2018 retail technology predictions part 2
“With online sales growth slowing and stores struggling to maintain sales parity, it’s more important than ever that retailers develop a single view of the customer in order to drive behaviour and take advantage of a significant percentage of customers who want a multi-channel experience. Consumer confidence is clearly on the wane. In October, GFK research forecast consumer confidence to have slipped from -9 to -10. Trading economics are forecasting -12 for the last two months and into 2018. This will drive more caution when it comes to discretionary spend.
Despite the headwinds, there will be winners. Value retail will take on even greater significance over the next year, as consumers tighten their belts, while at the other extreme, luxury brands will quite likely weather the storm. In part buoyed by the continual influx of tourist shoppers from the Far East. Those with the biggest challenge in the year ahead will be the retailers stuck in the middle. Those with a homogenous product and price proposition or a lack of clarity over their value proposition, purpose and relevance. Many of whom also find themselves with too many under-performing stores in their portfolio. For these brands they need to re-think what their customer value proposition is, how they can maintain the relevance of their products and services and move more towards how to extend the lifetime value of customers to their business.
A focus on forward facing KPIs such as customer satisfaction and less on pure commercial KPI’ will helps. If they get the inputs right around customer experience and service, the outputs will take care of themselves. Retailers are also struggling with the cost to serve customers, whose expectations for service levels have been re-set by Amazon, Asos and the likes. This makes the requirement to get closer to existing customers all the more important. From a technology perspective, retailers will be looking to develop a single view of the customer and leverage personalisation tools, so that they can get closer to customers and deliver more relevant products, content and offers, through all channels and touchpoints. AI will continue to play a bigger role in customer engagement while helping retailers to more efficiently and cost-effectively serve customers.” Martin Newman, Founder and Chairman, Practicology
“Admittedly, many brands have ploughed money into integrating technology into their physical stores to compete for footfall. However, it may not have taken off as expected, because many went head first into the investment without ensuring the appropriate back-end infrastructure, or training for sales assistants was in place to make the most of the benefits that in-store technology can bring. There is simply no point in retailers spending huge amounts of money on in-store technology if it does not work properly and nobody knows how to use it.
However, when done well smart stores have the ability to boost the bottom line. High-end retailer, Rebecca Minkoff, saw sales shoot up by more than 200% following the introduction of interactive touchscreens that let shoppers choose products to be sent to their dressing rooms. These dressing rooms also include interactive mirrors that can adjust lighting and contact sales associates. Screens will allow people to view the clothes they are trying on in different colours, sizes and looks, completely personalising the customer experience.
If this decade thus far has taught us anything, it is that technological disruption is unpredictable. Mobile shopping may be the driving force in retail today, but in another decade, virtual and augmented reality could be shaping consumer trends. In retail, as in fashion, no one size will fit all, so retailers must use the data that they have at their fingertips to tailor their services to every individual customer’s preferences.” Scott Clarke, Chief Digital Officer and Global Consulting Leader for Retail, Consumer Goods, Travel and Hospitality, Cognizant
“It has has been a long road to PSD2, given that it was approved in November 2015 by the Council of the European Union. However, it will finally be coming into force in January 2018 and that means that banks must open up their customer data to third parties on request - whether these third parties are their direct competitors, challenger banks or nascent FinTech startups. For everyday consumers, much will change next year due to this. We’ll see a huge increase in banks seeking to become a ‘one-stop shop’ for their customers.
In reality this means that banks will provide wide access to a range of services, from the ability to pay from bank accounts at a touch of a finger to accessing integrated comparison tools to find the best banking deals. Thanks to PSD2, banking as a whole will become much more personalised. The simple fact is that data is now as valuable as gold to financial organisations, and they need to treat it as such.” Sophie Guibaud, VP of European Expansion, Fidor Bank
“Despite shoppers being globally minded, the desire to have links to local regions and buy local products will increase over the next year. This approach will result in retailers selling produce that will only be available for a short period of time, due to seasonality and availability, creating uniqueness and increased shopper desire to get these products when available. This will introduce greater variation for shoppers but create more complexity within the supply chain. As stores aim to rotate produce and range more often there will be greater efficiencies, collaboration and communication within the supply chain.
To achieve a hyperlocal offering, retailers will need to support small and medium-sized producers. This will be positively perceived by shoppers, as it helps them sustain their community and allows them to feel special, to be part of something unique. Industry will need to ensure that the products sold truly reflect the local communities’ tastes and desires, which will require in-depth local insights. Retailers could tie up with local events and traditions to mirror shoppers’ beliefs and values to help build loyalty.” Toby Pickard, IGD’s Innovations and Trends Analyst
“Rich media format (video, AR) will enable more immersive shopping experiences across earned, owned and paid social media, closing the gap between engagement and purchase, with calls to action that pop-up when customers scroll or tap different items in an image or video. The days of an outdated e-commerce environment are coming to an end.” Talkwalker
“Consumers will expect even more value from brands, restaurants and retailers – getting access to relevant savings, convenience and an easy shopping experience. It will be critical that marketers improve consumers’ shopping experiences – online and in-store. This also means they need to have a consumer-centric approach to marketing, blending first party and third party data to reach, engage, influence and activate consumers.” Curtis Tingle, Chief Marketing Officer, Valassis