At first glance, the fundamentals of retail business have not changed so much in the last fifty years. Someone sells products/services, and someone makes a purchase. If you have a closer look, though, you will see how deeply everything has changed.
We have witnessed a revolution - made possible by disruptive technologies that blur the distinction between the physical and digital world. Moreover, the journey is far from being finished. Major digital trends push to change retail industry even more deeply, from 2015 on.
Arguably, the pace of this evolution will increase in the next years, driven by the spread of mobile devices and the adoption of smart objects, namely the Internet of Things. The input (products) and the output (conversion) will still be the same, but all that is in the middle is completely different: the customer journey that connects brands and customers.
One debate is about the future of shopping. It is pretty obvious that the retail customer experience, shaken by technology, is destined to change, and it is already transforming. However, what kind of evolution will we face?
Retailers are living in a moment of transition, somewhat stuck between traditional store patterns and their digital transformation. Customers, for their part, show no doubt in embracing the new world shaped by constant connectivity and segmented by the rhythm of the smartphone.
In 2015, customer expectations have reached new heights when it comes to shopping across channels and devices. We are running towards a day when we can assume “100 percent of shoppers will be connected 100 percent of the time.” (Deloitte Digital).
Given the premises, a one-sided approach to retail strategy is not inadequate to face the real challenge of our times. In other words, attract and engage customers that live online and can choose from a (potentially) infinite set of suppliers with a tap.
When we say that an omni-channel approach (with a mobile-first vision) is the only viable strategy, we are saying the obvious. However, the obvious seems to be still a challenge for too many retailers.
To bridge the smartphone with the shelves, you need to craft a truly digital customer journey, rather than continue to consider e-commerce, proximity marketing, behavioral targeting and the physical store as different tools.
Most of all, you need to keep your eyes wide open to trace the seeds of evolution before your competitors do; ready to adopt inventions that revolutionize and strengthen your retail customer experience.
At the start of this year, Google shared - on its think-tank website Think With Google - an article that described seven key digital trends for retail technology:
Seamless touchpoints - Customer’s life can be divided into micro-moments, mostly spent on connected devices. Retailers need to preside all touch points of the customer journey, to allow clients to move seamlessly between devices.
Borderless retail - Commerce has no geographical borders anymore. Thanks to the Internet and E-Commerce, your competitor is not just your neighbor. Competition is a worldwide game: a threat but also a huge opportunity.
WWW Delivery - WWW now stands for ‘what I want, when I want, where I want it’. Customers demand that you can fulfill their needs in real-time, on any device and across all channels. Retail goes way beyond the four wall of the store.
Personalization - When commerce becomes ‘me-commerce’, retailers must learn to analyze mobile data and recognize customer behavior, to deliver personalized experience, and tailor-cut offers and discounts.
Service and experience - While the product is still the purpose of shopping, there is another critical element that you should never forget. The experience. The ‘how’ has become (at least) as important as the ‘what’.
Store revolution - Even with the competition of online firms, the traditional store will not disappear anytime soon. It will evolve, however. Retail spaces will get from places of transactions to places of experience, to showcase products and engage consumers.
Social commerce - Social platforms are essential to connect with customers, and the advent of social commerce was unavoidable. The challenge for your brand is to show up in the social feed with the right content at the right moment.
This is what Google predicted months ago. Some trends have become a factor in retail marketing strategy, some will come soon, others will probably fade away like meteors.
Now that we are in the middle of the race, it is interesting to see how far have these trends took shape, and what other trends are taking shape on the horizon. While we recognize the value of the seven trends listed by Google, we want to add three more digital trends that will play an important role in the retail experience of the future.
Two figures show the value of millennial customers: By 2020, roughly one-quarter of customers will have been born after 1980; their purchasing power will rise to 1.4 billion dollars spent every year. Well informed, always connected and willing to spend, millennials are the most powerful force in Western economies and require a renewed retail customer experience.
The pervasiveness of the technology produces a huge amount of data that companies can scan and analyze to understand their customers. Predictive analytics makes it possible to study customer behavior, and identify patterns to anticipate needs and wants, starting from previous actions and habits. If employed in correlation with machine learning, the predictive analysis may finally give a purpose to the Big data buzz.
As a direct consequence of the previous point, technology rewrites the rules of customer engagement, reinventing loyalty in the name of behavioral targeting. Proximity marketing will raise to a whole new level, stepping from generic push notifications to one-to-one communication. Mobile app development will stop being a simple ‘addendum’ to become the ultimate key to customer’s heart.
It is clear that only by opting for a digital perspective will retailers maintain and grow in the face of technological (and social) disruption.
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