With all the talk about big data, omnichannel and tech innovations commanding the conversation at this year’s National Retail Federation convention and leaving many retailers wondering what to make of it all, experts from content network PSFK set out to present a clearer, big picture outlook on what’s happening with retail.
At Tuesday’s session, “Future of Retail 2014: Trends to Act On,” Piers Fawkes, PSFK founder and president, and Scott Lachut, director of research and strategy for PSFK Labs, a division of PSFK, discussed trends uncovered in the company’s recent report, “The Future of Retail 2014.”
“Social and mobile have caused a shift in shopping behavior,” Fawkes said as he began the session, acknowledging that this was not new news but a reminder to retailers that as the digital and physical worlds begin to converge, it’s going to create a new model for the retail marketplace. A model that is, as PSFK notes, “both connected and channel-agnostic.”
There are two major themes in retail today, Fawkes said. The first is the use of data-driven commerce platforms where retailers can begin to understand their customer and anticipate that shopper’s next move. The second is the notion of the networked purchase path where retailers can sync the capabilities of all of their platforms and add convenience into the purchasing process.
Consumers don’t care which channel or platform they shop on, Lachut explained, but they do care that those channels are managed in a way that allows for a seamless purchasing experience.
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Both speakers stressed the idea that data-driven community programs are the foundation of modern retail.
There were eight additional supporting retail trends PSFK highlighted from the report, the first of which was omnichannel point-of-purchase, a concept PSFK described as tapping into shopper impulses by converting every product interaction into a purchase opportunity.
Diane Von Furstenburg (DVF) has done well to implement the omnichannel point-of-purchase experience as part of the company’s new retail practices. DVF recently hosted a Google hangout, a platform where users can interact on group video calls, share photos and have conversations. The designer herself appeared in a video in the hangout telling viewers about products in her line and as she spoke, those products popped up along the sidebar and anyone watching could click on the product to purchase it. “It’s like a modern-day QVC,” Lachut said.
The most important thing for retailers to consider here, Lachut said, will be whether they have the infrastructure and inventory to allow omnichannel point-of-purchase to happen.
The second trend PSFK highlighted was adaptive personalization, or developing contextual services to learn shopper preferences over time and ultimately generate tailored results.
Foursquare, for example, an app that lets users save and share places they visit, learns from user behaviors based on certain “check-ins” and can then predict things that user might be interested in. In terms of retail, Foursquare could point out stores nearby that the user might want to shop in.
Contextual support was another trend to emerge from the report. Retailers will have to provide relevant information to shoppers when and where it’s needed most.
Estimote Beacons are tiny sensors some retailers have begun piloting in stores to provide continuous, personalized support to shoppers. Retailers can program a beacon with all of their store product data and as the shopper enters the store, that data pops up on their phone (if they opt to receive it). The mobile data transitions from one item in the store to the next based on the shopper’s proximity to that item and provides instant information about sales or ratings and reviews for that product.
Retailers tend to be concerned about shoppers showrooming, or coming into the store to look around before ultimately buying online, but PSFK says beacon technology is one way to avoid that as it gives customers the information they need to buy what they want without having to go online.
Another new trend is connected relationship management, the idea that using shared access to information will bridge the gap between sales staff and shoppers and help build longterm relationships.
Boston Proper, a women’s clothing boutique, has introduced technical tables in some of its stores where a shopper could login into their personal profile, see things they’ve previously liked on the website, and if the sales associate knows that particular customer is coming in to shop, they could pull the customer’s favorite items in advance.
The trend toward multichannel customer service means retailers will begin providing numerous ways for customers to connect and interact with a brand, and customers expect a level of human service for help with that process, Fawkes said.
Amazon Kindle’s Mayday button was the example PSFK gave as evidence of multichannel customer service. It’s one button Kindle customers can press from their device to get technical assistance. A live person appears on the screen via video and while they can’t actually see the inquiring customer, they answer questions in real-time. In this case, the technology fades into the background and the customer still gets a human face to interact with, something PSFK said will be very important to the experience.
Linking payment systems to verified shoppers so they check out more efficiently is a trend PSFK calls instantly verified. Venmo Touch is a one-touch mobile wallet that offers this service by allowing shoppers who have already signed up and stored their payment data to make a purchase with one click as long as the retailer is also using the technology.
On-demand delivery is also going to be a key trend as consumers still seek instant gratification regardless of how they make purchases. Retailers will have to deliver on that need for convenience and immediacy to get shoppers their purchases more quickly.
Kate Spade Saturday, a new line under the Kate Spade New York brand, recently redefined window shopping with temporary touch-screen windows where shoppers could buy items on display in the window using a giant iPad-like screen. Once selected, the item would be delivered to the customer anywhere in New York or Brooklyn within an hour. The idea was that a shopper who needed an item last minute could buy it any time of day or night–as the window shopping was available twenty-four hours a day–and then have it quickly delivered to a convenient location, even if she were at a picnic in Central Park.
“You’re taking the instant gratification of shopping in-store and bringing it to online,” Lachut said.
The final trend PSFK touched on was community loyalty, the idea of tying rewards to participation in a wider community to provide lasting benefits to both retailers and customers.
Walgreens, for example, started a loyalty program where members could share their fitness activities in a community and earn reward points with the store based on miles covered through exercise. This gives customers more of a connection to loyalty programs and, ultimately, the brand in a way that having a series of store loyalty cards accumulating invisible points doesn’t.
PSFK left the audience with a few key takeaways for managing the coming trends and getting on board with the new way of retail.
First, retailers need to slow down and focus on the customer experience. They’ve got to be accommodating at every step of the experience and use customer data to create digital services. The shopping experience will have to be channel-agnostic–just as easy via any platform–and transactions should be frictionless. Technology should be used in a way that it still delivers a human touch and both the retailer and the shopper should be able to access data anywhere.
Lastly, Fawkes said, retailers must be able to build a system of love. By creating that one-on-one experience with customers, brands can build the kind of loyalty that will make their customers love them.