By: Jaime Gómez, Strategy Director, OMG Chile
It is no longer a tendency, but a reality—technology has changed how people make purchases. From groceries to durable goods like televisions or even cars, technology has made the options to choose from multiply exponentially. Consumers are interacting with brands through both digital and physical channels, between which there exists fewer and fewer differences. This scenario is driven by the positive expansion of internet access in Latin America which continues to grow, today reaching 60% of the population.
Yes! We are talking about an Omni-channel consumer-brand relationship.
In this context, the challenge for brands becomes even more difficult, specifically when taking the economic slowdown affecting our region into primary consideration. According to ECLAC Latin America, this slowdown will grow by 1.5% in 2017. Therefore, consumer resources will be limited, making the decision of where to make purchases more rational than ever.
This is why the value proposition must go beyond just a good offer. Many publications speak of three vectors which will guide the success of retailers: Ubiquity, Speed and Personalization.
If we take personalization as the primary point of entry, we see that retailers know increasingly more information about their customers. Not only do they know what their previous purchases were, they know what path they took to checkout, how they arrived (links, remarketing, SEO, etc.), what they put in their cart and then discarded, with what frequency they buy each product, which promotions they respond to…the processing of this data allows retailers to create a personalized store for each customer, with a measured discount on products, and personalized promotions and pricing policies.
In this sense, loyalty programs are a bridge to reach these “shoppers.” According to a study conducted by Nielsen in Latin America, 82% of consumers say they would be more likely to choose a retailer if they offer a loyalty program, highlighting Perú and Mexico with percentages over 90%.
However, only 46% of retailers offer some type of loyalty program to their customers. The majority offer points in exchange for prizes or money, or some choose a value-added differential such as discount coupons, events, etc.
Retailers should be omnipresent and look beyond simple contact—they should aim for a shoppable experience. Brands should take advantage of all the contact points available, both on and offline, as an opportunity to make a sale. Tesco did it in 2011 by putting virtual gondolas in metro stations.
Mobile and social platforms will be viewed not only as vehicles for inspiration and aspiration, but as mechanisms to participate, improve and reward loyalty and purchases. Social content can offer additional benefits and sales opportunities. For example, inciting consumers to engage with content by promising access to more offers.
Finally, speed will play a fundamental role in this relationship. Speed affects consumption patterns, which are lapsing more and more quickly, causing purchasing processes to be more dynamic. Today I buy things at the mall, tomorrow I buy them from my smartphone. Brands that first detect customer needs and oncoming tendencies, and are capable of taking these to their points of sale beforehand, are the ones that are leading the different markets.
By way of this small analysis, we see that today, brands are serving their customers 24 hours a day, seven days a week, and are therefore, more than ever, called to strengthen their value proposition to build a bond that delivers fidelity, which will ultimately result in a sale.