Since the day Amazon began offering free one-day shipping, nothing in retail has been the same. Digital transformation (in the guise of “the Amazon effect”) has dramatically impacted every facet of the industry. As a result, we’ve seen some of the mall anchors move on, and innovative new players move in.
Beyond Amazon, the combined shopping power of Gen Z and Millennials is also driving change. These digital natives, who comprise the largest generation of shoppers ever, expect to be able to buy when, where and how they want. They want access to fast, digital payments – without lines – and hassle-free returns. As one expert noted, “They were born into a world with this technology and access…They expect to be able to transact wherever and whenever they want to. It’s an amazing amount of people and an amazing amount of spend.”
The retail evolution is ongoing, and change is constant. From innovations like Square and Clover to drone deliveries, every day brings a new adventure. So, what will “normal” look like from now on?
For starters, the new normal is data-driven. If, as a retailer, you don’t have troves of data on your customers, you’re setting yourself up for failure. One of the reasons so many of the new pureplay ecommerce brands are doing so well is that they know what their customers want. They study customer data to understand what their shoppers love and hate about their products and services, to learn where else their customers shop, and to see who exactly their audiences is, demographically.
Not only does this help brands to put the right amount of the right product on its shelves (or in the case of Peloton, no products on their shelves!), it also enables them to personalize communications for better customer experiences, both online and in-store.
AI will play a bigger role in the day-to-day of retail. The youngest subset of digital natives have never known a world without AI, either. Never have they shopped online without being informed of what they might “also like.” Retail Dive predicts these young consumers will rely “increasingly on technology to support their needs, aspirations and desires. As these consumers begin spending their own money within the next decade, rather than having to research product specifications, ratings or prices, they will expect the best offerings to be preselected for them.”
Beyond recommendations and hyper-personalized shopping experiences, AI will be put to use in other areas of retail. For the last few years, NRF attendees have been hearing about how AI will be used effectively for forecasting. While there doesn’t seem to be a solid enough foundation in historical data at this point to fuel the machine learning necessary to forecast accurately, this does seem to be on the horizon. The buzz at this year’s event is that AI-powered forecasting simply isn’t ready for prime-time. Yet.
Mobile payments will also matter. As referenced earlier, mobile payments in-store play an important role in retail’s transformation. For years, we’ve been hearing about expedited checkout services – everything from customer service reps walking the floor with mobile card readers, or NFC systems like Amazon famously used in its Amazon Go store – but we’ve seen little come to fruition to date. But what retailers must learn is that mobile payments, and particularly in-app payments, not only drive better customer experiences, they also deliver more data, making for better experiences in the future.
Finally, location-based insights will continue to play a critical role in all aspects of omnichannel retail. Understanding as many facets of the customer as possible is key in delivering the personalized experiences modern shoppers expect. Real-world insights gathered from mobile data can fill in many of the gaps in the data retailers have today. These valuable learnings can help connect the online and offline shopping experience, driving up both customer loyalty and sales. Since consumers can now shop anywhere, anytime and on just about any device, those real-world insights can provide the exactly the view retailers need to get them the items they want, exactly when, where and how they want them.
And that – empowering shoppers to shop when, where, and how they like – is really the heart of our new omnichannel normal.