NRF 2019, or Retail’s Big Show as it’s known in the industry, was as always packed with key innovations and keynote speakers looking at where the industry is headed and the technologies and consumer trends guiding the way.
While the event was packed with everything from shelf-stacking drones and Bitcoin ATMs to robot waiters and virtual reality solutions for training in-store associates, the topics that had everyone talking were AI, personalization, data transparency and the challenges of delivering a seamless experience across all retail channels.
The retail industry has been quick to realize the possibilities of AI. According to Capgemini, global annual spending on AI by retailers will surpass $7.3 billion by 2022.
“It is an exciting and transformative time in retail, the likes of which we haven’t seen before,” said Terry Turner, president, North American Retail, for software company JDA. “There is a massive opportunity for retailers to take advantage of the latest AI and ML [machine learning] technologies to optimize pricing, predict and shape demand, deliver more accurate forecasts and labor strategies and ultimately, increase sales and margins.”
And as IBM made clear, retailers have already gotten the message. It presented a study based on interviews with 1,900 U.S retail and consumer product executives which revealed that within the next two years, 79 percent of U.S. retailers will be employing AI for customer intelligence and 75 percent for marketing, advertising and campaign management.
Luq Niazi, global managing director of Consumer Industries for IBM declared that the AI revolution in retail is already a reality.
“[It] is driving new ways to deliver superior customer service and personalization for a consumer of one,” said Niazi. “It’s driving new ways to drive agility and effective decision-making across the entirety of the enterprise.”
However, without access to data, any AI implementation will come up short. And this was one of the major talking points of the event, how retailers can collect the data they need from consumers to meet their expectations, while still retaining their trust.
Customers are more and more focused on corporate responsibility and transparency when making purchasing decisions, yet at the same time want to feel the brands they like really know them — and this creates a predicament for retailers.
“Customers want a more personalized experience,” explained Lori Mitchell-Keller, Co-President, SAP Industries. “But not the creepy ‘I know all about you’ experience.” Yet retailers need enough data to be able to in Mitchell-Keller’s words, “make promises to a customer and keep those promises.”
With insights gained from a full 360°view of the customer, retailers can not only make accurate recommendations and better target marketing and messaging, they can manage inventory, improve supply chain and maximize physical store space. But how do retailers harvest that data without alienating consumers?
The solution, according to Tony Drokton, founder and CEO of Hammitt Handbags is to be honest.
“Don’t be embarrassed if you’re using a beacon, or ashamed if you’re tracking” Drokton said. “Follow the European [GDPR] standards and let them know.”
But go further than putting up a disclaimer on a website or notices in store. “Tell them the value of it: If they buy online [tracking technology] can make the pick-up in store seamless and avoid bottlenecks,” he elaborated. “You’re providing them with a service and saving them time which is what the customer wants.”
As Kristin Simonini, VP of Product at digital experience crowdtesting organization Applause explained during her day one session, Five Secrets to Omnichannel and Retail Success, all retail brands have woken up to the importance of providing a seamless brand experience. However, they’re struggling to make omnichannel reality.
“[Consumers] bounce around channels and touchpoints at will, and expect them all to be consistent and integrated,” she said. “If they’re not, consumers can grow frustrated with the buying experience and bring their business elsewhere.”
In particular, brands are overlooking the fact that the in-store experience should be treated and tested – from layout to staff training – just like any digital channel and that the mobile experience has to dazzle.
“Poor quality [mobile experience] can directly impact a retailer’s bottom line, especially when the experience occurs during the purchase process,” said Simonini. “U.S. retailers alone lose an estimated $24 billion in revenue due to poor mobile experiences each year, according to Hobson & Company.”
But as well as potentially losing customers to another online storefront, getting digital wrong can reduce footfall in physical stores, too according to digital performance company Riverbed, which surveyed 3,000 consumers for this year’s event. The study of U.S., Australian and German shoppers revealed that for 89 percent of consumers a positive digital experience has as great an impact on brand loyalty as prices and that 79 percent believe physical retailers only have three years left to get their digital experience right if they want to continue to attract shoppers.
As for what consumers expect from a mobile experience, the top answer is a site or app that loads quickly (57 percent), but coupons are also important (45 percent), a click and collect service (43 percent) and fast access to customer service live chat (36 percent).
“It’s essential to provide consumers with engaging online and in-store digital experiences,” said Subbu Iyer, SVP and CMO, Riverbed Technology “This doesn’t mean retailers must invest in every new technology that comes along, but they do need to find the sweet spot that lives at the intersection of technology and consumer expectations.”
It is also a topic that Sucharita Kodali, vice president and principal analyst at Forrester Research zeroed in on during her State of Retail Innovation 2019 presentation. Forrester has been talking to U.S. retailers and they’re focused on taking innovative steps to improving personalization, removing friction from the mobile experience and getting omnichannel right. But, she warned, in each case, “It’s a journey, not a destination. It can take years for brands to perfect the omnichannel experience for customers.”
Therefore to continue making the connection with consumers, retailers must continue to make investments to improve their capabilities.
“Even though U.S. retailers are expected to report a successful 2018, there is renewed uncertainty in the industry as we move into 2019. This could lead companies to be cautious in terms of investment and expenditure,” said Mike Small, Chief Client Officer for Sitel Group Americas. “However, spending on AI, data management and improving omnichannel capabilities are all areas that can add to the bottom line through business efficiencies, better marketing spend and a superior customer experience. It’s crucial that retailers identify the right implementation partners that can help them make the most of these investments.”
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