Iman Schrock is President of GigaCloud Technology (Nasdaq: GCT).
It’s no secret that many brands are turning to e-commerce channels to drive sales. U.S. e-commerce revenue is projected to increase by $657.8 billion over the next five years and reach $1.9 trillion by 2029. However, brick-and-mortar locations are continuing to make a comeback across sectors, following dramatic decreases in retail foot traffic resulting from the Covid-19 pandemic. Average monthly foot traffic has now “recovered to 81% of pre-pandemic 2019 levels [and] traffic is expected to fully recover by Q3 2024.”
Still, these retailers are facing new, evolving challenges in capturing consumer value in 2024, with 45% of consumers reporting that they are “spending less money on non-essential items and focusing only on purchases critical for survival or well-being.” In the household goods sector, for example, shoppers may be inclined to put off purchases of new furniture. With this, brands must focus on increasing their average order value (AOV) to support continued growth amid a challenging economic landscape.
Retailers have the opportunity to capture revenue from this upward trend in foot traffic. However, they must focus on improving their technology stack and supercharging brand and marketing efforts to ensure they’re reaching their target demographic as consumer demand fluctuates. Below are some tips for increasing foot traffic and average order value in physical locations.
Offer an expansive and curated catalog.
The first step in driving customers to retail locations is to provide a curated and well-organized product catalog. This serves as the initial point of interest for the brand. Before visiting a physical store location, shoppers are very likely to visit the store’s e-commerce website first, serving as an “endless aisle” to drive store traffic and convert shoppers.
Organizations should consider the addition of highly customized product filters, allowing customers to easily find what they need and discover related products throughout the site without needing to scroll. Product filters can be invaluable in driving foot traffic, allowing customers to easily search for trending, new or exclusive items available at their nearest store location.
Engage in highly targeted marketing.
In an increasingly competitive industry, yesterday’s marketing tactics will not work with today’s audiences. Gone are the days of one-size-fits-all, mass promotional emails and campaigns aimed at the entire customer audience. To capture attention and drive sales and foot traffic, brands need to prioritize highly segmented marketing efforts, targeting by age and location while utilizing AI to target by interests, buying habits, past purchases and more.
Click-through rates can be 5.3 times higher when behaviorally targeted ads are used and may even be 10.8 times higher when ads are targeted by past purchases. Uniquely targeted and AI-powered marketing campaigns are a critical first step to capture consumers’ attention and speak to their unique needs and demands.
Conclusion
On the heels of the Covid-19 pandemic, the brick-and-mortar retail space has changed drastically. Foot traffic numbers are steadily recovering, but consumer demands and preferences have completely shifted as shoppers demand more product variety with a seamless in-store experience. To boost store traffic in 2024 and beyond, I recommend retailers focus on building a highly curated catalog and expanding their targeting efforts to know their customers better and meet their needs with a retail experience that stands out from the competition.
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