2020 will not go down as a year to remember for the majority of retailers. With shop doors shuttered, and wariness pervading the country, consumers refrained from spending on non-essentials, prioritizing groceries, and bolstering savings accounts.
According to figures released by the Office for National Statistics in the UK, total retail sales volumes in 2020 dropped by 1.9% when compared with 2019—the largest year-on-year fall since records began.
Certain retailers were hit especially hard; the clothing sector saw a staggering 21.5% annual fall in revenues, with established names such as Topshop, Dorothy Perkins, Miss Selfridge and Victoria’s Secret just some of the brands that suffered in this challenging environment.
Thankfully, recovery is now well underway. While physical footfall is still down—August saw an 18% drop in in-store customers when compared to the same period in 2019—retailers that have embraced online shopping are riding an eCommerce wave. A phenomenon that has seen record sales for many online retailers.
Indeed, data released by Companies House has revealed that, over the last 12 months, the UK’s 20 largest online-only retailers have recorded a record £16.4bn in sales—a colossal 22% year-on-year rise. This growth is partly due to retailers understanding the need for and adequately investing in, digital technologies capable of driving revenues.
It is also worth noting that, in recent months, the trend of ‘revenge shopping’ has played a part.
Though sounding somewhat sinister, revenge shopping is far from it: it is simply a term that refers to consumers who spent cautiously throughout the pandemic, and are now making up for lost time by treating themselves to a bit of retail therapy.
With life having returned to a likeness of normality, and given vaccinations have afforded many millions the confidence to once more enjoy a social life, consumers are choosing to spend their hard-earned cash on clothing and accessories designed to wow. People are reemerging after many months hidden indoors, and they are doing so in style.
LVMH, owner of Louis Vuitton, recently announced significant revenue growth when compared not only to 2020, but also to 2019, while Gucci, Balenciaga, Mulberry, Christian Dior, and Fendi have all performed strongly following the lifting of lockdown restrictions. Revenge shopping seems likely to have been a contributing factor.
For retailers, and especially those that lean towards the high-end, revenge shopping should be regarded as a golden opportunity to reach new audiences, to grow first-party datasets, and to create personalized customer experiences that will engender long-term loyalty.
Consumers that wouldn’t usually think about browsing luxury stores are currently in a position to spend a little more, and as a result, are exploring options that would normally be out of their price range. This presents retailers with the prospect of not only gaining new customers but retaining them.
With all of these new shoppers coming through your brand’s virtual doors, what should you be doing to make the most of their visit? How can you turn someone planning to be a one-time buyer into a loyal, repeat customer?
The first step is capturing their details and building a bank of first-party data. This is central to being able to communicate with them directly and allows retailers to send relevant personalized messages or offers.
Research has found that 80% of consumers want more personalization from the brands they interact with, while 72% say that they will only engage with marketing messages that are custom-made for them. What’s more, 96% of marketers believe that a personalized approach to marketing can play a key role in bolstering and improving customer relationships.
Consumers the brands they interact with to communicate with them – all they ask is that messaging be personally useful. Perhaps contrary to popular belief, people will happily hand over their email address or phone number if they believe they’ll benefit by doing so; a SmarterHQ study found that 90% are willing to share data if it will make their shopping experience cheaper or easier.
For brands to truly deliver enhanced customer experiences, they need to harness the right technologies and must commit wholeheartedly to using them. Gathering consumer data is only part of the process: the rewards only come once brands are able to segment effectively and deliver personalized, one-to-one communications to the right people at the right time.
Getting Consumer Buy-In
More than ever, brands need to foster genuine relationships with their customers, and that will often entail going beyond just offering great products. Retailers need to actually know consumers as individuals and treat them accordingly. Brands and individuals need to be on the same page.
For example, consumers increasingly want the brands they associate with to not only speak to them but speak for them. This is something often neglected when it comes to dictating what personalized communications look like.
Research has found that 70% of consumers prefer to buy sustainable products, 65% want businesses to ‘take a stand’ on issues that they deem important, and 86% would be willing to spend more on a product if it comes from a brand they trust.
One-to-one messages don’t always have to relate to the products themselves – there are numerous paths that can facilitate consumer loyalty. With increased frequency, people want to feel a degree of pride in the brands they associate with, and for retailers, this presents another golden opportunity to appeal directly to consumers.
Savvy retailers should be constantly looking for new opportunities to give consumers content that they will find valuable, and will cement them as advocates. The current revenge shopping trend will not be around for long, but the techniques, approaches and lessons learned can, if well implemented, prove beneficial far into the future.
Looking into how you can capture this new group of shoppers with highly relevant messaging across email and text? Reach out to a rep at Wunderkind today.