The Evolving Customer Journey - WWD
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2022 AND BEYOND:
The Evolving
Customer Journey
Forced to transform by a global pandemic, merchants
and brands are responding to changes in consumer
preferences by innovating with technology,
making meaningful connections to consumers and
elevating the entire retail shopping experience.
Sponsored by
Introduction
Traditional
retailing has
been rede-
fined by the
consumer. And
there are new
rules required
to win.
F
or merchants, 2021 is a year of tran- help: new research from American Express’s This report
was authored
sition and transformation. As vaccines Amex Trendex: Pent-up Purchase survey
by Arthur
roll out and consumers seek normality, reveals more shoppers are planning to spend Zaczkiewicz,
retailers and brands face a new set of the same or more on apparel this fall season. Executive Editor
consumer demands. Traditional merchandis- In this special Business Insights Report, at WWD, with
contributions
ing approaches no longer work as shoppers WWD editors and reporters culled insights from Tracey
reimagine their customer journey regarding from leading retailers and industry experts as Meyer and Alex-
how, where and why they shop. well as from the retail industry specialists at andra Pastore,
It is complicated, and there’s no one-size American Express. What did we learn? Well, Strategic Content
Editors at WWD.
fits all retail strategy to employ. The cus- traditional ways of doing business no longer This paper
tomer is the channel now, and merchants work, and to succeed, brands and merchants is sponsored
need a new game plan that considers all need to leverage data, offer greater personal- by American
Express.
aspects of the shopping experience — includ- ization, foster a deeper and more emotional
ing consumer demand for more sustainable and human connection to shoppers, and put
products and services as well as for support- in place extensive ESG and DE&I practices
ing brands that have a purpose. across the entire value chain.
For fashion apparel retailers and brands, But most of all, retailers and brands
this upcoming holiday shopping season will need to deliver an integrated omnichannel
test their merchandising strategies and omni- experience across all the touchpoints of
channel capabilities in this new retail environ- today’s complicated and intertwined cus-
ment. But there’s a tailwind that will likely tomer shopping journey.
2 |
Analysis
L
ooking back over the past 18 months, there new shopping habits and expectations are here to
was an inflection point when everything stay in a post-pandemic world.” Orschell cited EY’s
seemed to have changed in retail. It was the Future Consumer Index (FCI) that has been tracking
moment in the second quarter of 2020 when changes in consumer behavior since the beginning of
the percent of e-commerce sales to total retail the pandemic, “and has found that some shifts, like
sales sharply jumped from 12 to 15 percent, according shopping online and at-home consumption, may not
to data from the U.S. Census Bureau [1]. The short- dissipate anytime soon. In fact, according to the most
term impact was clear as the gain in online sales recent FCI, 80 percent of consumers have changed
buoyed many retail P&L statements, and, in some the way they shop.”
cases, offset sagging sales at physical stores — many of “Most importantly, we’re seeing many shopping
which had temporarily closed doors during the peak and distribution channels begin to blur and finding
pandemic period [2]. that many retailers focused on the new definition of
The expansion of online sales and its share of convenience,” Orschell explained. “For example,
total retail sales also revealed vulnerabilities among consumers may expect to shop online and pick up
merchants who had not been keeping up to speed in store, engage directly with social shopping apps,
with the digitalization of their value chains as well or have products delivered to their doorstep within
as meeting new and evolving consumer demands. a few hours of purchase.”
What occurred in 2020 was a re-setting of the retail
market. Due to lockdowns, concerns over safety
and a shift in personal priorities, consumers had
repaved the traditional shopping journey — and it
Due to lockdowns,
was done in a way that also revealed the strength
and resiliency of the American consumer.
concerns over
Bill Thorne, Senior Vice President of
Communications & Public Affairs at the National
safety, and a shift
Retail Federation (NRF), noted that in 2020, “despite
the pandemic, Americans spent more than $6 trillion in personal priorities,
in the retail industry. It was a record year that
contributed almost $4 trillion to our nation’s GDP.” consumers have
Currently, with media headlines warning of
the economic impact of a spreading COVID-19
variant, consumers are cautious, but are still
repaved the
expected to spend.
“During lockdowns last spring, we saw
traditional
dramatic changes in consumer preferences —
toward all things home and health related, and
shopping journey.
toward online shopping,” Thorne told WWD.
“Consumers are returning to their pre-pandemic
activity even amid the Delta variant. Retail sectors Orschell said the new customer journey often
that struggled in 2020 – such as clothing stores begins with a purchase in one channel and is then
and furniture – are bouncing back. E-commerce completed in another channel. “Retailers need to take
has leveled off to pre-pandemic levels as consumers these new purchasing behaviors into account — and
have become more comfortable shopping in person. consider all types of consumers — from those who
As a result, Thorne said although the NRF may prefer the safety and comfort of online to those
expects to see a shift to spending on services as that are craving brick and mortar experiences.”
more of the economy reopened in 2021, “retail Indeed, merchants are removing “the friction
sales have grown year-over-year every month since from all touchpoints,” Orschell said, noting that it
June 2020. In fact, NRF upwardly revised its includes offering contactless checkout and payments
annual retail sales forecast to grow between 10.5 as well as deploying seamless integration with
percent and 13.5 percent in 2021.” all digital channels (including social media). But
are they moving fast enough? According to Steve
Dennis, author, speaker and retail industry advisory,
Changes, here to stay? the pandemic “has collapsed the timelines for
Jeff Orschell, Consumer Retail Leader at EY of the transformation dramatically.” Dennis also reiterated
Americas, told WWD that consumer behaviors and the central theme of his books and presentations that
trends “are evolving quickly and many of consumers’ the customer is now the channel [3].
3 |
Analysis
David Goubert, President and Chief Customer to come.” There are also other factors that continue
Officer for Neiman Marcus, agreed. “The customer to influence and evolve the customer journey.
has indeed become the main focal point for retailers,” For its part, luxury retailer Saks is seeing an
he told WWD. “We have shifted our approach from uptick in customers who want a more elevated
being a ’channel first’ organization to a ‘customer- shopping experience. Emily Essner, Chief Marketing
centric’ one, striving to meet consumers wherever they Officer for Saks, said consumers “expect a seamless
are along their luxury journey.” And key to the storied online experience tailored to their needs. They want
luxury retailer’s success is data and personalization. to see a product now and be able to buy it with
Goubert said Neiman Marcus has made ease and with a variety of shipping and payment
significant investments “in analytical capabilities options. Customers also expect personalized
to ensure we have data to support our business communication and new and exciting products
decisions. We leverage our shopping insights and delivered to their inbox.”
data to support our buying choices and are focused Essner also noted shoppers are increasingly
on the true luxury shopper. Whether our clients turning to social media and platforms that include
choose to connect with us by app, online, or in-store, video and podcasts. For 2022, Essner expects
it is up to our organization and associates to create the strength of e-commerce to continue. “We are
an integrated retail experience and offer the services, experiencing strong online performance, driven by
experiences, and products they are looking for.” ongoing trends of increased site traffic and new
Shopping has also evolved in other ways. Antony customer counts,” the CMO told WWD. “We are
Karabus, Chief Executive Officer of HRC Advisory, seeing new and existing customers engage and
told WWD that consumers are more prepared, doing spend through affiliate marketing and enhanced
“more research online and having increased the email product recommendations for a more
proportion of their shopping to digital from stores personalized shopping experience. At the same time,
since the start of the pandemic.” while a separate business, we’ve also seen strong
“To the extent that they have now returned performance across Saks Fifth Avenue’s stores. We
to shopping in person, the trip is more intentional expect to see sales continue to grow online in 2022
and focused versus the typical browse,” Karabus by delivering a shopping experience that is as easy
said. “At this point browsing is less of an intent and as it is exciting, meeting our customers when and
likely that will continue for some time. We have seen where they want to shop with us -- whether online
in-store traffic numbers converting to transactions at or in-store.”
a much greater rate than prior to the pandemic given Emily Chin, Vice President and General
their pre-shopping digital research.” Manager of the National Client Group — Retail at
Karabus also said his firm believes the multi- American Express, said the consumer journey “has
year transfer of sales from stores to digital “was evolved on a broad scale” and noted that even prior
accelerated by as much as five years since March to the pandemic, “consumers’ expectations were at
2020. While we see the rate of digital growth an all-time high – they are looking not just for ease
declining in 2021-2022 as consumers return to and convenience in the experience, but also quality
stores, we expect that retailers will continue to see and sustainability in the goods themselves.”
digital growing as a percent of sales for many years “Consumers are leveraging online, mobile
and ecommerce solutions not just to transact,
FAST STATS: but also to complete more thorough research,
to seek more detailed information and to make
Payment preferences comparisons across different retailers prior to
making a purchase,” Chin explained. “With COVID,
84% 60%
especially during the national shutdown of most
retailers, consumers also sought clean and safe
ways to buy their goods, turning to the Internet to
complete transactions that they may have otherwise
of consumers surveyed of Millennials surveyed made in-person in the store.”
reported that when decid- agree it’s more important Chin said consumers have also tried newer
ing to shop at a business, now to be able to pay for e-commerce shopping experiences for the first
time, “like curbside pickup, buy online pickup
it’s important that their services with their credit
in-store, delivery and pick up service and so
preferred payment option card instead of cash on. These trends are persistent, as consumers
is available appreciate the ability to get the products they want
with greater speed and ease.”
4 |
Analysis
Strategies for success as
shopper demands change
Amid these changes in the customer journey, what
do merchants and brands need to do to succeed?
For her part, Chin said retailers are being
“forced to think fast and smart about how to keep
up with the evolving consumer expectations. They
are re-thinking how to create a seamless experience
across their physical locations and ecommerce
experiences. This requires changes to both online
and offline channels to introduce and fulfill on the
hybrid online/offline models.”
They also must meet more logistically-based
demands from shoppers — especially those online.
Chin said brands and retailers are dealing with
consumer expectations around quick, even same-
day, delivery. And there’s also social media to
consider, Chin noted, adding that strategies need to
be developed to drive conversions and build loyalty
at multiple touchpoints.
“Offline, retailers are introducing unique
in-store experiences and partnerships to optimize Merchants are
their physical footprint and welcome shoppers back working hard to
to their environment,” Chin explained. “In direct make shopping
response to COVID, within the store, retailers easier and
personalized.
are committing additional resources to store
cleanliness and sanitation. They are having to think
about health and safety of their employees and relevant recommendations to meet their lifestyle
customers – which spans everything from vaccine needs. Most importantly, this customizable process
requirements, masking guidelines and contactless allows for the shopper to have a personal experience
and other clean payments.” which has shown results in return purchases.”
Within all these variables and evolving During the peak pandemic period, technology
consumer expectations — both online and in-store helped to drive conversions while UNTUCKit
— brands and merchants must also deliver the best was well-positioned for the WFH era. Corral said
service and personalization. And in some product UNTUCKit was able to assist their online shoppers
categories, customization. Marcie Merriman, “through conversational commerce and the usage
Cultural Insights & Customer Strategy Leader at of an avatar to help shoppers find their fit. Using
EY Americas, said that today’s digital-rich retail this new technology, we were well positioned to
environment, merchant need to “provide their transition to a comfortable yet polished casual
customers with hyper-personalized shopping brand in line with what shoppers were seeking
experiences — whether that be online, in-person, on while working from home.”
social media or even curbside.” “The array of products offered ranged from
“Customers are increasingly expecting to shop our signature tailored button-down shirts, which
in ways that integrate effortlessly with their lifestyles were perfect for virtual meetings, to our best-selling
in seamless, convenient and personalized manners,” t-shirts, henleys, and polos, which are known for
Merriman told WWD. “As such, retailers must their comfort,” Corral noted.
invest in the right technology and infrastructure that Now, deeper into the transformation of the
supports a consumer-centric shopping experience evolving customer journey, shoppers continue to
across all touchpoints.” expect higher degrees of personalization. “Shopping
At UNTUCKit, personalization and where, when and how they want is what our
customization are key to the brand’s merchandising shoppers expect,” Corral said. “By using our
success. And it’s powered by technology. Alberto conversational commerce system online, customers
Corral, Vice President of Marketing at UNTUCKit, receive an experience similar to talking with a
said the company leverages data, AI and analytics brand representative in our store. The customized
“to understand our customers and serve the most experience allows for them to ask questions and
5 |
Analysis
have a personalized UNTUCKit experience.” Services U.S. — Regional and Centralized Client
At Neiman Marcus, Goubert said the retail Group, at American Express, said the checkout
market and how customers approach it “has experience needs to be frictionless, “while ensuring
dramatically evolved over the last year and a all necessary transaction and data protections are
half. In today’s changing world and environment, in place. Customers need to be confident that the
it’s important to make yourself convenient and site and check-out process is secure, their data will
accessible to consumers on their shopping journey.” be protected (stored) and not used inappropriately
That means whether the luxury retailer engages and the whole checkout process is fraud proof.
shoppers in-store or online, “our goal is to create an No customer wants to be second guessing if these
accessible, elevated, and personalized experience,” processes are not in place.”
Goubert said. “Neiman Marcus is pursuing a
differentiated customer experience by delivering an
integrated retail experience. Luxury is a considered
purchase, and our customers trust our brands to
Delivering a true
curate the best gift, outfit, and accessories.” omnichannel experience
Goubert also said Neiman Marcus equips the Tammy Weinbaum, Executive Vice President of the
retailer’s Client Advisors and customers “with all Global Client Group at American Express, said in
the tools to help the shopping journey. We offer the current retail market, brands and merchants
personalized services, such as in-person and virtual continue to face the challenge of an accelerated shift
styling appoints, as well as outfit recommendations, to digitalization and e-commerce. She also noted
which we have accelerated with our acquisition of that the integration of digital and physical began
Stylze.” Technology also plays an important role. well-before the onset of the pandemic.
Goubert said customers are able to share their “While these trends began years ago, some
online shopping carts with digital stylists “for retailers had not focused on digital strategy prior
guidance and advice, and we have remote assisted to the pandemic. A large part of the customer
selling through CONNECT, which is a digital tool journey was focused on in-store where customers
that provides customer service, even when the could have personalized shopping experiences
shopper is not in-store.” and better understand the look and feel of
“It is our goal to meet customers wherever products prior to making a high-value purchase,”
and whenever is convenient for them,” Goubert Weinbaum said. “Now, it is imperative to have
said. “We are in the business of building and a robust strategy that can begin digitally and
deepening relationships. To build that trust and continue in-store as needed such as being able to
loyalty, we need to be able to meet the customers book a personal shopping appointment online and
where they are and create the right experience they preselect items to see or try on.”
are looking for.” Weinbaum said it was imperative, in the
Another variable key to maintaining trust and current, evolving retail environment, to meet the
building loyalty is safety, which includes in-stores customer “where they are.” For Ulta Beauty, this
as previously mentioned, but also online. Lorenzo requires being an active listener. Shelley Haus, Chief
Soriano, Senior Vice President of Merchant Marketing Officer of Ulta Beauty, said the company
actively listens to guests and watches behavior
FAST STATS: shifts “so we can continually evolve our experiences
and meet guests where they are. While COVID-19
Apparel, beauty spending trends pushed consumers to adapt in various ways, there
are three important changes we believe will stay.”
3/4
“Consumers expect their in-store and online
experiences to be seamless and connected,” Haus
explained. “Our GLAMLab and Skin Analysis
tools naturally bridge to Ulta Beauty the in-store
experience as fun, digital ways to discover new
of Millennials surveyed
products and get personalized recommendations.
4-in-5 adults surveyed say say they looking to These were particularly important to our guests
they are looking to buy casual buy casual, classic and while stores were closed and they remain important
clothes this fall, such as jeans sporty clothes this tools to explore and try-on whether our guests are
and a t-shirt aesthetic (82% fall (87%, 73%, 73% at home, on-the-go or visiting us in store.”
versus 78% in June 2021) respectively) Now, as vaccines continue to roll out and
consumers venture from the seclusion of their
6 |Online shopping is
a key touchpoint
in the evolving
customer journey.
American with our community of beauty lovers,” Haus said.
“Our guests are some of the most engaged, loyal
Express’s Lorenzo shoppers in retail and we understand our role in
unlocking even more opportunities to come together.
Soriano said it is In our social channels, we’ve created a community
that celebrates the power of beauty, delights in the
thrill of new products, gets inspired by creators and
imperative that the each other, and connects to shape the way the world
sees beauty.”
online checkout Ulta Beauty’s team members also “fuel this
community” with content to educate, inspire and
experience is spark joy, Haus said, adding that the company
is “always looking at fresh ways to authentically
safe, secure and engage our community as we know how important
and personal their relationship with beauty is.
frictionless. An exciting new example of how we remain
content-forward and fresh is our recently launched
partnership with Supergreat, which integrates
technology and community to create shopping
homes to shop, dine and socialize, having a human experiences centered on unfiltered, authentic videos
connection has become more important than ever, from everyday beauty-lovers.”
Haus told WWD. “This is part of the reason our
guests crave the in-store experience, especially as they
shop for beauty, which is so meaningful and personal
to them,” Haus said. “Because of this, we will
A case study of in-store
continue to focus on the important intersection of the technology, and innovation
digital, the physical, and the emotional, with human Here’s a common scene: You’re at the airport and
connection at the center of everything we do.” need some traveling essentials. But the checkout lines
Aside from the human connection, Ulta Beauty is at several shops are long and people are bunched up
finding success with an additional focus on creating together, some not wearing masks — so you leave.
community. “We believe beauty has the ability to For Hudson, this was a challenge that
foster togetherness and we’re proud to celebrate that technology and innovative thinking could fix. Brian
7 |Analysis
Quinn, Executive Vice President and Deputy Chief
Executive Officer of Hudson, said the airport retail
A case study in aligning
landscape “provides a unique retailing environment with trends
WAREHOUSE
in comparison to street retail. Our stores have According to reports in WWD over the past year,
significant exposure to daily passenger flow, and we the outdoor products segment experienced explosive
recognize that travelers can sometimes be dissuaded growth during the pandemic as consumers headed
uts by long lines at checkout — especially if they are outside to hike, bike, and kayak, among other
pressed for time.” activities. Camping was also a key growth category,
“We also know that more and more aspects of according to NPD’s Dirk Sorenson, Executive
the travel experience are becoming digitalized as Director and Industry Analyst for Sports at the
technology and processes evolve, and that innovation company. In a recent blog post, Sorenson said the
allows us as retailers to meet these digital demands trend is continuing with specialty retailers and niche
our travelers have,” Quinn told WWD. brands seeing the greatest lifts. But just because
Quinn said prior to the pandemic, Hudson the outdoor segment is robust,
had deployed a strategy to reimagine its stores conversions are not guaranteed.
by leveraging technology aimed at enhancing the It’s a highly competitive market,
traveler experience. “When the pandemic began, we and retailer and brands need to
also saw that there was a preference for contactless recognize how consumers are
retailing options, and so we quickly sped up our evolving and align with their
timeline for a number of our digital initiatives, needs and wants.
including introducing new contactless payment Brian Galloway, Vice
options, expediting the roll-out of self-checkout, President of Omni Marketing for
and launching Automated Retail for 24/7 access Orvis said the Orvis customer
to PPE and specialty retail,” Quinn said adding is indeed changing. “They are
that Hudson Nonstop stores installed scan-and-go younger, choose brands based on
technology “to allow travelers to enter the store their values and are increasingly
with a credit card, pick up their products, and then looking to find inspiration in
exit – avoiding checkout lines. Travelers have been the outdoors,” he told WWD.
responding very favorably to these initiatives.” “So, we have been focused on
Hudson has also partnered with M·A·C connecting with these customers
Cosmetics for several years and currently has 15 in a way that recognizes who they
M·A·C stores in North American airports. This past The evolving are, where they are and how they want to engage
summer, Quinn said M·A·C incorporated several customer with the brand. Whether it’s gear or apparel, or fly-
innovative and sustainable design elements into a journey often fishing guidance or expertise, they choose where and
new store format which debuted at Salt Lake City begins with a how, and that is on the rise in the digital space.”
mobile device.
International Airport. Galloway said earlier this year the company
“There are a number of digital touchpoints retooled and relaunched its website “to meet these
throughout the store, including virtual try-on, demands and dial up our brand experience with
in-store screens, and QR code integration with easier access to our educational and environmental
product information, how-to videos, and travel retail resources, and by enhancing tools to help people
exclusive content,” Quinn said. find the right product.” He noted that the company
When asked what’s driving customer continues to iterate the site “for a more customized
expectations today, Quinn said priorities have shopping experience, guided by the desire to make
shifted for consumers. “We understand that today’s it easy for customers, no matter where they are in
traveler is more connected and time sensitive, and their journey.”
has higher expectations for convenience, safety, and Galloway also described Orvis as a purpose-
speed across their entire travel journey,” Quinn driven brand, “so we’re also increasingly focused
said. “We also know that they are accustomed to on connecting with customers through storytelling
one-click, contactless shopping which they hope to and shared values,” which include short films on
replicate in-store.” topics such as the relationships people have with
ILLUSTRATION BY GRUNDINI
Quinn said Hudson continues to innovate “to their dogs or the positive impact Orvis is having
meet these evolving traveler preferences, through on the environment. “More than ever, our emails
both digital initiatives and new store concepts.” and social channels are featuring this type of
Aligned with that is the current rollout of Evolve by content because we have powerful and intimate
Hudson (Evolve), which is a new “shop-in-shop” relationships with our customers and we want to
experience store in airports. nurture that,” he said. “Our customers feel this
8 |AMEX VENTURES INVESTMENT Q&A:
MishiPay
The evolving consumer journey is driven by changes in
shopping preferences — especially for convenience.
Here, MishiPay, an Amex Ventures investment, discusses
this trend and how scan and go technology can help.
Q: How does MishiPay MishiPay shopper and our
work? What are the ben- users at MUJI UK spend over
efits for merchants and 25% more compared to the
consumers? store average.
A: MishiPay empowers Finally, MishiPay enables
shoppers to scan and pay retailers to reduce their costs
for their shopping with their related to checkout hard-
smartphones, rather than ware while simultaneously
spending time queuing improving staff efficiency by
at a traditional checkout. reducing the time staff have Shoppers are
With MishiPay’s technology, to spend at the checkout embracing
shoppers can pick up an processing transactions. scan-and-go
item they wish to buy, scan at the
checkout.
the barcode of the item with Q: What are some of the
their phone, access enriched KPIs of using the app?
item information and trigger A: Here are some: creates poslog/tlog files
any available promotions or >> A leading grocery retailer that are sent to the retailer’s
tailored incentives in real saw a 33% increase in repeat order management system
time. Then, when they’ve purchases from the same Our mission is to ensure no manual work is
completed their shopping, shoppers and a 14% increase required. MishiPay can also
they can pay in the app in total spend per quarter
to make provide additional financial
>> MishiPay users at MUJI
using a variety of conve-
nient payment methods and spend 25% more compared
the in-store reports (reconciliation files,
etc) where required.
simply leave the store. No to store average
>> MishiPay users at a
shopping Q: Can you speak to scalabil-
queueing; just Scan, Pay
and Go. leading variety retailer in the experience as ity for this product?”
What’s more, thanks to Nordics spend 35% more A: MishiPay can scale to
our webapp, shoppers can than the store average enjoyable and hundreds of stores with a
use MishiPay without having >> Retailers using MishiPay’s retailer with no extra effort.
to download an app. This marketing push notifications convenient as Retailers do not have to pro-
enables us to achieve mar- saw an uplift in repeat pur- vide anything besides the
ket-leading levels of user chases of 22% possible for addresses of the new stores.
adoption. >> MishiPay currently pro- MishiPay can process pay-
Our mission is to make the cesses more than 5 million both customers ments in any currency and
in-store shopping experience items and 720 promotional is already translated in all
as enjoyable and conve- types with our clients stores and retail staff. major European languages.
nient as possible for both in more than 14 countries We are currently live in 14
customers and retail staff. >> MishiPay has integrated countries and have experi-
We bridge the gap between with more than 23 payment size of the retailer, MishiPay ence of deploying across a
online and offline shopping, gateways and supports all works with the retailer’s wide variety of retail catego-
giving merchants priceless payment methods existing systems (any kind of ries and store formats; from
data about their customers ERP, POS, etc) and doesn’t grocery and fashion to travel
to help them gain a clearer Q: For merchants, what require any investment in and DIY.
understanding of the shop- is the integration process new software or hardware. We also offer additional
per journey in their brick- like? Is it complicated to MishiPay receives the product functionality: after
and-mortar stores. On top onboard? retailer’s product catalogue the initial deployment of
of that, merchants deploy- A: The integration process and promotions (via APIs or Scan & Go, many of our
ing MishiPay enjoy higher is completed in as little as files), processes the transac- clients also enable MishiPay
revenue: a leading Spanish three weeks and requires tions via the retailer’s own Click & Collect, marketing
grocery retailer saw a 14% little involvement from the payment gateway and finally packages and Home Deliv-
net increase in revenue per retailer. Regardless of the MishiPay automatically ery capabilities.
9 |Analysis
every day when they walk into our retail stores or Williams told WWD that marketing to
join us on guided adventures, so we want to make consumers is ongoing process that includes analyzing
sure they feel this through digital media as well.” performance data and actively listening to consumers
He said the brand has “exceptional and retail partners. Williams said having “long-form
relationships” with its customers and said the narrative content that engages consumers at the
company “literally accompanies them on their wing- brand level, down to beautiful product photography
shooting and fly fishing journeys, from teaching folks and product descriptions as someone gets nearer to
for the first time, to sharing their adventures with the point of purchase is key.”
them on the bow of a boat or walking grasslands “We also take steps to ensure these tools are
together with pointing dogs. It’s in our blood to available to all our retail partners,” Williams said.
provide an authentic and connected experience with “Consumers are also very savvy. They expect
customers.” Galloway also said as an early pioneer quality products and especially in the outdoor and
of the mail order business, “we also have a uniquely fish space, products that are durable. We’re seeing
long view of customer journeys and understand they consumers be increasingly less price sensitive,
are always changing, so we must evolve as well.” prioritizing form and function over price. It takes
“Right now, the focus on digital is clearer than time to build consumer trust and one way we
it’s ever been,” Galloway said. “We surveyed our can do that is through an exceptional product
customers recently and found that sixty percent say experience. That’s what we obsess about every day,
they are spending more time online than before the building product that our consumers can trust.”
pandemic began. They are researching, browsing,
or seeking community more than ever before.
New capabilities have quickly become table stakes
expectations — for example, customers expect
ESG, DE&I, and
the ability to reserve online and pick up in stores. purpose-driven brands
They continue to love our in-person Fly Fishing Another crucial dimension of the evolving customer
101 classes and seek an online curriculum based on journey is a demand for more sustainable and
their needs. We can and want to connect with folks environmentally friendly approaches to stores, services
across the entire journey map.” and products. With the Hudson Evolve rollout, for
And that journey map is cluttered with choices, example, Quinn described the construction of the
which is good for the consumer, but challenging for store as unique in this respect. “The design features
brands and merchants. Ash Williams, Vice President fixtures that use responsibly sourced materials where
of Marketing at footwear and outdoor fishing apparel possible and are created with a modular design to
brand Grundens, said the company recognizes that allow for flexibility,” he said. “The store is also built
consumers “have more choices in how and when using low emitting paints for improved air quality as
they make a purchase. We also recognize the need to well as LED lighting and ENERGY STAR certified
for an enhanced shopping experience be that on our displays to reduce energy usage.”
own website, our Amazon store front, an online retail Hudson’s innovation reflects a larger movement
partner or a wholesale retail partner.” in the industry by retailers and brands to adopt ESG
(Environmental, Social and corporate Governance)
FAST STATS: measures as well as be more transparent about
DE&I (Diversity, Equity and Inclusion) initiatives.
Apparel, beauty spending trends In a recent article by eMarketer [4], the firm said
brands touting DE&I efforts and who position
themselves as “purpose-driven” have taken “center
2/5
stage” in the minds of consumers.
With DE&I, social justice movements and
activism have spotlighted the importance of
retailers and brands working to be more diverse
and inclusive. Sephora, for example, is rethinking
of GenZers surveyed say 3-in-4 adults surveyed are
its approach to merchandising as it looks to expand
they are spending more on spending about the same or
its Black-owned beauty offerings to 15 percent of
clothing/footwear and at more on clothing/footwear the merchandising mix. WWD recently reported
restaurants/bars than they and beauty products (77% [5] that the beauty brand expects to reach this
were this time last year and 71% respectively) com- benchmark in prestige hair care by yearend.
(39% and 37% respectively) pared to this time last year With ESG, Neiman Marcus’s Goubert
said there’s been growth in the significance of
10 |An Evolved Retail Market
To succeed in today’s market, merchants and brands need
to have a clear picture of how consumers shop and what
they expect. This means having in place fraud prevention
measures, scan and go technology, and contactless pay-
Order on line
ment options. Brands need to be where the consumer is, and get
which means online and in physical spaces. Online, shopping deiliveries
should be a frictionless experience with products delivered
in a timely and cost-effective way — whether it is dropped
shipped from a manufacturer, sent from a fulfillment center,
or pulled from store inventory. CONSUMERS are using
smartphones, desktops,
and tablets to shop and
BOPIS OR click buy online, and anytime.
and collect is
a service that
is expected to
remain in place
and consum-
ers demand
safer shopping C USTO M E R
experiences.
CUSTOMER
DELIVER
BUY BUY
ONLINE SHOPPING
should offer the same
Order on line brand experience as
and pick up
from shop a physical shopping
Goexperience.
to shops
SH O P O NLI NE
SHOP ONLINE
Fraud Surveillance Payment Shop in Aisle Pop up Covid Hand
prevention and methods a shop shopping protection cleaning
protection
Payment Shop in Aisle Pop up
methods a shop shopping
Surveillance
Fraud and Covid Hand
prevention protection protection cleaning
SH O P I NSTO R E
SHOP IN-STORE
SHOPPING IN a store
requires contactless pay-
Click and collect
ment options, scan and go,
and other technologies. ILLUSTRATION BY GRUNDINI
Order on line
11 | and get
deiliveriesAnalysis
environmental responsibility and sustainability in of aggression and violence than they did the year
the luxury market. “Neiman Marcus is making before. Retailers cited COVID-19, policing and
important investments in ESG and sustainable changes to sentencing guidelines, and the growth
operations,” he said. “Our goal is to, one day, of online marketplaces as top reasons behind the
be one of the leading luxury retailers in ESG. We increase in ORC activity.”
are actively working to invest in our supply chain In response, the report found that “retailers
efficiency, connect customers with sustainable and are investing in more resources to safeguard their
ethical merchandise, strengthen customer experience customers, employees and operations.” The report
through mending and alterations, and invest in showed that 53 percent of retailers polled said their
the circular economy through re-commerce.” companies are “allocating additional technology
The NRF’s Thorne said consumers have been resources and another
increasingly engaged and conscious driven “and 50 percent said they are
seek to support brands that align with their own allocating additional
core values. Retailers are adapting to better capital specific to [loss
serve values driven consumers with products, prevention] equipment.”
services and experience that truly align with their Specifically with
customer’s values.” online fraud, the
pandemic experienced
a global jump in
“fraudulent digital
Watching out for fraud transaction attempts,”
While the retail industry benefited from growth of according to a report
digital commerce and a new and evolving customer by TransUnion [6]. The
journey, these changes have also resulted in higher company found global
fraud and organized retail crime (ORC), according fraudulent attempts rose
to a recent report from the NRF. “Organized 60% of 46 percent in the period from March 2020 to March
retail crime and numerous other security concerns consumers 2021 as compared to the same period in the year
evolved in 2020, and most retailers attribute the surveyed prior. In the U.S., that percentage gain was 22 percent.
say they are
increase in criminal activity to the pandemic,” spending
noted NRF researchers in the organization’s 2021 more time
Retail Security Survey.
Mark Mathews, Vice President for Research
online than
before the
The 2021 holiday
Development and Industry Analysis at the pandemic
began.
shopping season
NRF, said retailers “have continuously pivoted In the short term, the fall and holiday shopping
throughout the pandemic to ensure their employees season will test the merchandising acumen of
can work within a safe environment and their brands and merchants in this newly evolved retail
customers can shop safely, whether in stores, online environment. The season will also give companies a
or through avenues like buy online, pick up in store. chance to practice being nimble to market changes
But new ways of shopping have also opened up new by adjusting strategies and tactics in real time as
avenues for criminal activity.” consumers drive sales online and in-stores.
The survey showed that 39 percent of respondents Rod Sides, U.S. retail leader at Deloitte, said
“said they saw the greatest increase in fraud in there is “a lot of pent-up demand out there” and
multichannel sales channels such as buy online pick described consumers as being “flush with cash.”
up in store, up from 19 percent the year before. In “They have stimulus money, and money saved
contrast, just 28 percent said the greatest increase in from not travelling, and as a result, savings rates
fraud came from in-store-only sales, down from 49 are high,” Sides told WWD. “When that happens,
percent the year before. The percent of those who generally speaking, things go pretty well.” Sides
pointed to online-only sales fraud remained flat.” said he expects consumers to settle down into a
The survey also revealed that while the overall new normal moving forward — despite the spread
shrink rate in the industry “remained relatively of COVID-19 variants.
ILLUSTRATION BY GRUNDINI
steady” compared to 2019, “it remains above the From the perspective of the merchant, this
average of the last five years.” The report said holiday season has some serious challenges. Thorne
respondents reported “an average shrink rate of described 2021 as “a far better year [than 2020],
1.6 percent, unchanged from last year’s high.” but retailers continue to face challenges. Retailers
And regarding higher levels of ORC activity, the are dealing with large labor shortages, as nearly
NRF said “ORC gangs are exhibiting higher levels 1.1 million retail jobs remain unfilled. The industry
12 |AMERICAN EXPRESS PRODUCT Q&A:
Accertify
As the pandemic triggered a surge in e-commerce, more This is a growing problem, The fraud prevention teams
consumers shopping online also means more fraud. and it is being committed by should work with customer
Here, Accertify shares insights about digital fraud and customers perhaps without support/service teams to
mal-intent — they may reason track how many refund
how to mitigate it.
in a single instance it is ‘justifi- requests are coming, espe-
able.’ Additionally, there are cially on large dollar items.
Q: What is Accertify and how functionality that provide the “professional refunders” Any time these requests are
can it help mitigate online speed and flexibility to stay a who advertise their services made, make sure they are
fraudsters? step ahead of fraudsters. to ensure customers will get logged so they can start to
A: Accertify, a wholly owned their money back or a dupli- analyze which customers that
subsidiary of American Q: For merchants, what is the cate item sent, and in turn have multiple claims. From
Express, is a leading pro- integration process like? Is it
vider of digital identity (new complicated to onboard?
account opening fraud and A: The integration process One area we are seeing
account takeovers), payment is very straightforward.
fraud and abuse, payment We expose an application
fraud increase greatly is in
gateway, and chargeback programming interface (API)
management solutions. Head- that developers can code
the refund process.”
quartered in Itasca, IL, Accer- to and send us data. It is a
tify has over 575 employees very standard process. Upon
globally, including offices in receipt of the data, Accer- they take a defined cut of the there, merchants can deter-
Mexico City, London, Madrid, tify executes a risk strategy order value. Services like this mine the true impact in their
Amsterdam, Gurgaon, Syd- composed of machine are not buried on the dark organization, and decide how
ney, Tokyo and Singapore. learning, community data, web, but rather in plain sight best to mitigate the problem.
Accertify’s suite of prod- and business policies (factors on online marketplaces Some points to consider:
ucts and services help orga- unique to each client) and and across various social Move the refunds process
nizations grow their digital returns a score and reason media outlets online Many retailers employ
business by driving down the codes that transparently Competitive Retail this practice today whereby
total cost of fraud, improving displays why a transaction Environment the claim is made online.
the customer experience by was approved, declined or Many customers consciously This can enable retailers to
removing unnecessary fric- suspect. If desired, we also decide where to shop based collect data, both actively
tion, and ultimately increas- have a case management on a retailer’s refund/return and passively (ex: device
ing revenue (approving platform where a transaction policies. As a result, it is a intelligence and user behav-
more orders). can be queued for additional delicate balance to have cus- ior analytics), and enable a
Today, Accertify protects review by an analyst. Overall, tomer-friendly policies, but at uniform, risk-based decision
5 of the top 10 U.S. Internet the integration process is the same time protect from process that incorporates
retailers (40% of the top measured in weeks. fraud and abuse many data points
100) and over 350 enterprise One area we are seeing Analyze the transactional
customers worldwide. As a Q: With the ongoing growth fraud increase greatly is in data available to start to
result, we can formulate a of online shopping, are we the refund process. It starts identify unusual patterns it
clear risk profile of data across seeing more online fraud? with a customer placing an could be many unique mobile
many industries and interac- What’s driving it? order online, receiving the devices making purchases
tions that enables us to spot A: The short answer is yes, goods, and then calling the (normal behavior) but one
patterns and anomalies as and it continues to evolve customer service depart- mobile device initiating many
they arise and then share that and increase in complexity. ment and falsely claiming INR requests (abnormal
insight across our network. We believe this is due to a non-receipt. While there behavior). Merchants can also
By applying multiple layers few key factors: isn’t a standard name for see if an order was originally
of defense to combat fraud, Growth in e-commerce More this type of abuse, it can be shipped to one location but
our customers can: maximize and more goods are being referred to as Item-Not-Re- the refund request is coming
revenues through improved purchased online and deliv- ceived (INR). This is a difficult from another country, with
detection rates, fewer ered to individual households. problem to detect because seemingly no relationship to
chargebacks and decreased With increased volumes it can a legitimate customer is the original order
false positives; simplify be easier for fraudsters to committing the abuse. Training customer service
processes and procedures for hide and equally more difficult As a result, it is import- agents to ask the right
preventing digital fraud into a for retailers to detect ant to start monitoring and questions and be vigilant
single, easy-to-use platform; 1st Party Fraud (sometimes measuring to understand the for certain behaviors that
and receive new features and termed “friendly fraud”) full scope of the problem. may signify refund fraud
13 |Analysis
is also experiencing supply chain disruptions and For Orvis’ Galloway, the macro trends point
bottlenecks, which is driving inflation.” to a strong Q4 and holiday season for outdoor
“America did get back to normal for a while retailers and brands. “People continue to seek the
– consumers were shopping, eating at restaurants, outdoors for their health and well-being,” he said.
enjoying a sense of normalcy,” Thorne noted. “The pandemic has sparked a lot of introspection
“The rise of the Delta variant, combined with low and re-thinking of priorities. Wellness, living life to
vaccination rates amongst young people, has led to its fullest, meaningful connections and memorable
the return of mask mandates and other restrictions. moments with loved ones are all top-of-mind and
Since the onset of the pandemic, the biggest priority the outdoors provides the backdrop. Sixty percent
has been the health and safety of associates, partners, of our surveyed customers ranked being with family
customers and communities. NRF is encouraging and friends as their no. 1 priority. Giving gifts has
more Americans to become fully vaccinated so we much more meaning than it did pre-pandemic, and
can all emerge from this pandemic.” we believe our customers will be taking the time
Still, as the NRF’s data shows, shoppers are to find the gifts and experiences that convey that
resilient. Goubert from Neiman Marcus said while meaning and create memories.”
it is difficult to predict what this holiday season will
bring, “we believe that customers are more hopeful
and excited than ever to take a much-needed break An ongoing
from reality and have plans to celebrate, either
physically or virtually.” consumer evolution
“Neiman Marcus is optimistic about the Deloitte’s Sides says he doesn’t see retail industry
upcoming holiday season for a few reasons, or consumer behavior returning to pre-pandemic
including the transformation of our business that modalities any time soon. “I think we will continue
we are driving, coupled with the strengths of the to see the consumer evolve,” he said.
relationships we are building with our shoppers,” Ulta Beauty’s Haus agreed. “Our guests’
Goubert said adding that the company recently behaviors are always shifting, and we work hard
launched its Fall campaign, “Re-Introduce Yourself,” to stay ahead of their wants, values and needs,”
which Goubert said is designed to encourage she said. “Our strategic approach to leading the
customers “to embrace how they, the world, and industry remains rooted in human connection, hyper-
Neiman Marcus has evolved over the past year.” relevance and strong capabilities. This trifecta makes
“Customers have a desire to switch up their experiences unique to Ulta Beauty and unique to
wardrobe and are longing for new fashion,” he each of our guests.”
added. “Our brand is bringing their best foot Haus also noted that one of the most significant
forward with 110 new brands, several of which are evolutions in consumer behavior “is the deeper focus
exclusive to Neiman Marcus, as well as many unique on self-care and the connection of that to beauty
brand collaborations. As shoppers re-introduce and we will continue to deliver in this space with
themselves to the world again and explore new ways products, content, and conversations that help fuel
to express themselves, we are confident we will see the mind, body and spirit connection.” Haus said
the continuation of strong trends in our business.” due to a consumer expectation for seamless channels
and convenience, “we will continue to innovate with
FAST STATS: omnichannel experiences, like our recently launched
Ulta Beauty at Target, to give guests even more easy
Masks on, and out and about and delightful ways to experience Ulta Beauty.”
“Consumers now have even higher expectations
63% 2/5
of companies and brands, so above all else, our
focus as a purpose-driven, diversity forward brand
will remain our North star and we will continue to
act in ways that reflect our values of transparency,
of respondents sur- of GenZers and Mil- social responsibility, authenticity, and inclusion,”
veyed say they are lennials surveyed are Haus said.
wearing their mask seeing friends/family and The NRF’s Thorne said the foundation of the
retail industry “has always been a belief that the
indoors about the same shopping in-person more
customer is always right. That balance of power has
or more frequently than often than they were
shifted even further in favor of the consumer who
they were prior earlier in the summer now shops for anything, anywhere, anytime.”
Thorne said retail is evolving rapidly, “and
14 |Trends to
watch include
the growth of
scan-and-go
and contactless
payments as
well as contin-
ued growth of
e-commerce.
successful retailers are making thoughtful contactless payments now than before the outbreak,
investments to better understand their customers, and 11 percent said it was their preferred way to
anticipate what they want and need, and then offer pay over swiping or inserting a card.”
products, services and experiences that resonate with
their customers.”
But wait, there’s more
Key trends to watch for 2022 to consider.
One of the most significant changes that occurred “What’s also exciting is that I believe many of the
during the pandemic, and one that industry analysts new technologies and touchless changes we’re seeing
agree will be prevalent moving forward, is the demand today will benefit us for years and years to come, and
for contactless and touchless payment options. contactless is at the forefront,” Kieley told WWD,
According to JJ Kieley, Vice President of Payment also noting that retailers and brands will be laser-
Consulting Group, U.S. & LAC, at American Express, focused on their omnichannel approach.
these payment innovations “will continue to remain a “In today’s environment, merchants are
major focus area as we head into next year.” increasingly offering their customers an omni-
“And the proof is in the data that the trend channel experience so they have the ability and
towards contactless is likely to continue beyond option to shop and pay their preferred way –
the COVID-19 outbreak,” he said, noting that 80 regardless of whether they order online or via
percent of merchants say they have been encouraging mobile or pick-up in store or curbside, delivering
their customers to use no touch payments while 81 a consistent and seamless customer experience is a
percent of merchants intend to make contactless a key differentiator during this time,” Kieley said.
permanent option for their customers.” Kieley said the pandemic has “opened up new
The data also showed that 84 percent of ways to shop that will likely last well after it is
merchants “agree that due to the pandemic, they over. For example, many consumers have now
are even more likely to promote this payment experienced the convenience of grocery delivery
option,” Kieley said, adding that consumer interest like never before. Similarly, curbside pickup is
in these solutions is also on the rise, “as indicated likely to continue as retailers big and small have
by our consumer survey earlier this year, which now invested in the infrastructure needed for this
found that 58 percent of consumers who have and consumers are finding the convenience in this
used contactless said they are more likely to use new shopping experience as well.”
15 |You can also read
