the user experience, respondents commented on poor accessibility for the older demographic and the many barriers they encounter when using apps. The key area consumers want businesses to focus on is delivering a user-friendly and stable solution with consideration for reducing barriers to complete the action.
Phygital experiences and live video shopping – a solution to the digital hesitant user
Today’s digital consumer enjoys a frictionless experience that delivers on personalisation, protecting private data and the freedom of speaking with a live agent. Whilst chatbots can be a good alternative to alleviate common queries many are disgruntled at the complex journey to speak with a human being. To attain strong brand-customer loyalty, businesses should look at how they can directly form these close relationships to keep customers interested and display a high level of trust with brand value to ensure they are willing to engage. We have covered a number of phygital experiences in our guide to phygital including AR, virtual stores and click and collect. However, in the case of matching the changing digital consumer, live video shopping software can enhance an eCommerce website.
By leveraging live video shopping in your sales channel addresses the key pain points that eCommerce sites encounter. Enhance user experiences, replicate in-store interactions, and reduces barriers to purchase (due to the absence of downloading an app to initiate the call). Aligning phygital solutions with your business objectives can help address core factors including:
- Personalisation
- Reduce friction
- Build trust
Personalisation
The digital consumer demands personalisation but agrees that retargeting ads using cookie tracking is “creepy”. To overcome this dilemma, businesses are humanising the online shopping sales channel. By adding live video shopping experiences the expert can personalise the call to the customer. This VIP service enables digital dialogue where the consumer can consciously give information to which the expert can then use to curate the basket.
Reduce friction
Live video shopping technology can be implemented using headless commerce, meaning the frontend is decoupled from the backend, allowing greater user experience customisation. The live video call is an app-less experience and does not require the customer to download any software technology to commence the call. This allows for greater accessibility and breaking down barriers to ensure the customer (and expert) can navigate the platform with control. Confer With enables experts and customers to share products, product descriptions, imagery and more meaning they are on the same page throughout. The customer can also rely on the expert to help navigate them through the buy flow.
Build trust
the 44% that do not trust brands with their data proposes a big problem. More are opting out of cookie tracking and the ambiguity surrounding data grows larger every day. On the other hand, live video shopping enables a collaborative approach to online shopping. The expert and customer can collectively identify the needs which in turn influences the direction of the call. Inside the video call experience, the customer would have the option to remove items from the basket, meaning they will never feel pressured. Additionally, Confer With matching algorithm uses geographical tracking and can localise the call experience. Meaning before entering the local store, a relationship has already begun with the local sales assistant. This means if the customer chooses not to complete the transaction over the fear of fraud – they can transfer their digital conversion into the physical space. Highlighting the potential phygital experiences has.
Going back to the three I’s, this is how live video shopping fairs up against the phygital experiences.
Immediacy: a virtual assistant can be connected immediately and if no one is available the customer can schedule an appointment that suits them best.
Immersion: live video shopping immerses the shopper through shoppable products and live demonstrations which evokes storytelling that once before was not possible on a standard eCommerce store.
Interaction: one to one live video shopping creates an effective digital dialogue between the customer and brand. Closely replicating in-store experiences creates an environment where retail associates can identify needs, curate a tailored basket, and build meaningful customer relationships.
Final words on phygital retail
As lockdown eases and social distancing become less legal requirements, digital channels are beginning to lose consumers to physical again. Whilst this bounceback was expected to happen – it gives businesses a chance to truly understand what makes a great digital journey. From understanding how to personalise without being creepy, to creating an environment without barriers and easy to use. In turn, phygital experiences with live video shopping can help address the demand in delivering highly personable experiences online whilst replicating the luxury of physical channels.
