Retail is dead, long live retail. In the next months customers will be in the mood to shop, even in those countries still struggling to overcome the consequences of a long economic and financial crisis. People want to spend, it’s just how and where they spend that is deeply changing.
The future of shopping gets caught between social and technological changes, and one thing looks clear: this is the end of retail customer experience as we know it.
Forecasts agree that - while undergoing a necessary evolution - the retail industry will generate a robust annual growth in 2015. As usual, the U.S. market will lead the way: the National Retail Federation projects retail industry sales to an increase of 4.1 percent; non-store sales, in addition, will show even better growth rates (between 7 and 10 percent just for 2015).
The rest of the world will follow, sooner or later. According to the 2015 Global Powers of Retailing, Embracing Innovation report from Deloitte, “the prosperity of the global retail sector in 2015 will very much depend on the economic stability of several of the largest economies”. China and the Eurozone have had a particularly tough 2014 but many indicators point to the likelihood of strong growth in 2015 and beyond.
WHERE IS RETAIL HEADED?
This is the tough question: surrounded and shaken by new technologies, how will retail evolve? It is evident that in-store purchases won’t disappear anytime soon: despite the fact that online and mobile shopping keep growing every year at a faster pace, it’s still brick-and-mortar retail that dominates customer spending all over the world.
Smartphone penetration rates increase, E-Commerce firms spread and evolve, but people still love to walk and wander into a physical store. What makes it so special? Not the product itself, nor the price. When competitors with better prices and a broader range of products are just a click away, the retail customer experience becomes the key differentiator for brands.
It’s much more easy to click on a ‘buy’ button on a smartphone, and for traditional brick-and-mortars the only answer is to evolve into something less traditional. Whatever technology solution you implement, your only chance to survive is to offer truly amazing and unique in-store experiences.
WHAT CUSTOMERS WANT
Marketers seem well-aware of the importance of a great customer experience but, more often than not, what has been achieved in reality lags behind the goals which have been announced. Let’s get back to data: a recent report by Econsultancy and IBM shows a huge gap between brands’ intentions and customers' real perception:
81% of consumer brands say they have a working holistic view of their customers;
Most customers don't feel understood by brands - only 37% say their favourite retailer understands them.
The reinvention of store starts from the need to blend analog and digital into a new, and most complete, experience. A handful of retailers have already tried a smooth transition from physical store to online and - finally - to a seamless omni-channel experience. They confirm something that Forrester has stated in a report entitled - not by coincidence - The Future of Shopping:
“The retail industry is more complex than ever. Every year, startups release new technologies that promise to help customers shop more easily or aim to help retailers improve their businesses. At the same time, customers are changing. Digital natives are now sought-after shoppers with disposable income and retailers are nervous that these consumers are capricious and demanding, with unique expectations for products, customer service, and payments”.
THE NEW RETAIL
Economic trends plus the evolution of disruptive technologies create a new powerful generation customer and force retailers to reinvent the store as an experience. The only way to attract, involve and delight the digital natives (the so-called millennials) is to bridge the physical experience of buying into a store and the online journey experienced across their mobile devices.
It could be useful, then, to make a list of the possible evolutions that will disrupt the retail industry in the years to come:
From brick to click to brick: the challenge of E-Commerce will force traditional retailers to think and act digital first, shaping a mobile friendly presence. They will rely strongly on social media for customer service, and on gamification for engagement management.
The brand new shopping: back from click to brick, retailers will build a new identity for the physical store, tearing down the four concrete walls and connecting with mobile devices. Starting with customer-facing apps, digital showrooms and advanced loyalty programs.
Self-directed purchasing: personalization is the keyword to understand how customers want to live the shopping experience. iBeacons, push notifications and the Internet of Things make the perfect companion for context-aware content. Loyalty will matter more than sales. Geo-fencing is the essence of proximity marketing.
The future of shopping will be shaped by technology but will ultimately depend on whether retail brands are able to understand the new rules of the Age of the Customer, embrace the challenge of digital transformation and finally deliver a better customer experience.
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As practical advice: if you want to connect with your customers in a whole new way discover Neosperience Engage, the end-to-end mobile marketing solution to turn on smartphones like magic and deliver personalized experiences to customers close to, or inside the store.