Retail’s Big Show, 2016 – National Retail Federation (NRF), just wrapped up one of the biggest and the most interesting retail shows of the year. From the latest buzz on technology innovations to expert talks on future transformations, the NRF highlighted the top retail trends to look forward to.
In this blog, we bring you the top 3 trends and insights that retailers should leverage:
1. Customer experience will be the epicenter of retail
The rapid rise in the adoption of mobile devices and online commerce has caused significant shifts in customer behaviour. Today’s customer interacts with brands not only in the physical world, but also in the virtual, online space. At NRF 2016, Mike Rodgers, Chief Customer Officer of the American department store JC Penney, reflected on how 69% of the brand’s customers browse online before coming to a store, while 36% use mobile devices while in-store. Thus, retailers today need to ensure that they don’t lose out on customers in the divide between physical stores and e-commerce, by creating seamless, integrated experiences across all channels.
In an interesting example of targeting today’s omni-channel consumer, Marks & Spencer launched its customer-focused Sparks loyalty program in October 2015. The program offered customers rewards for interacting with the brand online or in-store. Once customers collected the “Sparks”, they could then use them for a wide range of benefits; the insights collected through this program were also leveraged to send tailored offers based on customer’s interactions with the brand.
Physical stores should now reinvent themselves to become experience centres. In a study by analytics firm Verint, 52% of customers globally said they liked being offered personalized experiences. Retailers should thus, leverage powerful location based technologies like iBeacon, RFID and IoT among others to create enhanced and tailored experiences. For instance, US game and electronics retailer, Gamestop used beacons to deepen the retailer’s relationship with its customers and provide a more engaging in-store experience. Being up against fierce competition from online stores, Gamestop created a unique experience for shoppers who entered the physical store. As part of this effort, the firm launched a research division known as the GameStop Technology Institute (GTI). Gamestop’s beacon-based solution provides promotional offers and product information to shoppers in the store, who have installed the GTI-developed app on their phones.
Retailers need to strongly channelize their efforts to be part of the customer journey through the online and physical worlds, by creating exciting and personalized customer experiences. As we move forward, retailers will need to explore and invest in intelligent systems and new age technologies like personalized beacon-enabled solutions among others to continue being relevant.
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2. Technology will converge to provide one cohesive solution
Retailers today are leveraging a plethora of exciting new technologies in order to suit the changing needs of the industry. However, an important theme that emerged at the NRF 2016, was how to integrate different technologies, in order to improve the overall efficiency and effectiveness. A large number of retailers today are exploring and investing in innovative technologies like, RFID, beacons, the IoT, 2-D barcodes, big data and predictive analytics, among others. Not only are there an increasing number of retailers leveraging such technologies, but many of them are now looking to collaborate different technologies, in order to create a single holistic solution.
The Acuitas Digital Alliance, is a good example of such integration. This global alliance made by BT, Intel, NexGen Packaging, RetailNext and SATO Global Solutions aims at combining their individual networking, hardware, software, analytics, cloud services and security globally to encourage digital adoption in-store, with the intention of bringing in-store and back-office together seamlessly.
Another interesting example of technology integration can be witnessed with the in-store analytics platform from RetailNext. Unveiled at the NRF 2016, the product integrates sensors, into its cloud-based and on-premise platforms. This new platform is designed to simplify shopper behavior measurement by leveraging sensor fusing video analytics, Bluetooth Low Energy (BLE) and Wi-Fi technologies.
Retailers will need to integrate technology and services, so as to offer one cohesive and seamless solution. Like, in the case of beacons, the hardware which was once used only as a stand alone device, is now getting integrated with other types of retail hardware. Such integration will help retailers to not only reduce the cost and time of installation, but will also lead to an increase in efficiency.
3. Retail value chain will evolve in order to stay relevant
The retail value chain, that we see today, is expected to evolve as we move forward. We can already see that traditional stores are being re-designed and re-purposed. It is also observed that distribution, manufacturing and sourcing processes are increasingly leveraging technology today.
According to Capgemini’s, global consumer products and retail engagement lead, Kees Jacobs – “The industry, will transition away from linear, sequential value chains—where products are transferred through sourcing, manufacturing, distribution, and retailing to the customer—towards a new model”. Companies will have to re-design their operations around consumers, working to provide them with new flows of information, products, transactions and experiences.
At the NRF 2016, Disney explained how it re-designed its in-store operations process, in order to keep up with the success of online commerce. Disney undertook development initiatives for its staff members (or cast members, as Disney calls them) and trained them on how to use technology and become more successful on the front lines. As a part of this move, staff were provided with tablet devices to help them better serve the customers in the store. Disney also used bonus plan incentives to help cast members embrace online using the tablet devices to sell the extended range on the shop floor.
Retailers should strive to remove constraints in their operations and take advantage of business models that leverage new technologies. Good examples of such implementation are, drones or driverless vehicles for transportation; 3-D printing devices; augmented reality; and Big Data analytics. Moving ahead, retailers should also aim at cultivating long-term growth, by focusing on sustainability, transparency, and gaining customer trust.
From dialogues with industry experts to experiences from leading brands to showcasing of the latest technology innovations, the NRF 2016 signalled very exciting times for the retail industry this year. As we move ahead, retailers should ensure that they constantly align themselves to meet the changing needs and patterns of customers by tapping into technology and innovating processes from end to end.