Future-ready Retail: How Companies Can Boost Success in a Changing Landscape
In the increasingly digital world of retail, shoppers’ expectations are changing – and new technologies will help companies meet them.
At the 2019 National Retail Federation (NRF) Conference Big Show, plenty of ‘shoppable’ screens, interactive surfaces, and smart-home technologies were demoed on the expo floor. But the speakers upstairs reminded attendees that retail innovation is not about shiny objects; it’s about improving shopper experience and creating a more engaging path to purchase.
As companies ramp up to future-readiness, they must focus on the desirability, feasibility, and viability of their technology investments. Meaningful retail transformations use technology to drive long-term growth by making shoppers’ lives easier.
Desire Drives Value
Nicholas Goad, Partner & Managing Director at Boston Consulting Group, advises business leaders that constant transformation is essential to success. But when retailers race to embrace technologies for trend value, they put their success at risk.
At NRF 2019, Goad told retailers they must focus on “winning in the medium term” to stay in it for the long game. Winning – or even just competing – means using technology to understand what consumers want, and give it to them.
Desirability, rather than industry pressure, is the lens retailers should look through to consider new investments: What more does this give my shopper? Does this add value to their experience? Leaders in retail and digital commerce are using tech to augment the shopping process and make people more confident in their purchases.
StubHub, for example, uses 3D modeling to give ticket buyers a 360-view of their seats at the stadium. Macy’s is deploying augmented reality and virtual reality (AR & VR) solutions in its home decor department, helping shoppers design rooms knowing exactly how new furniture items will look in their spaces.
Trends creating value in some sectors, however, pose little benefit in others.
AR is a natural fit for interiors, because shoppers have always used drawings and 2D renderings to understand spatial fit. In grocery, AR has no real customer problem to solve. There’s no driving need – or feasible use case – for people to see their digital groceries in the pantry before buying.
Feasible for Today and Tomorrow
The digital shifts taking hold in grocery have a clear relationship to convenience. ‘Click & collect’ grocery pickup is growing in popularity, and recurring online purchase bundles – or ‘rundles’ – are poised for a big 2019 (according to tech expert Scott Galloway, who spoke at NRF).
As retailers explore things like click & collect, they have to put feasibility front and center. The value for shoppers is clear, but how adaptable is staff to the change? How easily can the solution integrate into existing stores?
Feasibility also demands consumer insights. Retailers have to know their shoppers well to discern what they’ll respond to, and to deliver consistent experiences they’ll adopt, use, or enjoy.
Integrating physical and digital shelves makes that possible. Hershey, for example, collects information at 54 different touchpoints (offline and digital) of the consumer journey – helping to understand each shopper's mission and meet them in a consistent, personalized way, regardless of channel.
Conquering that kind of scale takes time and testing. Reaching future-readiness often means starting small and then growing the scope of transformation based on wins and learnings over time.
When retailers take a platform-based approach, those learnings drive viable business growth, too.
Viable for the Business' Future
Platform models build on a retailer’s existing offerings while creating network-effect benefits that enhance experience and trust. They enable ongoing prototyping and iteration, which (over time) helps retailers weave in new revenue streams or reimagine business lines.
Some platform models use digital technology as a foundation for new opportunities. At NRF, IBM’s Bridget van Kralingen discussed how blockchain technologies for supply chain support business models driven by transparency, provenance or safety — such as ethical diamond mining for jewelry production.
Other models reimagine physical spaces into platforms for new consumer purchase paths. An example is Casino, a French grocer whose approximately 9,000 stores all offer distinct experiences by floor: Each store has traditional grocery on the lowest floor, a terrace bar/restaurant the next floor up and a coworking space on the top floor.
Casino manages a symphony of technologies to make the model work, and the economics are much different than traditional grocery. Many shoppers spend hours upstairs coworking, then grab dinner to-go at the end of the day. But, every Casino store is profitable because experience is at the center of everything they do.
“We offer a completely new experience,” said Cyril Bourgois Chief Strategy, Digital & Innovation Officer of Groupe Casino at NRF. “If we want to keep customers coming to our stores, we have to provide a better experience than they can get online.”
