This is the first in a series of articles exploring how much-discussed new technologies work and why they’re game-changers for retailers. If you’ve heard about blockchain, AI or other technology, but don’t have a full view of the possibilities they bring, subscribe to our blog to make sure you get all these insights.
Technology is driving the most challenging reshaping of retail in history. Not only have new technological developments created new shopping experiences that customers prefer, but they have brought about greater competition and customer demands than ever before.
It’s imperative that retailers embrace these technologies, both in terms of customer-facing solutions and internal business processes. But to do this effectively, retailers must understand where to focus their investments.
This is not a new phenomenon. Every major technological advance, from the printing press to the light bulb, changed how we lived our lives. Yet recent developments have had a more profound effect on how we act and think, and the pace of this change is unrelenting. We see its effects most strongly in the ways that Millennials and their younger siblings, known as Generation Z, think, learn, socialize and play. But the effects of technology on day-to-day life aren’t difficult to see among any age, or any culture:
Life is always on. Thanks to mobile devices that deliver email and other communications 24/7, people no longer “switch off” – many of us think nothing of responding to work emails on weekends, and this extends to shopping or making purchases at any time of the day or night.
Loyalty is flexible. Brand and banner loyalty are both a decreasing commodity with consumers demanding an ‘on demand’ service and will move to whoever can provide this best
Impatience is the default state. Tolerance for waiting for anything – whether for a delivery, a restaurant table or a checkout line – is diminishing rapidly. Research shows that today, more than 90 percent of customers will not go into a store if it looks busy. And your website must load within three seconds, or a customer will close that tab and go back to searching … soon to become someone else’s customer.
“Attention deficit” is a state of mind. Alongside this impatience is the need for speed, as our attention spans are getting shorter. Again, research has shown that today’s average website visitor looks at online content for less than 2.5 seconds before moving on to the next item. With such a volume of information in today’s world, your ads and offers must be relevant and remarkable to stand out.
Out-of-stock is unacceptable. Customers are less open than ever to substitutions. If the first-choice is not available, a substitution is no longer automatically acceptable – especially if another store, or Amazon, can deliver the customer’s first choice at once.
Data privacy is a factor – but comfort levels are higher. Despite a heightened awareness of data collection and privacy issues, there is still a more relaxed attitude toward data-sharing, given a better understanding of the role that data is playing in personalization. And last but not least, speaking of which …
Personalization is a must-have. People no longer want a generic experience, especially if the product or service you provide is being positioned as something other than “economy” or “discount.” Your customers want products, promotions and service tailored to them – and they’re willing to share data to make those experiences possible.
The bottom line is that retailers must invest in new technologies to meet these new demands. For many years, retailers have competed among themselves to deliver customer experience, but many operated in similar ways to do so. But now, Amazon offers free delivery, a wide variety of extras and unrivaled customer service. In the brick-and-mortar world, Apple stores break many of the rules of retail, including employing a large number of sales associates, while companies like Farfetch invested the stores of the future, despite being predominantly an online retailer. Many of these organizations have deep pockets and can experiment in ways that traditional retailers cannot.
But the key thing to remember is that there’s no financial barrier to the fresh thinking that these innovative retailers have brought to the table. You, too, can identify opportunities to implement technology that will help you answer key questions about your customers and solve the business challenges of today – while anticipating the challenges that will impact you tomorrow.
In the weeks ahead, I’ll dive into these challenges with high-level overviews of new technology to show the granular ways these technologies are being implemented by winning retailers worldwide. In the meantime, learn more about how technology is changing the retail business, download our new book, Retail Reimagined for Dummies, and discover how retailers are evolving their processes and taking advantage of new innovations.