By Paula Courtney, CEO.
It’s an exciting time to be immersed in the cutting-edge world of retail technology and the perennial challenge of better engaging with customers. I was reminded of this recently when I attended the annual CEO summit hosted by the Wharton School’s Baker Retailing Center.
The daylong conference, attended by thought leaders from around the globe, tackled at least six areas where the retail technology landscape is evolving at breakneck speed. Here’s just some of what I took away:
- Rental is going mainstream.
Businesses like Airbnb and Uber opened our eyes to the potential of renting things we never considered worth renting. This new shared economy, along with a greater demand for sustainability and the cultural and economic realities of being a Millennial or Gen Zer, is now moving headlong into fashion. Much has been written about young people’s desire for experiences over material things and apparel rental fits the bill – why continue buying clothes to wear a handful of times before they’re donated to Goodwill, shipped to Africa or end up in landfills? Do fashion rentals mean the end of owning clothes? Is this phenomenon an opportunity for long-term subscriptions with customers? And will renting over buying wreak havoc on manufacturing supply chains? Stay tuned.
- The need for speed.
It seems like only yesterday Amazon Prime impressed us with next-day delivery but apparently that’s no longer fast enough. In markets like New York – and you can bet wherever you live soon enough – same-day or even same-hour delivery is becoming more commonplace. And if that weren’t quite fast enough, a Walmart pilot program is outfitting seasoned sales associates with body cams so you can watch them deliver groceries straight to your fridge and freezer. Also on the docket is auto-delivery – cameras in your fridge that use algorithms to figure out before you do when you’re due for more milk, eggs or Ben & Jerry’s. It’s all great for increasingly impatient customers but what about your average non-hundred-billion-dollar retailer that’s trying to compete? After all, the reality is the last best experience you have anywhere is your new minimum expectation everywhere. The pressure will only increase – can small and mid-sized businesses keep up?
- AI and AR in retail.
Artificial intelligence and augmented reality in retail technology are nothing new in the retail product cycle but they’re gaining more visibility and increasingly infiltrating our buying experiences. You’ve noticed this, of course in small ways – for instance, you Google searching Adidas runners on your phone only to find ads immediately popping up for the same shoes on your Instagram feed. It’s an effective way to get customers’ attention and dollars but the implications for privacy and building relationships aren’t fully understood.
- How to hire.
There’s a huge debate brewing on what skill sets to hire for in our new tech-enabled retail economy. Do solid retail and social interaction skills still matter? Or do technology skills take precedence? The reality is building a team that’s ready for our new retail reality probably requires a good balance of both. Whatever that is, businesses need to take a hard look at what they need and hire for it pronto.
- Customers are multi-channel (duh).
WisePlum, a Verde Group company reported on this last year in a study we conducted with the Retail Council of Canada and Google Canada but it begs repeating: the death of brick and mortar retail has been exaggerated and the reality is customers want and expect both online and in-store experiences. According to our research, 61% of customers did at least one online activity before making an in-store purchase and, conversely, 65% performed at least one offline activity, like going in-store to browse, before buying online. In other words, there’s no clear trend at the moment and successful retailers will need to excel in all channels for the foreseeable future.
- Lifetime value makes a comeback.
This is also old news to us but it’s still gratifying to see retail thought leaders talking about it: serious retailers are increasingly moving away from a transactional view of customers and reigniting their focus on lifetime value and relationship equity. With the internet and social media so cluttered with chatter, it’s crucial that retailers keep a constant conversation going to ensure they remain not just front and center with customers, but different and relevant too. AI and AR will play a role here too as the data this technology gathers helps retailers engage and drive bigger and more meaningful conversations with customers.
The bottom line?
Where once upon a time the retail environment was simply about ringing in a sale and saying thank you, technology and our relentless social and cultural evolution have dramatically upped the ante on what customers expect. The challenges for tomorrow’s successful retailers are huge – but so are the potential rewards.