With more traditional stores closing, retailers continue to be challenged by navigating the intersection of brick-and-mortar locations and eCommerce. Fullmoon Digital's Nik Stepheny shares how brands can best manage this evolution, as well as the crucial role experiential experiences will play in shaping consumer engagement moving forward.
WINDERMERE, Fla., May 7, 2024 /PRNewswire-PRWeb/ -- As retail giants grapple with closures, the landscape of commerce is undergoing a seismic shift. Last year, more than 4,600 stores closed due to bankruptcy, underperformance, or rising issues with theft. (1) Dollar Tree, which includes Family Dollar, is slated to close approximately 1,000 stores in 2024. Starting in 2023 and extending into 2024, Best Buy is closing between 30 and 40 stores. Walgreens announced the closure of about 150 stores before the end of 2024. (2) Yet, amidst this transition, a vital narrative emerges: the fusion of physical and digital experiences. "Retailers are at the mercy of changes in people's shopping behavior, as well as culture relevancy," explains Nik Stephney, Associate Director of Strategy & Content at Fullmoon Digital. "The conversation moves so fast today that brands must provide an experience to people or they will not be remembered, which is why brand storytelling is essential."
Impact of Physical Store Closures and Rise of E-commerce
The closure of physical stores has significantly influenced the retail landscape, with e-commerce experiencing a surge in popularity. This shift has prompted retailers to adapt their strategies to cater to the growing online consumer base. Additionally, the preferences and behaviors of Gen Z consumers are shaping the e-commerce landscape, influencing how brands engage with this demographic. "Gen Z does not go to the mall," Stephney says. "They do online shopping—a boutique they saw on Instagram or Amazon, leaving many more traditional brick-and-mortar stores at the mercy of a change in behavior shopping behavior."
Despite this, brick-and-mortar stores shouldn't be discounted entirely. The Economist Intelligence Unit is predicting that brick-and-mortar sales will make up an astounding 85% of total retail sales in 2024. (3) The reason for this is the urge, post-pandemic, consumers have for shopping in person, which is leading to the rise of "phygital" stores, which encompasses integrating physical and digital channels in creating integrated experiences. (4) The reality is that physical locations seem to offer a boost to online shopping, with research revealing that introducing a new brick-and-mortar store can lead to a 29% increase in online sales within the same area. (4)
Importance of Experiential Marketing
Enter the era of experiential retail, where consumer engagement transcends transactional encounters. From immersive pop-ups to interactive displays, brands redefine the shopping journey. Fostering memorable experiences becomes paramount to driving customer loyalty and brand affinity. "For e-commerce, every single touch point with the consumer is an opportunity to offer an experience," Stepheny explains. "For everything sent out, there's an opportunity to make that more beautiful. There's an opportunity to add more conversation to it instead of just making it a transactional email." This type of brand storytelling can also include pop-ups and other brand activations.
From browsing to checkout, every interaction with the customer is an opportunity to offer a unique experience and build brand loyalty. This includes brand storytelling, physical brand activations, and enhancing every touchpoint with the consumer to create a meaningful connection.
For instance, Nordstrom's New York flagship store recently collaborated with Disney to celebrate the Wonder of Disney's 100th Anniversary. Multiple immersive, interactive experiences were offered to shoppers, including a five-segment LED wall with elements inspired by Disney princesses and touchscreen coloring books. (5) Creating memorable experiences like these is crucial for both brick-and-mortar and online stores.
Digital Platform Risks and Challenges
Relying solely on digital platforms for business comes with inherent risks, including vulnerability to algorithm changes, market saturation, and evolving consumer behavior. "If Instagram or Facebook decides to change their algorithm and that tanks your sales, you have to invest more money to get back up to where you were," Stepheny explains. If companies can't, it becomes a pay to play game where the social media companies are simply trying to extract more and more money from the retailer.-
Moreover, the cybersecurity risks associated with online shopping, such as fraudulent activities and data breaches, pose significant challenges for online companies. Businesses must stay vigilant and proactive in addressing these risks to maintain consumer trust and safeguard their operations.
- Algorithm Changes: Digital platforms like social media and search engines frequently update their algorithms, impacting businesses' visibility and reach. Changes in algorithms can suddenly decrease organic reach or change how content is prioritized, affecting marketing strategies and sales.
- Market Saturation: The online marketplace is highly competitive, with numerous businesses vying for consumers' attention. Market saturation can make it challenging for companies to differentiate themselves and attract customers, leading to increased marketing costs and reduced profitability.
- Evolving Consumer Behavior: Consumer preferences and behaviors constantly evolve, influenced by technology, societal trends, and economic conditions. Businesses must continually adapt their strategies to meet changing consumer needs and expectations, which requires flexibility and agility.
- Cybersecurity Risks: Online businesses are vulnerable to cybersecurity threats like data breaches, phishing attacks, and payment fraud. Cyberattacks can result in financial losses, damage to reputation, and loss of customer trust. Protecting sensitive customer data and maintaining robust cybersecurity measures are essential for safeguarding operations and preserving consumer trust.
To mitigate these risks and challenges, businesses should diversify their marketing channels, build a strong brand presence, stay adaptable, and prioritize cybersecurity.
Enhancing Customer Experience for E-commerce Success
Creating a memorable and unique customer experience is essential for e-commerce businesses to stand out in a competitive market. From browsing to checkout, every interaction with a customer presents an opportunity to deliver a personalized and satisfying experience. The checkout process plays a crucial role in building trust and loyalty with customers. By prioritizing customer reviews and promptly addressing any issues or concerns, businesses can differentiate themselves and foster long-term customer relationships.
In response to this shifting landscape, Fullmoon Digital's overall marketing and eCommerce solution for brick-and-mortar and online stores provides a comprehensive suite of services to empowers brands to thrive in the digital age while preserving the essence of traditional retail. "By seamlessly integrating online platforms with experiential initiatives, we redefine the retail narrative," Stepheny adds.
To succeed in the current retail landscape, businesses need to adapt to the shift toward e-commerce by prioritizing the creation of memorable experiences. Additionally, they must address cybersecurity concerns and optimize the checkout process to build customer trust and loyalty.
"Offering a way to show people that they're more than just a credit card, more than just a transaction is essential," Stepheny says. "Retailers need to let consumers know that they see them as humans."
About Fullmoon Digital
Fullmoon Digital Media, founded by Derek Chew, a former early Yahoo! employee, is one of the few 100% independent digital marketing agencies in the United States. The firm is cross-functional, with deep experience in media planning and buying, digital consultancy, SEO, digital strategy, programmatic, analytics, performance marketing, paid media, social advertising, and creative. They push the envelope of what is possible in terms of marketing and technology, all the while providing best-in-class digital marketing service to their "pack" of clients. Picky? Yes. And proud of it. They partner with clients passionate about working together to deliver and facilitate strategies that win. For more information, please visit http://www.fullmoondigital.com.
References:
1. Gibson, Kate; "Retailers shuttered 4,600 stores this year. Here are the stores that disappeared."; CBS News; 29 December 2023; http://www.cbsnews.com/news/retailers-closed-4600-stores-chains-with-the-most-closures/.
2. Kissell, Chris and Karla Bowsher; "7 Retailers That Are Closing a Bunch of Stores in 2024"; MoneyTalksNews; 19 March 2024; http://www.moneytalksnews.com/slideshows/retailers-that-are-closing-stores/.
3. "Consumer goods and retail outlook 2024"; Accessed 18 April 2024; http://www.eiu.com/n/campaigns/consumer-in-2024.
4. "The Rise of Phygital Stores: 7 Ways Brick-and-Mortar is Changing"; MJV; 7 February 2024; http://www.mjvinnovation.com/blog/the-rise-of-phygital-stores-7-ways-brick-and-mortar-is-changing/.
5. "Nordstrom Celebrates the Wonder of Disney's 100th Anniversary"; Nordstrom; Accessed 18 April 2024; nordstrom.gcs-web.com/news-releases/news-release-details/nordstrom-celebrates-wonder-disneys-100th-anniversary.
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