Over the last decade, we have seen an incredible amount of technological growth across nearly every industry. Retail tech is changing the way consumers shop, and the way store owners conduct business. As a global economy, we are shifting away from a “seller-centric” mindset and moving deeper and deeper into a “buyer-centric” world. This means the focus is more on the consumer and on improving the buying process each step of the way.
There is no sign of technology slowing down, and during 2019-2020 we expect to see this “buyer-centric” mentality take center stage in our retail economy.
AI is nothing new to the retail community as we have seen a dramatic growth in computer technology taking over the routine and simple jobs of many employers across the country.Artificial intelligence refers to the smart machines that speak, act, comprehend, and learn to allow them to accomplish more in a shorter amount of time than humans.
There has not only been a moral dilemma surrounding AI but an economic one as well. Many companies struggle to see the return on investment with AI because the data is inflexible and there is no history to back up that data.
That said, AI has its advantages over humans by being available all the time, providing faster service, and engaging without emotion unless programmed to do so.
In the years to come, we expect to see an even bigger shift towards emotional intelligence which allows the AI to relate to a consumers needs based on their ability to listen and understand the consumer and make a unique suggestion.
Technological disruptions and the growth of e-commerce is forcing retailers to take on an omni channel sales approach. It is said that omni channel customers spend 15-30% more than a single channel customer.
This approach refers to a business's ability to sell across multiple platforms. We are seeing that retailers who focused entirely on brick and mortar locations are now selling their products online and developing shipping procedures to reduce cost and lengthy shipping times. This is necessary for small retailers to compete with giants like Amazon and Walmart.
Something we have noticed more recently is cross omni channel retail where you can search online for something to see if it is available in-store and reserve it for pickup when you go in.Being able to receive this type of information without having to pick up the phone or drive to the store allows businesses to decrease their labor costs and it provides a smoother sales process for the consumer. We expect over the next couple of years to find retailers utilizing digital touch points like text messaging for marketing. We’ll also see more in-store touch points like interactive shopping and smart shelf technology. Once again, this reduces the need for a human employee while seamlessly improving the shopping experience.
For decades we considered a pop-up store a lemonade stand. Pop-ups are allowing small retailers and even individual salespeople to grow a scale a business without ever having a physical location. This type of “boutique” sales strategy has caught the attention of large retailers and even supermarkets that are now leasing out small sections of their stores for other businesses to occupy on a rolling schedule. Macy’s was the first to coin the term “pop-up marketplace.
”We’re not sure if it’s a good thing or the last shot at preventing the retailer from joining the restof the crowd in history.
Pop-up stores further the notion of a “buyer-centric” society because they allow consumers to touch, feel, and see something before they make that purchase. With the rapid growth of e-commerce, we have lost touch with reliable purchasing, and we tend to buy something because it looks good in pictures blindly. This advancement also gives a significant advantage to new products that consumers are not familiar with.
Retail tech is not all about the consumer. It has a significant impact on the retailer as well by providing more data than most would ever need. Having the right data allows retailers to forecast sales, manage inventory, monitor labor, and much more.
Beyond the simple data metrics we’ve had for a while we’re also gaining more information about our shoppers through personal shopper data and immersive shopping experience. It’s more important than ever to truly understand your consumer so you can create an experience unique to them. That is one of the major advantages brick, and mortar retail has over e-commerce and it always will. Retailers have the opportunity to create an experience when someone walks into their store, and if they understand their consumer, they’ll have a better chance at doing that.
There once was a time where retailers had an IT department that handled all of their analytics and they received a report once a month and used it to soak up the rim under their coffee cup.Today retailers are more in touch with their analytics, and they have a stronger desire to understand the data behind it.
We have more advanced tactics like customer segmentation, scoring, and operational forecasting. These metrics better prepare retailers for upcoming promotions and busy seasons.In the modern world, data drives business, and it is now affordable for even the smallest local businesses to jump on board.
Blockchain allows transactions of digital currency free from fees and traditional methods of tracking. For years, retailers and big business have been trying to find a way to implement blockchain and cryptocurrency into their business practice with little to show for it.
The reason why Bitcoin gathers so much attention is that it allows bypassing so many fee-ridden services that take a percentage of every sale. There is a lot of potentials here, but the consumer market is not entirely on board with crypto yet either. The process of opening a digital wallet and loading it with cryptocurrency is complicated and transferring money through the blockchain is unreliable, but we expect to see this topic become a common point of discussion in 2019-2020.
"The only constant in life is change" - Herodotus
It is more obvious now, than ever before, that large incumbents need to move away from 20th Century management thinking, and embrace concepts like rapid experimentation, small multidisciplinary teams, commitment over consensus, and radical transparency, in order to survive.
Yesterday’s mantras, where the highest paid person’s opinion was the only one that mattered, won’t cut it.
If we want to avoid the retail graveyard, we must first channel Socrates and concede that the more we know, the more we know nothing, and that the only way to learn what we need to learn in order to make the decisions that will move us forward, is by doing away with office politics–often stemming from insecurity and self-interest–and experimenting, fast.
To the brave go the spoils.
To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.