The retail landscape has evolved drastically as eCommerce players like Amazon have come on the scene. However, to be competitive, brands and retailers need to differentiate their offerings based on what their unique customers demand. They can learn from Amazon – what’s important is that they don’t try to be Amazon.
Who Wins Where?
Lessons for Digital Brands and Traditional Retailers
No Matter Where They Shop, Customers Want the Same Things
Download the 2020 Consumer Expectations Report
Key findings from the report include:
- Convenience is not optional. 76% of respondents chose fast shipping as a top characteristinc of a positive experience with an online brand, up from 62% in 2019. This shift signals the increased importance of convenience, streamlining and speed to retail customers.
- Traditional retailers win on relationship-building. Both in-store and online, traditional retailers score higher on relationship-building and loyalty, while digitally native brands score better on convenience measures like fast checkout.
- Digitally native brands deliver great in-store experiences. Among customers who have shopped at digitally-native brands’ brick-and-mortar stores, 75% prefer the in-store experience over traditional retailers’ in-store experience.
- Customers expect more sophisticated personalization. When shopping online, 36% of customers expect personalized product recommendations on the website homepage, up from 28% in 2019.
Defining Digital Brands vs Traditional Retailers
Digitally native brands usually focus on a single product or product category — e.g., mattresses for Casper, eyeglasses for Warby Parker, toothbrushes for Quip, etc. — and sell directly to the consumer, instead of through established retailers. While some digitally native retailers my eventually establish brick-and-mortar stores, most primarily sell online or via a mobile app, making fast shipping and a streamlined online experience key to their value proposition.
Traditional retailers are established companies that sell products from multiple brands, like Target, Macy’s and Home Depot. They have instant gratification built into their business models, thanks to their large networks of brick-and-mortar stores. These enable customers to shop in person in their local communities and take home purchases in real time, or make orders for in-store or curbside pickup, without waiting for shipping.