Increased automation, streamlined delivery services, virtual reality, 5G and more; the future of retail is bright and beautiful
And more change is coming. Delivery models and initiatives such as Click and Collect will continue to improve the online offering and customer service.
Amazon’s Prime Air is flying ever closer to drone delivery reality. Audi have even tested delivery options with Amazon and DHL to the boot of their cars with a digital code that opens the boot over a specified period of time and then expires as soon as it shuts.
The rise in Virtual Reality means customers will be able to upload their details, go shopping, try clothes on, then click to buy without leaving their homes.
However, the increase in online sales won’t simply translate into the death of the brick and mortar store. In 2015, worldwide online retail sales accounted for around 6% of the total retail market – there’s still a long way to go until in-store purchases don’t make up the majority of the market. Retailers talk a lot about an omni-channel offering (and some are better than others) but most could do better at delivering a seamless connected on and offline experience.
So how will the in-store experience evolve? As long as there are sufficient products to look at and trial, stores won’t need to carry as much stock. Customers could place an order, pay for it on their mobile device and find their goods waiting for them at their car or hotel. No more carrying bags around CBDs or Westfield; less risk and less effort for the customer.
And as less stock frees up more space in store, retailers can start to use the environment to create an improved customer experience - better changing facilities, experiential spaces, cafes and more. For some brands the store will be increasingly used as an experience led, increasingly Virtual Reality-led, space to sell brand values as well as product, The business model and sales attribution by store will adapt so that retailers can still understand how individual stores are performing, given payments will be made online.
Data is key at maximising each customer’s lifetime value as well as making retail business more efficient. But retailers need to continue to create offerings that customers are willing to give up their data for. And then use it correctly, because here’s the thing: not all data is created equal. As the current big data deluge becomes a tsunami, it becomes harder to see what’s of value. Retailers need to swap the telescope view for a microscope and remember that, behind all that information are real people.
Technologies that are seeing improved performance such as iBeacon (which uses Bluetooth to track and engage with customers via radio signals sent out from proximity beacons) have the potential to create timely communications at a point when you understand when and where a customer is. Artificial Intelligence (AI) is also improving the way we use data, allowing retailers to create improved communications through learned behaviour which now sits within an increasing array of platforms. If used in the right way the advancement in these technologies could be very powerful. Used in the wrong way and customers will just turn off and ignore their messages and may get annoyed by them. Similarly, all Wi-Fi based systems that track customer movements have the potential to create a wealth of understanding that can ultimately improve customer experience, but a duty of care has to be overlaid when dealing with sensitive data.
The future will be data-driven and technology-backed, with an increased convergence from the online and offline environments. The possibilities are endless and we are only just scratching the surface.
Jamie Allan, Group Managing Partner, Intermarketing Agency.
Email: jamie.allan@intermarketing.com
Web: intermarketing.com
Twitter: @Intermarketing