Beyond the apocalypse
- Sunday, December 30th, 2018
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In the latest in our series of predictions pieces running between Christmas and the New Year, Amitaabh Malhotra, CMO of Omnyway, says it’s time for the retail industry to put a bad couple of years behind it, and embrace social, AR and personsalisation in order to move forward.
November and December are filled with pushes and predictions around holiday spending for retailers, but over the past few years, it’s also been a time to catalogue the wave of brick-and-mortar closures and wonder about the future of the industry. Commercial real estate firm Cushman & Wakefield forecast that more than 12,000 stores would shutter in 2018, and from Toys ‘R’ Us to Gap, retail closures have occurred at a rapid rate.
The companies that haven’t wrapped their heads around how digital transformation is taking over their segment of the business are disappearing. The grace period is over. For instance, look at Sears, which focused heavily on building an online marketplace along the lines of Amazon. The problem? This moved Sears away from its core business and didn’t actually improve the shopping experience for its customers. The company continues to struggle, while trying to restructure in bankruptcy. In contrast, Walmart and Best Buy have survived by identifying ways to stay relevant and using shopper-focused technology to enhance the shopping experience.
Faced with these cautionary tales, the retailers left standing are thinking intensely about what it takes to survive in the new, digital world. It might sound dramatic, but the message seems to be “innovate or die.” This is why retailers are going to invest heavily in new technologies and explore ways to blend online and offline experiences in 2019. The retailers that thrive will be those that address specific customer pain points, as opposed to implementing technology just for the sake of it. We will also see a lot of “test and learn” implementations on some of the newer technologies that aren’t quite ready for mainstream deployment.
Here are my five retail technology trends to look for in 2019.
Personalisation is going to be a key theme next year, in terms of the mix of products, the retail experience, and how interactions and engagement take place. Personalisation is now the expectation, not the exception. Customers want experiences tailored to their preferences, rather than those that are one-size-fits all.
Smart retailers with a well-defined mobile and social presence have access to a wealth of data about their shoppers, and will use this to further curate the shopping experience for their customers. Amazon has excelled at this with eCommerce, and other retailers are quickly catching up and will increasingly look for ways to target shoppers with a wide variety of personalised options that can span from product bundles and custom looks to individualized pricing and offers. Mobile devices are a valuable channel for delivering personalized content to shoppers at the moment when it can have the greatest impact – be it online or offline in physical stores.
Options and flexibility
Another way to think of personalization is in terms of expanding options. Some customers like to shop online and pick up in-store, while others prefer the inverse. Others still vary their preferences depending on the situation. In 2019, retailers will embrace tools that enable customers to customize their checkout experience and shop across channels. Again, it’s all about improving the customer experience. A customer who buys online and picks it up in store doesn’t want to wait in a long line, and they certainly don’t want to wait in two lines if they need to pick up a purchase and do additional shopping. Features like multichannel virtual carts, which makes it easy for customers to add items to their cart while in any retail channel, are key to delivering on the full-promise of blended retail experiences.
Social commerce and influencer-led buying
The rise of social media influencers is nothing new, but in 2019, this trend will hit an inflection point. 70 per cent of millennial consumers are influenced by the recommendations of their peers in buying decisions, according to a survey conducted by Collective Bias, and non-celebrity bloggers are 10x more likely to influence an in-store purchase than celebrities. A campaign that seems as simple as an influencer mentioning a retailer in an Instagram post can have an explosive effect. H&M, for example, has excelled at leveraging influencer marketing to its advantage.
In addition, social platforms are highly effective at segmenting and targeting users with offers, incentives, and promos. They are a powerful way for retailers to get in front of new customers. Over the next year, more and more retailers will experiment with features that allow customers to buy within their favourite social apps.
While the three trends outlined above are ready for prime time, augmented reality (AR) technology is still very much in the “test and learn” phase. A few forward-thinking companies are already exploring what AR can do, but in an experimental, small-scale way. Lacoste, Sephora, and Magnolia Market all tried out AR-based tools such as virtual fitting rooms in 2018, and we can expect to see more in this vein in 2019.
More than 90 per cent of shoppers already use smartphones while shopping. Both dominant mobile OS players, Apple and Android, have made significant investments in enabling AR on these mobile devices. AR is an opportunity for retailers to deliver aspects of the online shopping experience to customers while they are in store. With AR, product shelves can come to life and extend the level of interaction offered. Not only can it be used to receive in-depth information about the product, as well as reviews and social content from friends, but it can also include personalized offers, pricing, bundles, financing and payment options, promotions, and third-party rewards.
Smaller store footprints
On a macro-level, we predict that some stability will come back to the retail industry in 2019. The newer players that emerged during the downturn will continue to grow, while some of the biggest retailers are gone for good. There will likely be economic headwinds that impact retailers and fuel other trends, such as smaller store footprints, which will lead to the reduction of in-store inventory. This, in turn, leads to a larger reliance on online inventory and virtual aisles, with robust shipping options to supplement. Moving forward, stores are going to serve more as experience centers, rather than places a customer goes to buy something.
With the retail apocalypse of the last two years in the rear view, it’s time to get up, brush off old habits, and start planning for the year ahead. It’s time to think strategically about how technology can supercharge your business by enhancing customer experiences, while keeping true to the unique experience that your brand offers to its loyal shoppers.