TikTok has seen an exponential growth of users, and increasing interactions between consumers and brands follow naturally. The platform introduced its new social shopping feature, a game changer in eCommerce that has inspired others to follow suit.
But innovation is not something that comes without effort. Where should retailers start?
Upstaging price with experience
With a looming recession, price wars will dominate the retail industry. At the same time, it is challenging to continuously deliver the most competitive prices in the market when brands are struggling with profitability.
At times like this, customer experiences can easily become an afterthought or even neglected entirely. Yet, bad customer experiences are not easily forgotten and remain a threat to any company.
2023 will be the year of disruptive innovations. Retailers need to think outside the box when it comes to introducing new technologies to improve the customer journey. KFC, for example, has tapped into the gaming habits of Britain to create a loyalty scheme that allows consumers to play an arcade cabinet-inspired simple game to earn rewards through their app.
Bending the cost curve
The most challenging step may be bending the cost curve. To circumvent economic pressures, companies must improve efficiencies within operations to cut costs where possible. Retailers need to take an end-to-end view of costs, and using data, understand opportunities to reduce spending.
Simultaneously, they should be mindful that any cuts should not leave the company in a vulnerable position when the market picks back up again. Companies should focus on strategies to maintain their market position while differentiating themselves when the economy begins to recover.
From intelligent fulfilment and order management to in-store and digital collaboration, organisations need to get their houses in order if they expect to overcome this crisis. Brands must focus on reducing costs without letting it negatively impact customer experiences or leave them too vulnerable in the future. Consumers are what keeps retailers in business and long-term planning can make or break the success of a company.
Leveraging artificial intelligence
If prices and profits are the dominating force behind the industry discourse, customer retention is the most cost-effective way of keeping businesses afloat. Existing customers already know the brand and it is more often affordable to nurture their loyalty rather than gaining new ones.
Leveraging Artificial Intelligence (AI), Internet of Things (IoT) and other innovative technologies allow companies to focus on delivering enhanced customer experiences through CRM (Customer Relationship Management). Organisations should use the data from customer purchases to their advantage, by understanding how they work, what they like to shop, when they like to shop, what platforms they most use and why they use them.
A successful strategy we’ve witnessed recently has been collaboration with social platforms. TikTok has seen an exponential growth of users and increasing interactions between consumers and brands follow naturally. The platform introduced its new social shopping feature, a game changer in eCommerce that has inspired others to follow suit.
It’s unscripted and authentic content, and with 54% of younger consumers discovering brands via social media, a great asset for brands to explore and expand on their audiences. Shopify for example, has leveraged TikTok Shopping to enable organic product discovery, helping foster authentic relationships between consumers and retailers.
Going beyond the interface of digital channels
Other brands have found ways to utilise data and analytics to better connect to their customers and better cater to their needs. Nike, for example, has innovated with Nike+, Nike Run Club, and Nike-on-Demand by connecting consumers with customer service experts that provide personalised offerings such as training recommendations, advice, and motivation tailored to everyone’s specific needs and preferences. The company has expanded the way it delivers its messaging, from physical spaces to digital platforms – it goes beyond interfaces, with a focus on connecting shoppers to the brand.
The next steps
Surviving a digital cost-of-living crisis is uncharted territory, and the coming months will be a learning curve for all retailers. For now, brands must tread carefully, and focus on finding the right strategies that best work for them and their customers.