Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.
Like most people, I am horrible at making accurate predictions far into the future. There are just too many variables and the biggest one is the consumer. It’s really hard to predict the success of an idea and get the timing right. I recall testing tablets at a retailer ten years ago, but they’ve only recently taken off. Tablets may replace registers, but I never could have predicted that 10 years ago.
So perhaps instead of asking what will be different ten years from now, maybe we should ask what won’t change? That’s one approach Jeff Bezos takes when deciding where to focus energies. You can bet consumers will still want low prices, vast assortments and fast delivery, so those are constants in the Amazon strategy. What are some other things that won’t change?
The internet isn’t going away, that’s for sure. If anything, bandwidth will increase and open up even more features. How could your business benefit from a 10x improvement in bandwidth? Would all the products on your website be animated, perhaps with 3-D perspective? Would you offer live video help online and from store kiosks?
Mobile will still be important as well, but it might take some additional new forms, like wearable devices. It’s always going to be important to serve customers wherever and whenever they want to shop. We need to stay flexible and support various form-factors for communicating with consumers on the move. That might include watches, holograms and displays projected on the nearest piece of glass (See – Total Recall, 2012).
You can bet the marketing department will still be around, and they might just wield even more power. Assuming we’re able to increase the amount of data we collect about our customers, how will we use that data to improve the shopping experience? Can we provide real-time, personalized pricing? What new types of security can we employ to protect that data? How do we better include the customer’s voice in our business processes?
My best advice for retailers: First and foremost focus on how technology can improve the things that aren’t going to change. Adopt technologies that help keep prices low, improve the customer experience and make better merchandising decisions. These will vary depending on your business model, but the point is to not waste energy aiming for something that may never take hold. Even the best ideas have fits and starts, so don’t even try to align your strategy to predictions of the future. But always track innovation and be ready to adopt when the timing is right. Awareness and agility are key.
BrainTrust
Discussion Questions
What strategies should guide technology investments in today’s rapidly-changing climate? Of the retail tech being rolled out today, do you see much of it addressing “things that won’t change”?
Poll
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Bricks and mortar stores won’t go away anytime soon, but they will evolve. While the internet may win on selling commodities at best price, consumers value the experience, personalization, and service.
The key to stores’ survival is moving the sales associate from a role of “selling product” to someone who is consumer centric. The technology being rolled out today has the potential to both preserve and improve bricks and mortar stores … IF sales associates are equipped to “help consumers buy.”
What won’t change in the future is the power and value of consumer experience.
Well one thing that won’t change, unfortunately, will be better training for customer associates and their lack of knowledge. Every time you get an “I have no idea” answer from a store associate about the simplest request, such as “does this brand come in a slim fit?” should be an opportunity for better technology, be it a tablet or a Kiosk that can actually provide the answer to your question.
Don’t get me wrong; I think when an actual human can help, it makes the shopping experience better, but so much of the time that is not the case. It is unfortunate that training is not considered to be more of a priority. I could understand when asking an associate who may not work in the department you are shopping, but what about the one you are in? I was recently in the men’s department of a major department store and asked a young associate where I could find handkerchiefs and was shocked to see the look of confusion on her face. Not because she was not sure where they were stocked, but because she was unsure what I meant by a handkerchief! Sad but true.
The long answer from a technology guy would take volumes to write. The short answer is to invest in technology that allows a retailer to enhance the shopping experience of their customers and by connecting with their customers. Likewise, the technology that allows the store staff to connect with each other so they also have enhance the shopping experience of the customer as well as to manage the inventory. Technologies that cover data, voice and now video will be a part retailer investments.
First of all, we need to remember that technology does not define the future, it merely enables it. We also need to keep in mind that technology is not – in and of itself – a strategy, nor can a long-term strategy ever be built around a technology.
As far as investing in technology goes, one thing that should be avoided at all costs is the one thing that retailers constantly do – respond in a knee-jerk, me-too manner to each and every new wave of technology as though it were fully formed and timeless.
Here’s what won’t change in the future. There will be people selling things and people buying things. They will need to communicate and prefer to communicate in the most convenient and seamless manner available to them. Technologies that recognize that will win. Those that fight that will lose.
When it comes to the future, you can only live in one of two possible worlds – the one you have designed or the one you have inherited.
One issue, which was addressed head-on by Bob Phibbs at our live panel discussion recently at the d2 conference in Cincinnati, is how are all these technological “wows” being used? The mantra is that they are all about serving the customer better and improving the customer experience.
But all too often, new technology is used to cut back on human resources, which actually makes the customer experience worse. As nearly everything gets automated, customers still want to talk to a human being in a physical store, get to a real person on the phone without wading through a lengthy automated menu of choices, and chat with someone on the web who isn’t multi-tasking and reciting rehearsed lines.
Oh, and how about taking all this data and figuring out how it can be used to truly make the customer experience better, rather than just trying to sell the customer more, and “upgrade” them to the next level of goods?
Change is all around us, particularly as technology advances, marketers experiment with new programs and strategies, and more folks move along the internet and mobile technology adoption curves. But the simple fact is that brick and mortar retail will not go away. Consumers like to touch and feel. They like the experience that in-store visits offer. Marketers looking to make smart investments in technology must recognize this fact, and direct their time, money and attention into bridging the online and offline experiences into a single seamless phenomenon.
One thing that will not change is that consumers will demand a great shopping experience. Identifying small segments of consumers or individual consumers will be commonplace. Therefore the consumer experience will need to be personalized. To do that, employees of retailers will need a lot more training to deliver great experiences and to work effectively with individual consumers with whatever technology that consumer is using.
Mobile is slowing merging into “wearable” and “ubiquitous” computing. Expect customers to have massive computational capacity in various formats (“phones,” watches, glasses, head pieces, cars, etc…). This effectively makes “opportunistic” sales caused by lack of knowledge, a thing of the past.
To sell, retailers will have to resort to one thing that will never change: customers want to be “informed,” “entertained,” and “respected.” Stores will become hubs of “brandness,” areas where one can go, experience and interact with the brand and yes…purchase products also.
I think a good way is for a business to ask themselves: “if we went away, how would people get by without us ??” As you go through your services, and you reach the point where the answer is “they couldn’t” – and it has to be a thoughtful response, not simply wishful thinking – then you’ve found what won’t change…and if you never reach that point, then you may disappear.
Technology is driven, at its core, by the myth that it radically transforms. Sadly, most efforts I’ve been watching are born of this misguided theory.
In reality, when tech has impact, it’s for functional reasons – it solves problems, delivers value, helps consumers.
In fact, too much tech is driven by what I learned as the FUD factor while selling supercomputers … by spreading Fear…Uncertainty, and…Doubt. That trio is never a good foundation for moving forward.
My advice is to do isolated and limited tests of cool new tech…but only shift into major efforts once that tech shows that it solves problems in reality – not just in promise.
One dynamic to consider is the shifting power on data “ownership.” To date it has mostly been the business that collects the data that owns it and can use it, monetize it, or even do nothing with it … as it chooses.
I think that dynamic will change and will lead to brands and consumers having more access to this data. This in turn will likely shift the balance of power and fuel a different dynamic in retail and brand collaboration. It will also allow consumers to be more selective in who they permit to “know” them through access to data.
This will create some new expectations, dynamics and currency through which to provide value to customers.
What won’t change is that retailers and brands that do a good job by listening, anticipating and serving customers with relevance and value will be rewarded with business.
What won’t change? Okay, I will go along with the exercise.
I am typically a fairly positive person, however, I am only thinking of somewhat negative aspects of retail that may linger. This is only because they have been around for so long. Out-of-stock items at store level will continue to be a challenge for most retailers. Another is that the labor expense for stores is often a driving factor in service levels in most developed regions of the world. This also reflects the level of product and service knowledge of the store people, too. One further area is store layout. How much have the high-level floor designs truly changed in the past decades?
All of these issues can be addressed by technology. However, the industry has been slow to adopt those effective technologies for one reason or another.
What won’t change is the fact that customers LOVE great service, and especially from people (v machines). Look at our BIC retailers: Apple, Whole Foods, Nordstrom, Sephora – common trait: great customer service both live and otherwise, from people. Call Apple with a problem, then call a bank with one – what’s your opinion of Apple after that?
Whether or not retailers can move closer to that ancient paradigm is another thing. But hopefully, after so many years of focus towards online trade build up, the light bulb will go off and we’ll get back to some drastically missing basics.
For retailers, thinking 10 years in the future is just the wrong strategy. It’s not just that it is virtually impossible to predict that far into the future beyond platitudes about low prices and service.
Too often, retailers can’t even predict what will happen when they launch an existing initiative next month. How will my store remodel fare? Or my new ad campaign? Or a revised line of merchandise? Retailers would be better served investing in the capabilities and technology to innovate faster, figure out what works and what doesn’t, “fail fast,” and bet bigger on tested and proven ideas.