3 Key Trends in Retail and Brand Innovation
Brands and the retail industry are undergoing a rapid transformation. As technology and customer expectations continue to evolve, businesses must innovate to stay competitive and provide a better consumer and user experience. From improved analytics and data-driven decision-making to virtual reality experiences, retailers are exploring different ways to engage customers with their products and services. Consumers now expect more than just the traditional experience; they want convenience, personalization, and an engaging environment that provides them with an enjoyable journey from start to finish.
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1) Retail Media
Changes in customer privacy regulations, notably driven by the disappearance of third-party cookies, have pushed brands to reconsider their use of first-party data. This is the information a company owns and collects directly from its customers, prospects, and users through any channel. Contrary to third-party data, first-party data comes from its own channels and provides insights with consent from customers, who seek personalized interactions, but with a certain degree of privacy. This new format allows merchants to build trusted and enduring relationships, which ultimately manifest in a company’s bottom line.
The collection and understanding of customer first-party data is key in delivering these experiences - even more considering the decrease in availability of third-party data. Retail Media Networks, or RMNs, are a rich source of first-party data to supercharge personalization and loyalty campaigns.
Therefore, the benefits of retail media are two-fold:
- They represent a huge opportunity for retailers and marketplaces to monetize their e-commerce in order to generate additional revenue streams - and very profitable ones. Retail giants such as Amazon and Walmart pioneered this space, with the former receiving 68% of its revenue from its advertising platform
- Advertisers can offer personalized promotions and offers to their clients and keep better track of their ad performance, thanks to closed-loop measuring capabilities. Offering engaging and high-quality content builds credibility with users and increases the likelihood that they proactively share additional data for better experiences (i.e., zero-party data). RMNs are also strong in allowing retailers to offer a seamless omnichannel experience, as retailers can personalize the customer journey, while simultaneously collecting first-party data, in both brick and mortar stores as well as their e-commerce
Startups focused on retail media
- Crealytics supports leading international e-commerce companies to drive performance in product advertising and paid search
- ID5 is a centralised ID synchronisation service. ID5 matches user IDs between publishers, data providers and adtech platforms to enable fast, easy and efficient transfer of user-level data along the advertising value chain
- NumberEight is a category leader in mobile contextual intelligence. They give new life to untapped first-party data, thus empowering app developers, ad partners and advertisers to connect with their users in a relevant, impactful and private way
2) Hyper Personalization
Hyper personalization allows companies to tailor their marketing to individual customers, delivering highly contextualized communications in the right place at the right time. These targeting experiences are achieved through data, analytics, AI and automation. Traditionally, companies have integrated customer segmentation in their marketing strategy to convey personalized communications and offers. AI-powered hyper personalization goes beyond the classification of customer groups, but rather dives into deeper detail by delivering individually-tailored marketing, going beyond basic customer information, pulling from real-time and behavioral data to deliver highly relevant, individualized messages. The results of this strategy manifest in higher levels of customer satisfaction, customer basket size, return on advertising spend, or ROAS, and brand loyalty.
At the end of the day, hyper personalization is all about turning customers into repeat customers. To fully exploit its potential, companies should be able to link, aggregate and classify customer interaction data from different channels. From an omnichannel perspective, relevant website content can work as an instrument to increase pre-visit awareness and potentially maximize in-store conversions. Through this approach, brands can personalize their cross-channel experience so consumers feel a direct communication along the entire purchase journey. According to McKinsey, omnichannel personalization of the customer experience can generate a 5 to 15% revenue increase across the entire customer base. Some of the most relevant channels are e-commerce recommendation engines, dynamic pricing and offers, real-time product notification, loyalty programs and re- engagement
Startups focused on hyper personalization
- RevLifter personalizes deals for retailers across any marketing channel. The platform uses AI to understand real-time signals from users’ onsite behavior to deliver the right deal to the right customer at the right time, to achieve the advertiser’s goals
- ZeotapGmbH is the global data and identity platform that offers a deterministic end to end solution to onboard, understand and activate first party customer data across Europe, North America, LATAM and India
- Knexus is a platform that automatically makes UGC, influencer and brand-owned content personalized and shoppable, integrating it into buying journeys which inspires confidence to buy
- Chata.ai builds an API-first solution that empowers non-technical business users with easy-to-use self-service analytics. Through dynamic translation of natural language into database query language, users receive instant data responses, empowering them to make informed data-driven decisions
- Bloomreach is a leading commerce experience cloud. Bloomreach creates powerful content, customer engagement, and product discovery offerings to achieve true personalization and drive unparalleled business growth
- Skeep is an e-commerce platform that automatically converts the shopping journey to be guided and interactive, leading the consumers to accurate product recommendations. They create personalized branded interactive shopping experiences and collect zero-party data that is converted into personalized journeys
3) Customer Loyalty and Retention
Customer loyalty and retention refer to the ongoing relationship between a business and an individual customer, and are demonstrated by repeat purchases and high engagement through a variety of channels. In an ever more competitive market, it's becoming increasingly difficult for brands and retailers to retain customers. Indeed, the free market economy has created an abundance of choice, making it very straightforward for people to compare brands’ product features, prices, and overall value propositions, and thus switch to the rationally “better” choice. In addition, increased transparency thanks to digitization allows customers to gain information on the brand’s reputation, sustainability and social responsibility strategies, all of which have a tremendous impact on retention.
High retention is directly correlated to revenue growth. Loyalty programs are some of the best ways to reward customers’ purchases and build loyalty. Brands and retailers are in the position of choosing the right program for the right purpose and must equip themselves with the tools to unleash them at a large scale.
Startups focused on customer loyalty and retention
- Kanjiio enables brands and creators to leverage their creativity and grow their community through NFTs. Kanji is the no-code platform to create any branded NFT experience
- Ubu is a Community Data Platform, or CDP, that allows brands to achieve community-led growth by activating its follower base. It enables brands to leverage their following on social media to generate revenues and generate UGC
- Playable (formerly Leadfamly) is Europe's leading gamification platform that empowers ambitious marketers to get, keep and grow more customers. Playable is a subscription-based gamification solution
- Poly Cashback democratizes access to bitcoin as a way to save on purchases made by the user. They believe that today's reward is tomorrow's purchase. With each purchase in their partner stores, customers receive a reward in crypto deposited to their wallet
The startups mentioned in this article are all part of Plug and Play's vast ecosystem of 50,000+ startups. To learn more about our Brand and Retail program along with our startups visitour page.