The old face of retail is being disrupted by new technologies and digital behaviour. But it will be those who can harness this technology to improve shopping experiences for consumers who will succeed. Jen Faull explores some of the themes addressed in the retail installment of The Drum’s Day Before Tomorrow documentary series, produced in association with SapientNitro.
Of all sectors to have been disrupted by technology, retail has been given the most attention over the past few years. In an industry facing countless challenges, technology is also relentlessly reshaping every aspect of the retail experience; from where we browse and buy to the way we choose to pay and how it gets delivered.
Players like Amazon and Apple have thus far been ahead of rapidly changing consumer behaviour; with the former now experimenting with drone delivery and the latter allowing people to pay in-store with a few taps of their phone.
And today, traditional retailers like John Lewis, Argos, and Burberry are ramping up their efforts to start futureproofing themselves. But what are the innovations getting the industry excited? And are retail bosses approaching them in the right way?
Stuart Marks, investor and backer of the John Lewis JLab scheme, states that innovation is on the mind of every chief executive behind a large company.
“There's no chief executive or board that isn’t obsessed about innovation,” he says. “The things that marks one retailer or one large organisation out from another is how well they’re executing it.”
For Antonio Hidalgo, chief innovation, marketing and strategy officer at Phillips, that means sticking to three basic rules when developing a new digital offering.
Firstly, he urges retailers to consider why they are developing the new offering in the first place.
“It’s sometimes easy to forget who you’re doing this for. We believe that the sweet spot of any winning innovation company, and certainly what we aspire to be, is where innovation meets people.
“We’re all technologists. I’m a technologist. I love technology, I love science, but I have to have the discipline to ask myself, am I doing this for the consumer, or am I doing this for myself?” he says.
Secondly, the technology has to create a richer experience for the consumer, says Hidalgo. “The days where I could sell you a product in a box and walk away are long gone. Consumers want to know how they will interact with the product and how other people are interacting with it. Help them make the most of the product and create a service around that proposition,” he adds. Finally, he advises all retailers to look outside of their company for innovation. Collaboration is key.
Mobile has been the cornerstone of retail innovations as brands attempt to tie together the convenience of e-commerce with the physical store experience. Indeed, the winner of John Lewis’ innovation incubator was Localz, which aims to make the consumer journey easier by alerting staff when a customer comes into a store for a click and collect order, for example, or navigating the customer via their phones to wish list items. Rather than ‘spamming’ shoppers with offers, instead, it’s based on creating a better experience for them in-store based on their online behaviours – a key trend according to Nic Brisbourne, managing partner at Forward Partners.
“If you look at the high street now, it’s much more about experiences and less about shopping than it was 15 years ago. The best retailers are increasingly thinking about how to make it more fun and interesting to be in their shop. You need to think about making great experiences for your customers first and foremost, rather than ‘how do I sell product’,” he says.
Elsewhere, 3D printing is facilitating new experiences by allowing people to create their own products. Jo Roach, co-founder of MakieLab, a company which 3D prints dolls designed by consumers themselves, recently inked a deal to sell through UK department store Selfridges.
Currently, people can sit in a specially designed area within Selfridges and design their own doll with a sales assistant and iPad. However, this has proved challenging as people are still inherently used to going to a store, buying a product, and taking it home that day.
“Makie is very different to the traditional model. Getting people to change behaviour is really hard. It tends to be that behaviour changes and then you design for it and I think that will happen with us,” says Roach.
Data is vital for retailers to understand these changes in behaviour. Aside from improving the customer experience in-store, Chris Locales – the founder of Localz – is able to help John Lewis harness data on how consumers shop offline.
“We can provide information to a retailer to show when shoppers are in a store, what they’re doing, what aisles they’re in, where they are dwelling, foot traffic, and those sort of metrics,” he explains.
But what about the ever-pressing issue of consumer privacy? While privacy issues remain front of mind for consumers, retailers must act to resolve them, according to Marks. This means communicating the value and improved experience. “If the ultimate output is you’re going to have a better shopping experience, I think people are going to like that,” he says.
This feature first appeared in The Drum's 10 December issue, published today.