At RetailNext, we believe every shopper deserves the best shopping experience. And I believe that while we are in the middle of a retail revolution, most retailers are stuck on incremental change. Sure, there are spots of brilliance – digital natives like Warby Parker continue to move the needle on the in-store experience; new concepts like b8ta are popping up left, right and center; direct-to-consumer continues to evolve with companies like Enjoy; and even some legacy, dare I say “old-school,” retailers are starting to get it – Tommy Hilfiger’s new flagship store on Regent Street in London, for example, gets it, and Walmart is doing exceptionally well. Guess what though? Rome is burning while a lot of retailers continue to play the fiddle.
I never thought I would see the day when so many retailers were praying for Walmart’s success. This holiday season, Amazon will likely grow another 25 percent year-over-year and will control over half of all online holiday spend. Does it feel magical to tick the Santa list off from the comfort of one’s couch, no. But I find myself wondering, what are the alternatives? And how do you deliver the magic back to the season, and back to the store?
Year after year, my blog posts focus on the points of friction in-store. And guess what? As we near the end of 2017 they are largely the same – unwieldy queues at the fitting room, only marginally better check-out experiences, and inventory issues that are getting worse, not better. As RetailNext and other retail thought leaders prepare for the 2018 NRF BIG Show, I find myself thinking – why aren’t retailers moving faster? Sure, change is hard, but the alternative is pretty darn depressing.
But how to start? I love the Chinese proverb: “The best time to plant a tree was 20 years ago. The second best time is now.” I think it perfectly describes how retailers should be thinking about their businesses. I know it’s how customers feel. Shopper after shopper I talk to ask:
- Why is the in-store experience still so bad?
- Why don’t department stores feel special anymore?
- Why can’t even the best toy stores find magic in-store?.
To the shoppers, it seems so obvious. Heading into the new year, there are five recurring themes I expect to break through the clutter.
- Full in-store journeys can and should be understood. Retailers will finally start mapping the in-store journey with the rigor as that done with the digital journey. Guess what, the technology exists. Companies like RetailNext can tell you with great precision where shoppers and staff in your store navigate, interact, abandon and transact. And with the continued evolution of RFID, companies like Intel, SATO Global Solutions and BT are increasingly able to map the full physical journey of product to and through a store. Imagine, now you can have a complete picture of the movement of people and product in your store.
- Artificial Intelligence (AI) will move the needle. No, machines aren’t taking over. But, imagine having solutions that don’t just tell you what happened, but what is going to happen. This AI can help across the board – knowing what is in your supply chain (through innovative companies like Nexgen Packaging and Valmarc) and when it will hit the warehouse or store, or when you are going to have a problem anywhere in your supply chain. Basic, yes, but key (and under-managed in most organizations).
- Deep-learning hits the scene, but won’t move the needle just yet. I am certain that 2018 will be a big year for deep learning in -store. Imagine retailers being able to classify actions in store – is someone trying on a pair of Allbirds or spraying themselves with the latest Kardashian concoction? Deep learning requires “training” at scale and over time, so actionable deep learning data probably won’t move the needle dramatically in 2018, but it will set the stage for continued machine learning and will eventually translate into insights that do move the needle, making retail faster, more agile, more individually relevant and flat out better.
- The holy grail nears. The shopper journey continues to evolve and I think we will start seeing meaningful connection of the digital and physical journeys in 2018. Not just understanding who and how often, but finally retailers will have technologies that allow them to connect the dots. Imagine knowing the digital journey before a visit to a physical store and being able to influence that purchase real-time, in-store. Retailers, for the most part, aren’t there, but are getting close.
- The micro applications go macro. Everyday I hear about a new consumer- or associate-facing in-store application that promises to “change the way we think about retail.” Many of these applications provide significant utility for retailers, but the big questions are which ones have the best ROI and how do you power these with the best inputs to deliver the best results? I believe 2018 will see these micro applications evolve – some will win and others will quitely ride into the night, but the winners will do a few things. They will 1) provide more than one benefit, 2) use data to deliver a more powerful experience and 3) ease friction between stores, associates and shoppers.
So how do retailers get started? As I’ve said year after year, just start. The revolution is real, it is here and consumers deserve and are demanding better, more exciting, friction-free experiences. Are you going to watch the revolution or join in force? In the coming year, more than ever, there really is only one correct answer.
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