Three Priority Digital Investments for Retail in 2022

February 2022

BY

Robert BrownNational Digital Leader, Retail CPG

Retail’s top priority is improving the customer experience. The pandemic reinforced customers’ affinity toward brands that offer the most convenient, frictionless experience across channels. Creating a top tier customer experience requires a holistic understanding of the customer journey and the right technologies to alleviate pain points.

However, a major question remains: how can retailers pay for it? According to the 2022 BDO Retail CFO Outlook Survey, 45% of retailers say they have less than three months’ cash on hand, and 43% want to keep more on hand for protection against future disruption. Balancing liquidity needs with customer experience investments will be key to retail success in 2022.

Fortunately, there are small-scale and relatively inexpensive digital investments retailers can make that will enhance the customer journey without breaking the bank.
 

Here are three digital investments to consider:

#1: Create a headless storefront for flexibility and better customer engagement.

Most consumers expect retailers to have an online store, but methods of linking the digital storefront to the company’s backend can vary. For businesses that are new to the e-commerce game, a popular choice is a traditional third-party e-commerce platform. While this option can be cost-effective and relatively easy to implement, there’s a major downside: These platforms rely on monolithic architecture, which means that the functions of the website—like the payment process and cart—are interdependent of the layout of the website. Therefore, any changes made to your frontend will impact your backend. As a result, it’s difficult and time-consuming to make updates, and can lead to unoptimized pages with long load times, resulting in a frustrating customer experience.

Fortunately, there’s another option that’s becoming increasingly popular: The headless storefront. A headless storefront refers to decoupling the digital storefront (that is, the “head”) from the backend e-commerce functions (the “body”). The advantage of this separation is that it allows the company to make changes to the digital storefront—like adding product pages, redesigning the layout, adding new features like chatbots—while keeping the backend functions intact. Think of it through the lens of remerchandising. When a company remerchandises, they don’t need to rebuild the entire building. But when a digital storefront and backend are interdependent, that’s essentially what has to be done each time the digital storefront needs an update. The reverse is also true: Changes to your backend won’t impact your frontend, so customers will not have their buying experience interrupted or changed by backend adjustments.

The main advantage of a headless storefront is its flexibility. It allows companies to actively manage and refine the customer journey while still having access to all the backend support needed to actually sell to and service the customer. This feature keeps customers returning, rather than leaving for a brand that offers a better buying journey.

How do I know if this is a good investment for me? Headless storefronts make it easier to create a desirable customer journey. They cut down on load times, speeding up the buying process for consumers, and enable faster brand pivots and product launches.

If you recognize your company in any of the following statements, it’s worthwhile to consider investing in a headless storefront:
  • Consumers frequently visit the online store but leave without buying anything.
  • Updating the store page is a time-consuming and painful process.
  • Load time for the online storefront is slow.
  • The design of the online store is outdated and difficult to change.
  • Uploading new content is too time-consuming to do regularly.
  • Launching a page for a new product line or special offer takes more than a week.
  • Changes to the backend functions, like inventory payments and compliance, result in downtimes for your online storefront.
  • Backend updates frequently change the customer experience on your website.
  • Website uses a design template and you’re looking for more ability to customize.


 
 

#2: Turn a website into a progressive web application (PWA).

For many retailers, a mobile app is now a necessity alongside an online store. While an app could expand customers’ buying options and make the shopping experience more friendly on mobile, there are some potential pitfalls as well. Apps are more of a commitment for users, as they have to choose to download something to their phone. If there is no difference between the mobile app and the website, they may have little incentive to download. Offering features like payments via app, loyalty points and more may be just what the user needs to decide to click the download button. However, if the mobile app user experience and design cannot compete with the website, there is a risk of friction for customers. Developing an app also creates the added responsibility to ensure both platforms are consistently updated and in sync.

PWAs solve these problems and more by creating both the webpage and app from one set of code, enabling businesses to update both at the same time so information across platforms remains consistent. They also offer greater convenience to customers since these apps have some level of functionality even when offline. This year, 55% of mobile shoppers downloaded at least one new shopping app before the holiday season, as reported by Digital Turbine. Another advantage of PWAs is that they can be added to some app stores, helping retailers reach more customers through their preferred shopping channels.

One of the top benefits of PWAs is standardization of the customer experience. If a company has an app that is built independently from their website, customers might find that one offers a very different purchasing pathway than the other. For retailers that just have a website, it may not be optimized for mobile use, making it difficult to purchase on mobile. With a PWA, the customer experience is the same regardless of the platform the buyer is using, ensuring that no matter how the customer prefers to shop, their needs and wants are being met. Furthermore, PWAs can be used to facilitate headless e-commerce, which offers more benefits for the customer experience including faster page load times.

How do I know if this is a good investment for me? Implementing a PWA can make it easier and more convenient for your customers to buy online and via mobile, resulting in more orders. If your webpage and app aren’t linked, customers may experience friction that makes them abandon their purchases.

You should consider deploying a PWA if any of the following statements sound familiar:
  • Order fulfillment times are different based on whether the order came from the mobile app or desktop browser.
  • Customers frequently reach out to ask for help with website or mobile app issues.
  • Mobile orders are significantly lower than desktop orders.
  • The website and/or app experience frequent downtimes.
  • It takes more than ten seconds for the app and/or webpage to load.
  • There are frequent drop-offs or abandoned carts for mobile customers.


 
 

#3: Optimize the social commerce experience for more convenient shopping and better brand loyalty.

According to Statista, more than half of social media users aged 18 to 24 have bought something through a social channel, and Google reports almost two-thirds of consumers say mobile-friendly shopping experiences are essential in deciding which brand or retailer they’ll buy from.

Many retailers are using their social media pages to simply post content, while paying for social ads that are not converting sales. The reach on organic content for brands tends to be very low, as social media platforms tend to push brands to pay to promote content. Without paying to boost content on Facebook, for example, the average reach of a brand’s page is only about 5.2%. Retailers need to do more than just post content, and should instead consider how to connect with customers and start the buying process in social channels rather than redirecting users to another page.

Shoppable social pages are just one way to optimize a company’s social presence. Companies can go a step further with livestream shopping —social media’s answer to QVC —that allows users to shop while watching a livestream event. These events allow companies to connect with prospective buyers in their chosen social channels, bring shopping directly to them and showcase new products. Retailers can also invite influencers to be part of their livestream, further increasing engagement with their target customers. Creative approaches to social commerce are integral to forging close connections with your customers and increasing brand loyalty.

How do I know if this is a good investment for me? An optimized social media and social commerce experience allows customers to buy quickly and develop a personal relationship with your brand, ultimately increasing loyalty and the likelihood of repeat purchases. A lackluster social media experience may lead prospective buyers to skip over your products entirely, lowering overall brand awareness.

If these statements resonate with you, it may be time to reevaluate and enhance your social media presence:
  • It takes more than 3 hours to respond to a customer’s inquiry on social media.
  • Customers cannot make purchases directly on the brand’s social media page.
  • The brand isn’t interacting with customers online on a daily basis.
  • It takes more than one click for a customer to get from the social media page to the company website.
  • Brand content doesn’t incorporate customer reviews and photos.
  • Moderation of social pages frequently hides customer posts and comments.
  • The brand is not part of conversations outside of its own social media pages.
 
 

2022 could be your best year yet.

You don’t need to pour all your money into digital to see an improvement in business performance. Simply make these three small-scale investments and watch the difference in customer engagement. Remember: It’s not about how flashy the technology is or how much money it costs. It’s about the value it brings to the customer, and oftentimes, the smallest changes have the biggest lasting impact.
 
 

 
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