Greetings retailers and welcome to another edition of Retail Details: Your one-stop source for all the latest tips, trends, and news in the world of retail. Today’s installment will feature some of the key highlights from NRF 2017!
1. Brick-and-Mortar is here to Stay
If somebody asked you, what percentage of retail sales were completed online in 2016 what would your answer be? Mine, most certainly would not have been 10%……but that is the correct answer. The reality it that we are all overestimating the speed of adoption of e-commerce. In Stratacache’s presentation, “Inside the Store of the NOW” they reviewed examples of digital-first retailers that are now getting physical. These retailers see the benefit of having brick-and-mortar stores and they have the key advantage of knowing a lot about their customer before opening up their doors. Some of these retailers are shown below. Furthermore, in a study carried out by ForeSee, 60% of shoppers indicated that they would like Amazon to have physical stores. So once again, if we look at the statistic from above from a different angle, 90% of retail sales are being done through brick-and-mortar locations. This means that in order for a retailer to be successful, this channel MUST not be ignored.
2. Launch of new standardized retail training program – Rise Up
On January 15, in his “Welcome” address, the NRF President and CEO Matthew R. Shay announced the launch of a ground breaking training and credentialing initiative designed by the retail industry to help people regardless of education, background, economic means or age to acquire the skills they need to land jobs in retails and advance their careers. At that time, already 21 companies pledged their support including the Disney Store, Walmart, Under Armour and Macy’s. The name of the program is RISE-Up (Retail Industry Skills & Education). This comes from the realization that the industry is becoming more sophisticated and that there are 700,000 unfilled jobs in the retail industry due to shortage of qualified applicants.
3. Innovation is required at all customer touch points
Stores Convention Daily released a comprehensive list of predictions for the retail industry in 2017. One of the major expectations is that machine learning will revolutionize retail by allowing retailers to process large amounts of data to discover patterns that can be used to analyze data and allow them to peek into the future and simulate scenarios and predict outcomes. Bots and conversational commerce is another AI trend that is becoming quite popular. It allows for “conversations between retailers and consumers and makes it possible to use a smartphone to ask questions, place orders and get advice (i.e. H&M chatbot). Another way that retailers can get an edge over their competitors is by engaging in non-traditional partnerships and collaborations that offer new value to shoppers, complement retail strategy and extend brand reach. Target has been connecting with upscale designers, while still respecting their value-sensitive shoppers, by creating affordable collaborations such as the upcoming Victoria Beckham special collection. The underlying theme of these predictions is clearly “innovation”. Consumers are developing very concrete expectations on how they want to interact with brands and retailers and it is important to remain vigilant and respond to their needs.
4. Fourth industrial revolution is here… in RETAIL!
Kate Anckethill from GDR Creative Intelligence highlighted the fact that we are currently in the 4th industrial revolution. She began the presentation with a scary statistic from The British Retail Consortium that forecasts 1/3 of retail jobs will disappear by 2025 due to automation and the increasing minimum wage. Another term that was coined for this is “technological unemployment” and countries like Switzerland have already began considering implementing a universal benefit to get ahead of this large scale unemployment. She went through nine areas of available technologies in which retailers can adapt and get ahead and provided real-life examples of innovation across the globe. One example of these innovations is the back me up App which is being used in the UK. The app simplifies the concept of insurance and allows the 17-49 year old users to insure up to three items by simply uploading the photos of the items on the app. ICA grocery delivery from Sweden uses smart locks and lets the supermarket staff deliver directly into the homes, and into the fridge. Essentially, customers want retailers to speak their language, simplify their life and serve them 24/7 and this can only be done by enhancing services with new technologies.
5. To win, a retailer MUST understand the complete customer journey!
ForeSee did a comprehensive study to understand customer experience and customer journey. L.L. Bean was highlighted as an example of a retailer that is incredibly successful in bridging the gap between mobile/online and in-store experience by providing all necessary information on a single screen and creating great product videos that make customers more comfortable with purchasing online. Based on this concept of customer journey and its different starting points, it was suggested that in-store conversion may not be a useful tool for retailers. Additionally, it is important for a retailer to understand its customer demographic and the path-to-purchase of different customer groups: Millenials, Gen X and Baby Boomers. Lastly, by cleverly stating “A Cart is not a Cart” ForeSee brought up a statistic that alluded to the fact that shopping cart abandonment should be another metric that should be reconsidered. According to their research, 41% of shoppers use the shopping cart simply to tally their order or as a wishlist, with no intention to purchase in that session. In summary, a retailer must be provide a seamless experience across all channels of engagement and understand the beginning and the end of the customer journey.
Thank you for reading another issue of Retail Details! We created this series to provide key insights on the world of retail and help every retailer from small to large be at its best. For more tips, tricks, and trends, sign up for our Newsletter and connect with us on LinkedIn & Pinterest.