Three innovations that will change retail forever
Not a day passes by without a new innovation in retail.
We have examined the major market trends and identified three innovations from the best retailers that are revolutionizing the customer experience.
1 – In-store customer data collection
In the era of Big Data, retailers are building an increasingly more complete profile of their customers.
Macy’s, for example, has just deployed a mobile application that responds to its consumers’ common requests. From now on, the question “Do you have it in size 38”, will be answered by an artificial intelligence, leaving salespeople more time to focus on establishing a deeper relationship with the customer. Not only does the app guarantee a rich human experience, but it also keeps track of the most frequent customer requests, which helps Macy’s learn about their needs on a daily basis.
Here’s another example of innovative in-store use of data; at the Bon Marché de Paris grocery store, shoppers are tracked in real-time as they peruse the aisles. This data, once consolidated, helps measure each aisle’s success in order to optimize merchandising and to target certain items according to the buyer’s profile.
On the other side of the screen, new platforms are being developed to improve the omni-channel experience using customer data. Tulip Retail has a comprehensive interface that can guide consumers to different models. It makes suggestions for additional product purchases and supports the customer through their omni-channal purchasing process.
Effective use of data is becoming more popular. Each retailer uses it in its own way, but always to revolutionize the customer experience. Yet, the widespread use of data and artificial intelligence still elicits a lot of anxiety among these customers; 28% say they are very uncomfortable with its use. Trusting the company’s operating methods remains a key issue to surmount in order to improve the consumer experience.
2. Digital technologies that build trust
Studies have shown the direct correlation between consumer confidence and their spending. In fact, consumers, and particular those in the younger generations, want to buy more from companies that share their values.
At Matt & Nat, a brand new line of vegetable leather made from synthetic and recycled materials, consumers can buy products that are better for the environment and their health.
Even though brick & mortar companies have resolutely made an experiential shift in recent years, web interaction with them remains far behind. Consumers still describe the online interaction experience as being painstakingly arduous. Since 2016, more than 30% more users deploy an adblocker each year because of aggressive retargeting and pop-ups that impair online browsing.
They have never felt so poorly treated and there is a great need to regain their confidence in these e-tailers. In France, brands like Channel are finding solutions. The famous fashion house launched a “Brand Posture” campaign; a media posture promising to respect their shoppers on the web.
To do so, the brand has been more vigilant controlling the amount of exposure to their advertising campaigns and uses advertising formats that don’t hinder navigation as much. It’s an ambitious gamble, but Channel prefers reducing the reach of its ads to provide a premium shopping experience throughout the buying cycle.
3. Peer-to-peer consumption
More commonly known as the sharing economy , peer-to-peer consumption is an economic circuit based on access to a product rather than the transfer of ownership. Here, the customer also becomes the provider of the product or service exchanged.
Peer-to-peer consumption is very successful with consumers, as it solves most of its ethical dilemmas. This mode of consumption was initially considered to solve societal problems like hyper-consumption, pollution, and to reduce poverty by reducing the cost of coordination within its communities. What is the impact on retail?
The impact on retail is immediate. A study about Texas hotel revenues since the launch of AirBnB found that a 1% increase in rooms available on AirBnB resulted in a 0.05% reduction in nearby hotels’ quarterly profits. Since 2013, AirBnBs have been causing Austin-area hotels to lose an average of $50,000 dollars, a figure that has since steadily increased. The most modest being the first ones affected.
Peer-to-peer consumption is a direct substitute for the different products and services sold by the retailers. So did brick & mortar make a new enemy and find a new reason to close shop?
Not so fast. The best retailers have understood that they also have a place in these circuits.
BMW launched its online platform called “Drivy” to enable consumers to rent their BMWs amongst themselves: what better way to strengthen the sense of community around the brand and to extend the product life cycle. In the same vein, Patagonia launched its e-commerce site in collaboration with eBay to enable consumers to buy and sell the brand’s products between them.
Retailers have only experienced their fist challenge. Every time they implement innovation will improve the customer experience in grand fashion, but remaining vigilant is a constant challenge. Today’s new innovations are just the first milestones of many to come that will revolutionize the consumer experience again and again.