Throughout 2018, it seemed the pressure on retail marketers reached boiling point. With a string of retailers closing their doors for good, many have been left wondering how it’s possible to survive in such a tough environment. Does this spell the future for the retail industry? Or is the demise of so many well-known names simply the results of brands who fail (or refuse) to adapt to ever-changing consumer demands and behaviors?
In 2017, the World Economic Forum said that the consumer industry is set to change more over the next ten years than it has in the last 40. The secret to survival will be keeping a close eye on your customer’s changing needs and behaviors and using this knowledge to transform and reimagine how you do business to keep up with them.
As we leave 2018 behind, I predict that the key themes driving transformation of retail over the next 12 months will be convenience, experience and personalization. The retailers who use this change as an opportunity for reinvention are those who will soar past the competition and be here to tell the tale in 2020.
The convenience wars
Increasingly, shoppers expect to be able to check if a product is in stock, available for same day delivery or available to them with minimal effort. Online retailers who organise their product feeds and inventory data to make them ‘queryable’ will win customers looking for a convenient solution.
For example, Google’s work with retail tech startup NearSt aims to boost the number of customers who visit UK high streets. The initiative is try and make it easier for shoppers to find out what is available before heading to their local stores. Nearly a third of all Google searches relate to location, so Google has been working to help high street retailers, in particular, the smaller, more independent retailers.
When searching for specific products, local search results will display stock in local shops, showing both the distance to the shop and the price of the goods they’re looking for. It does this by connecting with retailer’s live inventory information to make it just as easy to shop locally as it is online. Not only will this help to boost the number of customers visiting their local high streets, it will also give smaller retailers the ability to compete alongside e-commerce giants.
The high street fights back
Shoppers will be attracted to stores that use smart technology to add to the physical and sensory experience of shopping. The likes of AliBaba-owned Hema supermarket and Amazon’s Whole Foods stores demonstrate how this approach has been embraced by the Chinese and US shoppers.
In both cases, the retailer has considered how to improve and personalize the shopping experience with easier access to product information, recommendations and a seamless checkout. The fact that two tech giants are behind the stores means that they can use integrated sales and marketing programs to engage with their target audiences in a non-intrusive and smart way – creating a personalized brand experience both online and in store.
As a result, more and more retailers are innovating when it comes to creating a fantastic experience to entice customers back in-store. Topshop, specifically it’s flagship Oxford Street store in London, is a great example of this. From experimenting with VR in the summer to create a water slide experience to personal shopping, hair and beauty services, a cafe and pop-up food and drinks stores, Topshop has created a fresh, exciting in-store experience that keeps it interesting for regular customers whilst delighting new customers.
The high street isn’t dying, it’s just transforming – and the success stories here will be those retailers who have the confidence to make bold strategic decisions to reinvent the role of their high street stores.
Making it personal
Along with a highly convenient customer experience, customers also expect products, services, communications and discounts that are specifically tailored to their needs and buying habits. Long gone are the days of mass marketing communications, the modern customer is complex, interacting with brands across various platforms, in different ways, leaving digital data cues about their behavior as they go. The retailers who use these cues to personalize customer experiences are the ones who will stand out from the rest in the years to come.
One o the main drivers of personalized customer experiences is AI and machine learning technology. AI has the ability to analyze thousands, even millions of data records to create highly accurate customer profiles, allowing retailers to offer accurate product recommendations and tailor content to each individual.
Soon, customers may spend more time engaged with a company’s AI than talking to actual staff. In the same way that staff contribute to positive or negative customer experiences, AI will play the same role and leave a lasting impression which means it can be used to create a consistent customer experience across all channels and interactions.
Clothing retailers such as Levi’s are now using chatbots to help customers find the perfect products for them without having to browse and research thousands of products. Levi’s Virtual Stylifst helps customers to find the perfect pair of jeans by asking them a series of questions around the fit, stretch, rise, wash and their size in other stores. The bots combine this information to deliver the perfect pair of jeans to each customer based on their preferences. These types of apps enhance the shopping experience and allow customers to experience the brand in much more personalized ways.
2019 will spell the end for the retail industry in its current state. The consumer landscape is set to undergo its biggest change yet, and the retailers that don’t adapt are unlikely to survive. On the other hand, the retailers who are willing to transform their business and reimagine their customer experiences will come out on top.
To see Epiphany speak further on this topic, register to attend The Drum's UK Predicitions event on 23 January 2019 in London.
Tom Salmon, managing director, Epiphany
Tel: 0800 019 9727