Maybe consumers tried contactless shopping for everything from groceries to automobiles in 2020 because they felt safe. Perhaps they became addicted to digital conveniences after vaccinations became widely available. Maybe they’re still using it for both reasons as the omicron COVID-19 variant proliferates and many worry about safety again.
No matter the reason, without contact shopping remains a priority for some shoppers, whether it’s cars, groceries, fast food or department store products, said digital experience managers from Instacart, Target, General Motors and McDonald’s at a CES 2022 conference sign on e-commerce trends. Still, some consumers want pre-2020 shopping methods reinstated. Successful companies will need to integrate them all into their e-commerce operations, said Edward Kummer, chief digital officer at automaker GM.
For GM, that means customers generally arrive at the auto dealership more educated than ever, with web searches for the vehicles they’re interested in. It also means that some will want immediate gratification and walk away with a new car. The car manufacturer can prepare the documentation digitally in advance, this improves the customer experience.
“I think you’re still going to see a lot of stuff in the dealership,” Kummer said, “but people are going to choose to buy and interact however they want – I think that’s what we’re going to do. to see.”
McDonald’s had built contactless delivery infrastructure decades ago with its drive-thru pickup windows, said McDonald’s chief marketing officer Tariq Hassan. Operational issues in 2020 were maintaining speed, accuracy and convenience in order delivery, despite understaffing and supply chain disruptions.
On the marketing side, engaging customers digitally to get them to order food at the drive-thru has become the problem to be solved. Part of McDonald’s strategy to build engagement included “collaborations” or influencer marketing meal collaborations with celebrities. So far, the list includes popular musicians such as Saweetie, Travis Scott, J Balvin, and BTS. On the tech stack side, McDonald’s also launched the MyMcDonald’s Rewards loyalty program last July, which the company says has attracted Tens of millions customers so far. As Loyalists buy food, they accumulate points that can be redeemed for gifts.
“We’re still doing a great job unlocking what people love about this food, but using digital [channels] and engagement around that digital to connect with them in very different ways,” Hassan said.
Celebrity meals and campaigns reveal a shift in marketer thinking, said IDC analyst Jordan Jewell. Advertising and marketing budgets revolved around events such as the Super Bowl or holidays. Now, more sophisticated data and analytics can generate personalized offers for individual customers, and these new campaigns don’t need a special event to activate.
“It’s about reversing that mindset of who you advertise — being more focused on the person or the consumer or the business client,” Jewell said. “Advertising has always had very questionable returns, especially on more analog channels. Digital is much more responsive. You can actually see the response when you invest more.”
Instacart, Target unlock digital growth
Instacart sales increased by 229% in 2020 compared to 2019; the site handles 1 in 5 online grocery orders in the United States. Holding that ground has become the company’s top priority, said Asha Sharma, Instacart’s chief operating officer. In 2021, the goal was to get delivery to a customer’s hands within two hours anywhere in North America. This year, the company aims to reduce that to 15-30 minutes. It will take new apps that enable advance ordering and catering, automation and payment software. It will also require new logistics processes, including what Sharma called Instacart’s “micro fulfillment centers” at grocery retailers.
Building infrastructure to meet these new goals could be a challenge, but it probably won’t be as difficult as the explosive growth of 2020.
“I think we’re still building the plane as we fly it, and we like that,” Sharma said. “Our business has been very impacted by COVID, and it can happen day to day. A storm can happen week to week. Business is different every day.”
Asha SharmaCOO, Instagram
target, who builds its own IT infrastructure and numerous applications, rebuilt its digital experiences in the months leading up to 2020. This technology fueled growth measured in billions in 2020 as competitors played catch-up. Its digital marketing strategy has shifted in recent years from an episodic strategy to a more sophisticated, ongoing campaign, said Cara Sylvester, executive vice president, chief marketing officer and chief digital officer at Target. An example: in the past, Target may have launched campaigns specific to Black History Month. Now, Target highlights black-owned brands throughout the year on its apps and sites.
“While [diversity, equity and inclusion] has always been part of our program at Target, I would tell you [that] digital acceleration just expanded our reach and power to drive positive change,” Sylvester said.
Like McDonald’s, Target launched a loyalty program, Target Circle, in 2019. It gives customers a chance to earn credit on merchandise and have a voice in guiding Target’s local donations.
Such programs are great, said IDC’s Jewell, but what’s potentially more effective at growing business on the e-commerce side are programs that attract more than a company’s most die-hard fans.
“When I think of McDonald’s or Starbucks and how they invest in digital loyalty programs, I kind of wonder, what’s next?” said Jewell. “How do you build these digital programs for these less loyal customers? How are they going to attract new customers, because that’s really what they need to do if they want to continue to grow digitally?”
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service, and enabling technologies for TechTarget.