Mixed reality, Internet of Things and advanced analytics are shaking up the retail industry. Is your business ready?
Retailers today face a market drastically different than the one they navigated 10 years ago. Millennial shoppers are a core demographic, shoppers browse aisles – and their phones. And customers expect more personalized communication and service.
While cynics may fear the future of retail, industry insiders know the key to maintaining a competitive edge is technology. It's the catalyst for getting consumers into stores, the brains behind every interaction, and it shapes every angle of the customer experience.
Front and center in all of this: the chief information officer, or CIO. A recent Forrester report on the state of the customer experience notes that, "There has not been a time when technology has had a more profound impact on customer experience and revenue performance. By the sheer force of nature, this places CIOs and technology front and center."
Following are five categories of technologies that industry experts believe have the power to transform the retail landscape. Choosing whether to embrace these trends or dismiss them is your choice.
Ultimately, the trends demonstrate that consumers will drive the fate of your retail business and choose to interact with brands that speak to them on a personal level. And from lightning-fast communication to supply chain transparency, technology offers an avenue for making it happen.
How can retailers scale their ability to interact with consumers across all mediums, from social media to physical interactions, to email marketing and customer service inquiries?
"This idea comes from the bigger trend of trying to reach the customer where they are," said Holden Bale, lead retail strategist for ThoughtWorks, a global consultancy focused on using technology to drive business innovation in retail and other verticals. "To do it well requires machine learning, user experience, artificial intelligence, cloud and machine learning."
Bale says companies need to consider a multitude of use cases versus turning to one technology or platform to address all their challenges.
Moving to customer-centric operations
"Companies have been talking about big data for years," Bale said. "But now they need to consider how to operationalize it. They need to evaluate the technologies that make their data actionable."
Consider where digital data points converge with the physical. A world of data points is now ripe for the taking: customers ordering within a store, trucks making deliveries, the rise and fall of inventories and the quick pace of shopping trends. Pulling these data points together is what makes a truly exceptional customer experience possible.
It takes technologies such as the internet of things, radio-frequency identification and machine learning to tie these real-world, real-time signals together. If retailers can get comfortable with the resources, they'll need to tackle challenges like unstructured data and data security. "They'll have greater control over their operations, inventory and will even see faster time to market," Bale said.
Augmented reality, virtual reality and mixed reality
Imagine walking into a virtual NBA store and going one-on-one with LeBron James. Mixed reality makes that scenario, and so much more, possible.
"Think about what makes you and how you're going to get that across to consumers," Bale said. "These tools give you a platform to do that." From Warby Parker to Everlane and Snapchat, progressive brands are communicating their brand differentiators by delivering unique and useful experiences to consumers through AR and VR.
Across the retail space, this is a time for ideation and experimentation. Consumers are still in the adoption phase, but they're rapidly catching on and appreciating the benefits technologies like AR can deliver.
As the number of touchpoints increases and retailers' volume of data rapidly grows, they'll need to rethink their approach to analytics, including the way they capture insights and share them internally.
These solutions don't need to be complex or pricey; small retailers will still find value in platforms such as Google Analytics. "I think Google Analytics is key," said Nicole Leinbach Reyhle, founder of Retail Minded, a news and education publication for the retail community. "It's free, yet so valuable, particularly for small businesses, without as much access to larger data-based capabilities."
Increased data brings increased responsibilities. Yuval Yatskan, vice president of marketing at Skava, an Infosys company, noted that retailers need to find a way to strike a balance between leveraging insights and violating privacy.
"As machine and statistical learning become ubiquitous, retailers will know much more about their customers – perhaps even too much. Customers may feel at times that their privacy is being violated, since smart machines will be able to connect shards of information into a coherent, high-resolution and highly revealing picture … Retailers will have to find the right balance between exploiting every advantage they can leverage and delivering exceptional customer experiences where customers do not feel threatened."
Back to the basics
Although the emergence of new technologies is exciting, tools that many retailer technology professionals may consider basic shouldn't be ignored. POS systems, email marketing software and a solid customer relationship management (CRM) system go a long way toward creating a solid foundation for data collection and thoughtful customer communication.
"Tech is impacting retail in a big way," said Reyhle. "Each of these technologies deliver data that allow retailers to review and analyze their businesses to strengthen future business decisions … Tech is truly essential in driving growth to future business success."