Maybe consumers tried contactless shopping for everything from groceries to automobiles in 2020 because it felt safe. Maybe they got hooked on 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 once again.
Whatever the reason, contactless shopping remains a priority for some shoppers, whether it's for cars, groceries, fast food or department store goods, said digital experience leaders from Instacart, Target, General Motors and McDonald's during a CES 2022 conference panel on e-commerce trends. Yet some consumers want the pre-2020 shopping methods restored. Successful companies will have to accommodate all of them in their e-commerce operations, said Edward Kummer, chief digital officer at automaker GM.
For GM, that means customers typically arrive at the auto dealership more educated than ever, with web research on the vehicles they're interested in. It also means that some will want instant gratification and drive away with a new car -- so when the automaker can prepare documentation digitally in advance, it improves customer experience.
"I think you're going to see a lot still going on in the dealership," Kummer said, "but people are going to choose to buy and interact how they want to -- I think that's what that's what we're going to see."
McDonald's had built contactless delivery infrastructure decades ago with its drive-through pickup windows, said Tariq Hassan, McDonald's chief marketing officer. The operations problems 2020 posed were maintaining speed, accuracy and convenience in delivering orders, despite staffing shortfalls and supply-chain disruptions.
On the marketing side, engaging customers digitally to get them to order food at the drive-through became the problem to solve. Part of McDonald's strategy to build engagement included influencer marketing meal "collabs," or 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 said has attracted tens of millions of customers so far. As loyalists buy food, they accumulate points that can be cashed in for freebies.
"We're still doing some great work, 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-branded meals and campaigns reveal a shift in marketers' thinking, said Jordan Jewell, an IDC analyst. Advertising and marketing budgets revolved around events such as the Super Bowl or holidays. Now, more sophisticated data and analytics can drive personalized offers to individual customers, and these new campaigns don't need a special event to activate.
"It's about flipping that mentality of who you're advertising for -- being more focused on the person or the consumer or business customer," Jewell said. "Advertising historically has had very questionable returns, particularly on more analog channels. Digital is a lot more reactive. You can actually see the response when you invest more."
Instacart, Target unlock digital growth
Instacart's sales increased 229% in 2020 compared to 2019; the site handles 1 in 5 U.S. e-commerce grocery orders. Holding that ground has become the company's top priority, said Asha Sharma, Instacart chief operating officer. In 2021, the goal was getting a delivery in 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 orders and catering, automation and payments software. It also will require new logistics processes including what Sharma called Instacart "micro fulfillment centers" at grocery retailers.
Building infrastructure to meet these new goals might be a challenge, but it probably won't be as hard as the explosive growth of 2020.
"I think we're always building the plane as we're flying it, and we love that," Sharma said. "Our business has been very affected by COVID, and that can happen on a day-to-day basis. A storm can happen on a week-to-week basis. The business is different every single day."
Asha SharmaCOO, Instacart
Target, which built its own IT infrastructure and many applications, rebuilt its digital experiences in the months leading up to 2020. That technology fueled growth measured in the billions in 2020 as competitors played catch-up. Its digital marketing strategy has moved in recent years from an episodic strategy to a more sophisticated, always-on campaign, said Cara Sylvester, Target's executive vice president, chief marketing officer and chief digital officer. One example: In the past, Target may have launched campaigns specific to Black History Month. Now, Target highlights Black-owned brands year-round on its apps and sites.
"While [diversity, equity and inclusion] has always been part of our agenda at Target, I would tell you [that] digital acceleration has just expanded our reach and our 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 toward merchandise as well as have a voice in directing Target's local giving.
Such programs are interesting, IDC's Jewell said, but what's potentially more effective in building business on the e-commerce side are programs that attract more than a company's most die-hard fans.
"When I think about McDonald's or Starbucks and how they're investing in digital loyalty programs, I kind of wonder, what's the next step of that?" Jewell said. "How are you building these digital programs for those less loyal customers? How are they going to get new customers, because that's really what they need to do if they want to continue to expand digitally?"
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget.