Merchant Innovation

Retail Tech Meets Consumer Reality

"The consumer’s path to purchase is anything but linear, and discovery is influenced by any number of factors and actions taken in any point of time." - Karen Webster, CEO MPD, R2 Keynote

As recently as 20 years ago, the path to purchase for the majority of consumers was a pretty straightforward thing. A consumer with a need predictably went to the nearest, or cheapest, local retailer to fulfill that need. If they had a good, or at least average, retail experience, more likely than not they would return to that shop. If they had a bad experience once they walked in the door, they probably wouldn’t unless for some reason that particular retailer is the only game in town (a situation common to low population rural areas).

Driven by technology, evolving preferences, an ever proliferating universe of choices and potential customizations for individual consumers — that path as described is mostly an antiquity at this point. In 2015 there is no single path to purchase and no single strategy merchants, issuers and payments players can adopt to get a better grip on the consumer path to purchase.

“Innovators see a future that’s different,” Webster noted in that same keynote. “One that leverages advances in computing power, new technologies, apps, data, the cloud and connected devices.”

“They are not trying to merely imagine a different retail experience but to reinvent the relationship that consumers have with the brands they love today; retailers hope they’ll discover and fall in love with tomorrow. Putting incumbents — wherever they play in this evolving ecosystem — on notice, on the defensive and in some cases out of business.”

In PYMNTS' eternal quest to find answers to these pressing questions, we turned to Molly McCombe, Managing Director and CMO for Citi Retail Services, for her perspective on the changing consumer path to purchase — and how merchants can stay relevant as the commerce ecosystem continues to expand exponentially.

Turning Shoppers Into Buyers (And Returning Buyers)


So how can retailers — in the face of this new environment — turn shoppers into buyers?

The answer at first glance seems surprisingly zen. There is no right answer, though according to McCombe — there are many potentially correct solutions.

"I don't think there is going to be one winning path or one killer app. Consumers are smart. Based on what they are purchasing, the conditions under which they are purchasing — their path is going to be dictated by what they need. I think this is what makes it such an exciting time in the retail industry," said McCombe, who moderated the Consumer Path To Purchase panel at R2.

That path these days leads through many territories that even just 10 years ago didn’t exist. Social media and networks are a force to be reckoned with — particularly when guiding consumers preferences — and mobile devices have rendered consumers more knowledgeable and connected to various choices than they ever have been.

"I think the art and the trick to really being successful now is having table stakes across a bunch of those different capabilities,” McCombe told PYMNTS. “You need to be where and when the consumer wants to make their purchase.”

And, merchants need to realize that those “wheres” and “whens” are increasingly becoming “wherevers,” and “whenevers” for increasing share of the consumer population. In that environment, it is no longer possible to drive consumers to a unidirectional path to purchase – because there is literally no therethere anymore.

"Now, the path to purchase is all over the place — whether it's influenced by social, you're able to shop on your handheld device. I think the art and the trick to really being successful now is having table stakes across a bunch of those different capabilities. So you need to be there where and when the consumer wants to make their purchase, rather than driving a very unidirectional path to purchase. I think these elements will work together to help drive better service for consumers and consumers are going to continue to demand both convenience, variety and transparency around the products that they purchase," McCombe said.

Checkpoints Along The Path


In an option-rich environment, unsurprisingly the consumer path to purchase has plenty of points where it can easily derail. And this, McCombe noted, is the central challenge for merchants, issuers and payment networks: figuring out how to keep shoppers on track and moving toward buying, instead of wandering off into the digital weeds.

And that is not an easy task. Endless distractions and ways to halt, or abandon, those online purchases, mean that preserving the bottom line in the reinvented retail environment means understanding how consumers discover, deliberate, and ultimately decide what they are going to buy.

"Everyone is really working hard to figure out how can you characterize that change in the path to purchase. And where there are opportunities to provide additional better customer experience and reduce the amount of friction between researching a product, or identifying product as something you want, to see all the way through to buying and paying for it and getting it in hand," McCombe explained. "And all of the things that happen after the purchase in terms of whether it's comments on social media, or follow-on purchases. It seemed like there was a lot of agreement [on the panel] that there has been a pretty dramatic change in the past couple years in the path to purchase."

The consumer relationship with merchants, McCombe noted, is both more complex and longer than it ever has been. It is not about the short path of decision or determination about a product to purchase at POS these days. It is about participating at all points in the commerce lifecycle, and figuring how to engage the consumer base at every point along the way.

Engagement And The Path To Purchase


Engagement is no longer an in-store phenomenon, and retailers should instead explore how they can be constantly engaging consumers — but in way that feels helpful, instead of oppressive.

This means attempting generic, “one-size fits all” approaches are pretty much dead in the water, as consumer expectation levels have simply evolved too far past that point.  

"We and our retailers recognize now that more people are researching the product not necessarily in the store, but from another location using their tablet or mobile device," McCombe said. "They may also be researching and looking for information or recommendations on their mobile device while they are in the store.

"We want to be able to leverage the convenience and the ease with which people can research products and look at advice on their mobile device. And be able to present content, whether it's marketing materials related to certain products, whether it's the credit application process, whether it's a widget that we might have on our site that helps people understand what the payment options might be."

Not everything will work for every consumer — some will be swayed by payments, other rewards, some other marketing materials and expanded content. But the through thread in all these attempt is find a space where retailers leverage all the technology in the market to create better ROIs — and a strategy flexible enough to handle the wayward preference of the super-connected and informed consumer.  

"I think the future is here. The art for retailers to be successful in this new path-to-purchase world that we are in is to embrace all of the different opportunities that retailers have to interact with current and prospective customers. Whether it's mobile, social, integrating with different apps," McCombe said.

"This is really an opportunity to embrace that change. There is a lot of transparency that consumers provide on social sites in respect to other products. I think that retailers can use that transparency to understand better consumer needs and again meet them where and when they want to be communicated with."

The old path was simpler, and may leave some in the ecosystem pining for the path to purchase that has passed, simple, unitary and easily managed.

But, McCombe noted, that sacrifice with that simplicity was opportunity — both for merchants and for consumers. Moreover, she noted, that new complexities are a fair price to pay for the potential richness of opportunity out there for all of the players in the market.  

"I think it actually provides a tremendous opportunity. I think it's a pretty exciting time to be in the retail space," McCombe said.

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