Shaping the future of retail
“How is technology changing the retail landscape?” As CMO of a tech company, it’s a question that’s always near the top of my mind.
The answer is simple – it always has and will continue to transform. However so are so many other factors that sit behind the need for technological change and implementation. In fact, fragmentation and choice now offered to consumers through the proliferation of new technologies and the access to information is creating new retail battlefields. And with so many battles in progress and so many on the horizon, picking which to fight can be a difficult choice.
Battle 1: The Online Vs Offline experience
Traditional bricks and mortar retailers are struggling with the ever increasing buying and distribution power of the likes of Amazon or Alibaba, whilst the online retailers wrestle with how to provide the ‘experience’ so many customers demand and are moving into physical spaces, for me proof that it is definitely not the death of physical retail. On the surface it seems to be a battle of so-called digital transformation, however beneath it all is a fundamental truth – the human interactions, needs, wants and behaviours of consumer groups and individuals.
As access to technology eases, consumers are enforcing their demands to interact with brands and retailers in the way they want, rather than the channels set up and controlled by the retailer. The fashion industry has always been at the forefront of tackling this change, by its nature and need to deliver new ranges every season and create an emotional connection they have pioneered flagship physical retail experiences such as Burberry in London as far back as 2013 and optimised online UX, editorial and looks to package and sell lifestyle experiences online. Net-a-porter defining a completely new business model to service a discerning modern consumer with the groups sales now reported at $2.5 Billion in 2017.
Battle 2: The customer experience
“15 years ago, the average consumer typically used two touch-points when buying an item and only 7% regularly used more than four. Today consumers use an average of almost six touch points, with 50% regularly using more than four.” – Marketing Week.
This change and need to better integrate internal business systems and join up communication channels has lead to the rise of the term ‘customer experience’ with lots of new and exciting job titles and consultancy models cropping up.
This change has posed problems for retailers and brands with business systems built on legacy technology that is unable to integrate creating data silos rather than a single customer view. This coupled with the fragmentation of the media landscape has made communicating with customers exponentially more difficult.
Businesses that get this right are winning. According to a recent report from Accenture, 75% of consumers are more likely to buy when a retailer can do something as seemingly simple as recognize them by name, recommend options based on past purchases, OR knows their purchase.
And for businesses getting it wrong, Jeff Bezos sums it up:
“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.” – Jeff Bezos
The next war: A custom experience
As personalised communication becomes the expected norm, it is key that retailers and brands remain keyed in to the demands of their consumers and are able to move beyond the customer experience into delivering a truly end-to-end custom experience.
One that integrates the product, distribution and communication to deliver something truly unique. 50% consumers are likely to switch brands if a company doesn’t anticipate their needs – Salesforce.
AI is currently being lauded as the solution to the business world’s communication problems, allowing for individual response without the need for a gigantic workforce. With Gartner suggesting that Intelligent Automation will manage 85% of businesses’ customer relationships by 2020 – Gartner.
However AI is only as smart as the data that powers it. And this is dependant on ensuring you are providing enough value to the consumer that they are willing to part with it, just look at the recent Facebook and Cambridge Analytica crisis. And as communication personalisation becomes the expected norm, retailers and brands need to find new ways to add value to their current experience if they are to stay ahead and continue to thrive.
That’s why at Fuel3D we are bringing together the best talent in 3D technology, data science, retail and commercial implementation. Going beyond the traditional flat data sets and integrating a true understanding of the 3D form. For the first time we are able to offer our retail partners access to 3D form data that they easily embed into their existing production, distribution and communication chains. Offering the consumer a unique value for their data – a truly custom experience.
For example we are currently developing a retail prototype that allows eyewear manufacturers to provide fully custom frames and lenses through a simple mobile based scan and web delivery platform. Saving the consumer time, allowing virtual try on and best fit recommendations and going back to the understanding of people and their behaviour.
In the battle to shape the future of retail, technology is absolutely a tool in the armoury. However it will be ineffectual and often counter productive with out first addressing the behaviour of customers and understanding how you can continue to provide value and truly start to deliver a custom experience.