Wednesday, March 24, 2021

5 Problems Your Brand Will Face in 2021 (And How to Avoid Them)

Phillip Jackson, Chief Commerce Officer
Strategy / Innovation

If consumers were not familiar with digital commerce before the pandemic, they certainly are now: The decline of in-store shopping has led to a rise in online purchases and the proliferation of e-commerce platforms. As a result, we have witnessed companies beginning to scrutanize their digital experiences and syphon funds towards that effort.

But through our research and recent work with top brands, we must preach caution—budgets are tight, and you can’t afford any mistakes.

Avoid hiccups by checking out our list of the top five problems your brand will face in 2021, including steps to address them before they derail your customer experiences.

1. The return to in-store shopping

Maintaining a digital presence has become a minimum during the pandemic, as in-store shopping was largely put on hiatus. And it is becoming clear that these changes are here to stay: According to an October report from the United Nations, 53 percent of those surveyed plan to continue their COVID-driven habits after the pandemic.

But that’s not to say that consumers aren’t ready to shop in-store as well: Expect to see many returning throughout the rest of the year.

Businesses have a tremendous opportunity in this digital commerce landscape. While the cost of acquisition is high, retailers are able to mitigate much of that amount by investing in wholesale, retail and other omnichannel areas of focus. A dollar here saves hundreds down the line.

The first step Rightpoint would take in addressing this situation would be to sync the online and in-store shopping experiences so that no matter how customers interact with you, they are part of a concerted effort to secure and retain business. Your customers’ expectations and preferences are changing. Does your existing ecommerce solution allow you to keep up with their demands and channels? A strong CX + commerce strategy will help you understand your customer acquisition channels, guiding them between the channels that are best suited to meet their needs.

2. Every interaction is digital now

Even in-person interactions do so under a “digital veneer”—the ability for customers to identify products online to pick up in-store, or an internal system for tracking orders, guide each interaction.

This presents many benefits in perfecting the customer journey over time. Because customers are alternating between online and offline, any data collected paints a more complete picture of what your customer journey looks like, and the digital aspect means you can really drill down to what makes these customers tick. Gathering first party data allows you to segment your customers and market more effectively, drive loyalty and lower your cost for customer acquisition. 

But the real hurdle is that customers have been conditioned by the “Prime Effect,” or the fact that Amazon makes it super easy to not only order but receive your items quickly, and most often free. It’s nearly impossible for any other company to keep up with its own e-commerce offerings or interface, which have all begun to resemble one another.

This is where Rightpoint would recommend evolving your experiences to seamlessly extend your offline business into the online worldWe recently found success with this strategy when working with Cost Plus World Market on presenting a robust, remote holiday shopping experience in the middle of a pandemic. The resulting digital product was engaging and full of holiday cheer, and the experience garnered customer praise across social media.

3. Experiential spending is evolving

The pandemic drove customers inside and ceased many planned in-person experiences. As a result, spending on digital goods increased in 2020 to more than $860 billion—a 44 percent increase over 2019—according to Digital Commerce 360, and spending went up on home items for the kitchen, bedroom and bathroom. Much of this remains in flux, as those starved for travel might resume spending soon, redirecting disposable income away from domestic spending. Higher unemployment numbers have also had a big impact on spending as they are prioritizing essentials.

Take comfort in the fact that there are still plenty of pandemic-proof categories that will continue to grow regardless of how this shakes out. Other than home, these include beauty, fitness, health and wellness. At the same time, digital goods, services and subscriptions are grabbing a larger share of the wallet.

Our process is guided by alatest research report “New Essentials” details areas that consumers are prioritizing, with the goal of defining a new psychographic, “The Life Changers,” that brands can use to understand how consumers are making product and service decisions. 

Consumer perceptions of importance, priority, and essentiality have been redefined. Brands that respond to the shift in consumer sensibilities will be poised to earn their loyalty. We help clients simplify and modernize their complex legacy platforms to improve their ability to adapt to changing customer needs and deliver a unified, modern customer experience that increases conversions and brand loyalty.

4. The Privacy Wars rage

Facebook, Apple and Google are embroiled in a war over the future of privacy. Apple is in the process of changing the default privacy settings in iOS so consumers have more control over what they are sharing, and don’t have to go through the extra step of opting out. Google has wandered into the fray, committing to changing its defaults for third-party cookie web tracking.

The fallout is apparent — retailers are already seeing noticeable effects on revenue. Advertising networks are already seeing fallout, causing attribution issues for marketers looking to track ROI and spending. They are no longer able to precisely target consumers and collect the kind of data that would inform future efforts. Without those analytics to guide their efforts, they are pulling ads and, ultimately, dollars from these social media networks.

Consumers, though, are thrilled at these changes. No longer will intrusive, creepy ads appear for products they had just purchased or recently visited their website.

Our work is specifically targeted to appease consumers while maintaining privacy. The Rightpoint Commerce Strategic Engagement Group (SEG) can help determine your digital maturity, define a road map for growth and balance investments in e-commerce. They collect relevant data points that focus on customer retention, then define key indicators, like Lifetime Value (LTV), to help brands effectively manage their spend. The goal is to ensure no dollar is wasted.

5. Social commerce will explode in 2021

Due to shifting consumer behavior, the number of channels that brands and retailers must focus on is growing larger every day. There’s no telling precisely when a consumer will be making a purchase decision, so brands are enabling consumers to make frictionless, “impulse-driven” purchases wherever they are.

Social media networks have become marketplaces worthy of investment, though the ideal amount remains unknown for the moment; the corresponding metrics and analytics remain opaque. As a result, companies are hedging investments—particularly given the changes to privacy outlined above and the potential of facing a Lower Average Order Value (AOV).

Once again, our SEG division can guide this process. Its maturity model, BULLSEYE, guides brands in understanding the value of their social media as an organic tool for acquisition. Our insights-driven analytical offerings present all the relevant data in one place to better guide which channels are worth the investment.

Get in touch with Rightpoint to learn more about how we can help maximize your channel investments in this new e-commerce environment.