Over the last 10 years the retail industry has been radically transformed. Whether retailers are ready for it or not, consumers have become hooked on the real-time, personalized world. Consumers expect to get what they want, when they want 24/7. They also expect to be able to order, return and browse in the channel of their choice: online, in store, chat, mobile app etc.
Retailers are no longer selling things. They’re selling the experience of buying those things and adding additional information and services around those products. This has dramatically changed the experience of buying, owning, and returning merchandise. The team at SuiteCX has been working with retailers for more than 20 years, helping them to navigate this changing environment and gain a competitive advantage through customer excellence.
Disruptions in the Industry
Remember when it was exciting to be able to go into a store and be able to check out anywhere using a mobile tablet? Now that seems as old school as paying for your items with cash. Companies like Amazon Go enable customers to purchase items without checking out at all.
Today mobile devices enable the consumer to find the product they want, or compare it to other products and see reviews from other consumers. Consumers can use their cell phones in store to comparison shop at other retailers as well and expect the store they are in to match the prices they find online.
Mobile enables smart sales associates to suggest alternative products, help consumers find the product in their size, and enable consumers to have the product delivered to their home or arrange for pick up in store.
2. Big Data/Personalization/ Artificial Intelligence
Consumers expect that retailers will know who they are across channels. They want to be able to start the transaction in one channel and finish it in another. Many times this is browsing online and purchasing in store or vice versa. The expectation is the retailer knows who they are and can provide them with intelligent personalized offers at the right time and the right place.
This requires data capture, identity management and real-time data collection. Retailers are using artificial intelligence to understand their customers’ personal preferences and anticipate their needs and purchases and find exactly what they want. Today retail is all about personalization and AI is the powerhouse that recommends products you might like to try … sends coupons for things you’ve already purchased … and redesigns web home pages based on user social media profiles. AI can reward customers for loyalty as soon as they click “buy now” and can remember what they own if they want to repeat the purchase in the future or if they need the right accessory.
3. Augmented Reality /Virtual Reality
Consumers and retail management can use virtual reality glasses to experience a product or service in a new environment. They can “walk around” in other environments to see if they might like the new “store” concept or shelf layouts and signage better. Consumers use augmented reality to help them experience a product or service without actually touching it.
Most retailers are using AR to show how the products look in their home (what size TV do I need?) or smart mirrors for clothing, makeup and eye glasses (What does this look like on me?). Not only is it faster and easier—it’s fun for the customer, and one more way to get him or her in the digital or physical door.
4. IoT-Internet of Things
Consumers can interact with the IoT through wristbands and mobile devices. The data that is being produced from our “Things” will become high impact consumption data that retailers will be able to utilize to personalize shopping experiences and put the right products in front of the right people at the right time. Retailers are using the IoT to monitor their in-store inventory to be sure they don’t run out of high demand products. It also is being used to create digital in-store signage and can provide a different information depending on who is looking at the sign.
5. Smart Beacons
Smart beacons work with Bluetooth to alert retailers when customers are in the vicinity of their store or signage so they can communicate with them at a targeted time or range. In fact, smart beacons take targeted marketing to a whole new level. What better time to send a customer a coupon or discount code than when they’re standing outside your door?
Smart beacons also allow for immediate data collection to determine the effectiveness of one’s marketing campaign. Do promos usually work better at a certain time of day? Among certain age groups? With certain product types? With smart beacons, retailers no longer have to guess—or devote tons of time, money, or analysis—to finding the answer.
What does this mean for Retailers?
Retailers will continue to struggle with an “omni channel” existence, trying to determine the perfect balance of physical presence and digital touch. It’s not a new problem, but it’s one that will continue to evolve in challenging and exciting ways as the digital transformation continues to unfold. All of this is being done in the name of customer experience, which Forrester believes to be “one of the top 10 critical success factors determining who will win and who will fail in the age of the customer.”
What are the critical areas:
- Shared ownership of the Omni-channel Experience. In order for omni-channel to be successful retailers will need to coordinate sales, service and operations and do it in real time. It’s not about physical stores and ecommerce –it needs to be both. Digital disruption is here and we need to adapt. Consumers expect convenience and low prices and this can’t be delivered without all the organizational silos working together. Retailers must understand the buyer journey in order to understand what is needed and to make best decisions to fix what is broken and reinvent the customer experience.
- Investment in data and Technology. Making omni-channel work requires a significant investment in data, analytics and machine learning. This takes time, money and specialized skill sets. It may mean a new POS system, improvement in the supply chain, better integration of customer data from in store and on line, virtual reality, IoT, etc. Retailers will need a data and technology roadmap to help direct future investments where they will make the most difference.
- Change in mindset. Change will be continuous. Retailers will need to pick up on new trends, try new products, invent new services, try new store designs etc. Change needs to be part of a “planned” process of design thinking and testing. You won’t find success without failures so companies need to see failures as a stepping stone to future success –not something to be avoided.
- New types of talent. In the old days the merchants were the kings. They helped retailers establish their brand promise and be successful. Now, the analytics and innovation talent is what is going to help the best retailers get ahead and succeed. There is a need to create more engaging customer experiences and this will require content, analytics, sales associates training, social media experts and strategic planning. Buyers alone can’t make this happen.
What are you doing to get prepared?
It’s obvious you can’t sit still and wait. You need to act now. There are 3 methods to figure out what to do:
Plan A: you’ve started down the path and have senior management buy-in but you don’t have the right resources to get you across the finish line.
Solution A: hire consultants to act as experts or staff augmentation to move you along. That way if you have specialized skill sets but don’t need for long periods of time you can utilize them and move forward quickly. Focus on something small you know can be fixed and document your progress. Use this as a starting point to get more funding and to get senior management and Board of Director’s attention. The Board is interested in profits and the key to success is Customer Experience. Show everyone how they are linked and what you are doing to make it happen.
Plan B: You don’t have a detailed plan in place, much less the funding and commitment to make it happen. You will be held accountable for results but you aren’t set up for success. So, it’s only a matter of time before the C suite starts asking questions and possibly deciding just like they did at Coke that in fact they really don’t need a CMO or even a CX executive.
Solution B: Get a plan in place to start working on the problems. Begin with your journey mapping for the most important customers. Get a plan that looks at the technology, process, and talent you will need to move forward and present a multi-year plan to management so you can get funding and buy-in. In the meantime fix the low hanging fruit so you have some “extra” money to experiment. Then document your findings – the base state, the improvements you have made with a limited budget and what things could look like if you actually got more resources and were able to get a cross-functional team with governance in place. Show how you compare to the other competitors to make sure everyone knows you are serious about longer term growth and concerned that without more resources you might not be able to get there.
Plan C: You are moving along and have plans in place but where to focus?
Solution C: focus on emerging shopping trends, and evolving customer wants, needs and desired. Focus on what is most important to your loyal and most valuable customers.
Enable your customers to co-create and share their ideas for new products and services. Let them react through social media to real-time changes. Get your business partners on board so they can also work with customers to make the change.
Use advanced analytics and machine learning to provide contextually relevant messages. This will require using CRM, cloud storage, and identity management to leverage the insights across all the touch-points within the customer lifecycle to personalize the customer’s path to purchase.
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