Like all sectors, retail is undergoing a transformation and must respond to the forces of the fourth industrial revolution and major social changes. The trader’s ability to connect with consumers is more critical than ever, as shopping habits continue to change amid the global economic disruption caused by the pandemic.
Read on to find out what retailers need to know so they can adapt and succeed in 2021 and beyond.
1. Retail is now omnichannel. We live in a hybrid world where online and offline connection merge. New channels are emerging, such as voice (think Alexa and Google Home) and other smart devices.
With these changes, machines will become more and more customers for retailers. For example, appliances like refrigerators might decide it’s time to reorder food. Our cars could seek services or pay for parking automatically.
The Internet of Things and sensors allow companies to collect data and metrics through these different channels and need to get a comprehensive view of their customers.
Companies like Burberry have made great strides toward an omnichannel world. If a customer enters a Burberry store, the store’s computer system can identify the items the customer has looked at online and even check their previous purchase history.
Bringing these channels together is a key trend for retailers in the future.
2. Creating smarter services with AI is key. Retailers can now build on the data they have and use it to create smarter, AI-enabled services. Customers will expect sophisticated levels of personalization from retailers, so recommendation engines are becoming increasingly important.
I recently wrote about Vivino, the wine app that has the “Match for You” feature. You can scan any bottle of wine with your phone and Vivino’s recommendation engine will tell you how likely you are to enjoy it.
Artificial vision also makes retailing smarter. Amazon Go, Amazon’s physical stores, use automatic vision to keep track of what customers are looking at, what they put in their baskets, and then they’ll be automatically charged. Guests can exit directly through the door instead of standing in line to make the exit.
3. We live in an economy of experiences.
Retailers now need to add value to customers, so they can enter physical stores or their websites. We now live in an economy of experiences, where the creation of immersive experiences will no longer be optional: it will be crucial for retailers who want to thrive in a post-pandemic world.
Gucci’s flagship store in Italy is an excellent example of customer attraction through a mix of cafe, museum, art gallery and shop. Talk about added value!
Retail stores may also consider using augmented reality (RA) or virtual reality (VR) to give the customer more information about products in stores and online. TOMs Shoes helps consumers see the impact of their one-on-one delivery campaign with a virtual reality experience that virtually transports people to Peru.
4. Facilitate the purchase. I refer to this text as “Look at it, like it, buy it.” When we see a product on TV, video games, or YouTube, we want to be able to buy it right away if we like it. This shopping experience should be frictionless.
This is already possible, under certain circumstances. When we listen to a song on the radio or when we are in a cafe, we can identify it using the Shazam app on our phones and the app will ask us to buy it. In the future, we will have this capability on YouTube and other online sites, so the ability to buy something right away is a major trend for retailers.
5. Subscription templates trim the broker. Now, many organizations go straight to customers and realize that this allows them to establish much deeper relationships. It also provides them with access to valuable customer data.
Companies like Dollar Shave Club and Black Socks are pioneers in this approach with subscription-based services for razors and socks, delivered monthly or quarterly. BarkBox also uses this direct approach to the consumer to sell personalized dog food in the form of a subscription.
This is a very important trend for those retailers who are considering it right now. Organizations will need to find the right balance between retail and selling through their own channels.
6. Retailers are exploring autonomous delivery and realization.
Many retailers are looking for ways to automate the supply chain and delivery methods. Companies like Ocado, the technology company that develops software and automation systems for retailers, are doing very well. They help retailers create highly automated warehouses with large hives of robots working together to create different shopping baskets for customers.
When it comes to delivery, we’re also starting to see things like autonomous trucks and ships delivering goods. I live about 50 miles north-west of London, and here we have Starship Robots offering my local grocery shopping. Retailers should expect to see more and more automation in the future.
7. Supply chain transparency is becoming increasingly important.
Supply chain transparency allows companies to not only understand demand at a more detailed level and therefore make predictions about what consumers really want, but also use IoT devices and sensors to track demand. things in your supply chain.
Increasingly, organizations are using blockchain technology to make supply chains more transparent. For example, companies like De Beers Jewelers can now trace their diamonds to the sources where they are mined, produced, and cut, so that customers understand exactly where their jewelry comes from.
8. People are increasingly consumer conscious.
This eighth trend is closely related to the previous one. Consumers want transparency when buying from retailers. They care about sustainability and are increasingly aware of the environmental impact of the products they buy.
In the future, we will have more product labeling that includes sustainability information, such as carbon labels, food mile labels, or sourcing information. Retailers need to be thinking in advance about how they will store the shelves and be prepared to answer customer questions about the sustainability of their products.
Retailers who want to compete in the future need to address all of these trends. To learn more about future technology and business trends, subscribe to my YouTube channel or visit my website, BernardMarr.com.