Over the past few years, retail industry has been both
enabled and disrupted by technology. Online retail has created newer service
levels for consumers, thus, challenging traditional retail to catch up. Traditional retail, in turn, is re-inventing
the customer experience at stores and experimenting with omnichannel. In this context, the 5 hot retail trends to
watch out for are:
- Personalization – Retail is moving from a ‘one-size fits all’ model to a personalized model. The key driver in this trend has been online retailers (like Amazon), which churn out millions of personalized offers for its customers. It is enabled by technology which can identify individual customer preferences and offer related content about promotions, events, product launches, etc. resulting into higher conversions. Departmental store retailer John Lewis is making use of beacon technology to deliver personalized messages in-store.
- Omnichannel, the anytime anywhere retail – Omnichannel retail is the peak of maturity wherein a retailer operating in multiple channels (like store, online, mobile, TV) provides consistent shopping experience to the customer. Fashion retailers like Macy’s, Nordstorm are pioneers in providing visibility into their inventories and customer data across channels. Others face challenges in terms of tweaking business processes for cross-channel fulfillment, customer returns, attributing sales to a channel and the like.
- Shrinking Stores – Retailers are stringently reviewing operational costs as more sales are being poached by online retail. Real-estate being a major cost, loss-making stores are being shut down and new stores are being launched in smaller square-foot area. Even though US has the highest retail square footage (47 sq.ft. per capita), sales per square foot is continuing to decline. In 2016, Macy’s shut down 36 stores, Best Buy closed 30 stores and Walmart has announced 269 store closings.
- Experiential Retail – E-commerce evangelists may pronounce the end of physical retail, but it will merely transform to a more experiential form providing social gratification. This new era of experiential retail will convert a mundane shopping experience into fun through value-added services (like coffee-shops) or technology enhancements (like augmented reality, interactive technology,etc.). French sports retailer Decathlon has created basketball and volleyball courts besides it's stores in India, where people can play free-of-charge.
- Technology Disruption- The current technologies are more of disruptors than mere enablers. In the store, beacons, mobile and wearables technology are enabling personalized shopping experience. Virtual reality is offering shoppers an option to virtually try-and-buy products. Robotics is being experimented for shopping carts by Walmart. Artificial Intelligence (AI) is powering voice recognition technology to place orders and automation through bots. Internet of Things (IoT) is connecting millions of low-cost micro-devices to collect data and provide valuable insights in customer buying behavior, with the help of advanced analytics.
Disclaimer: The blog is based on my personal experiences and strictly reflects my individual opinion.
