There is one New Year’s resolution that every retail brand should make: to put customer centricity at the core of their business strategy while focusing intently on experimentation and innovation.
Retail businesses today operate in a virtuous circle of digital innovation and customer expectations. Visionary leaders know and understand what’s next – they apply technology concepts to create differentiating capabilities, design new business models and deliver near-magical experiences that shape the future retail experience.
Here are four emerging concepts you can expect to see more of in 2019 and beyond.
- Automated commerce: When algorithms take control
AI is now a very real part of our lives. Savvy retailers are using AI to analyze information, extract insights and provide a personal, frictionless shopping experience. Consumer electronics brands such as Bosch, HP, Samsung and Whirlpool have developed connected products that automatically place orders with Amazon when supplies run low. Digital retailers like Netflix, Spotify, Amazon and Farfetch lean heavily on machine learning and algorithms to continuously learn and analyze customers’ preferences and browsing behaviours to present contextual recommendations. Bricks-and-mortar brands are on board, too; candy retailer Lolli & Pops is rolling out a facial recognition loyalty program that allows associates to recognize returning customers as they walk into the store and simplifies their checkout experience. Every retail brand should take note of this trend; when it’s executed well, customers appreciate the time they get back, which ultimately makes them more and more brand-dependent.
- Experiential retail: A focus on customer-centric innovation
Only the retailers that focus on continuously improving the customer experience will thrive in today’s world, and cautionary tales abound (think of digital laggards like Sears and Toys ‘R’ Us). Amazon’s success stems from its relentless pursuit of innovation. Many shoppers are now conditioned to begin their shopping journey with Amazon (even choosing it over Google when they’re searching for a product), and for the eighth year in a row, Amazon has been ranked #1 in the American Customer Satisfaction Index. Walmart is taking a stab, turning to M&A to challenge Amazon’s leading position – from the $3.3-billion acquisition of Jet.com (an e-commerce start-up) to a record-breaking $16-billion acquisition of Flipkart (India’s largest e-commerce company). Its recent launch of the Walmart Toy Lab also indicates an intended shift from an everyday-low-price model to a more customer-centric one.
In-store shopping still accounts for 90% of retail sales, and a number of forward-thinking retailers are applying innovative digital technologies to transform the in-store customer experience. Rebecca Minkoff and H&M in New York are adopting digital mirrors and voice technology, and Farfetch’s “Store of the Future” in London uses advanced digital display technologies to bridge the online and offline worlds.
- Beyond websites and mobile apps: New UIs and emerging channels
With the ubiquity of smartphones and the growth of IoT (wearables, smart home speakers, connected appliances, etc.), consumers today are more connected than ever. They hop from one touchpoint to another and expect a seamless transition. Forward-looking brands are moving beyond mass-adoption devices and jumping on emerging channels such as voice platforms and AR/VR headsets. Some excellent examples:
- Ever-changing rules: Prepare for disruptions or be disrupted
Consumers today are perpetually impatient, eager to embrace anything that delivers immediate gratification. Netflix didn’t just kill Blockbuster Video; it changed the rules of the entire entertainment industry and permanently changed customer expectations. Not only do we now expect on-demand streaming, we also want our content providers to predict our preferences and deliver personalized recommendations, forging direct relationships with us.
The rise of the sharing economy, epitomized by the phenomenal success of new models like Airbnb and Uber, serves as a wake-up call to incumbents. Subscription commerce, which gained an early foothold in digital media and entertainment, has now expanded into a wide range of consumer product categories with a far-reaching impact on grocery, CPG and fashion retail businesses.
The pace of innovation is accelerating. Don’t be left behind.
At Zero Gravity Labs, we’re working to identify, test and validate emerging technologies that have the potential to disrupt the world of retail and customer experience. We’re looking at AI, the Internet of Things, and reality-based technologies like augmented reality, virtual reality and more.
To learn more about Zero Gravity Labs, contact Bernice Chow, Manager, Innovation of Products and Prototypes
, or visit us online at https://zerogravitylabs.ca