The way time-crunched, always-on consumers shop and the ways in which savvy retailers and marketers appeal to them are transforming. And there’s no better place to plug into the current state of affairs and get a taste of the future than the National Retail Federation’s Big Show. Lat month in New York, exhibitors large and small announced their latest and greatest, while brands showcased cool new things, from augmented reality technologies to radio-frequency identification devices (RFID).
Stepping back for a minute from the nifty demos, there’s a common theme in retail’s future: focus on the customer and their experience. In a world where Amazon.com owns price, selection and convenience, the main weapon in a retailer’s arsenal is the relationship, and relationships are built of experiences.
Lots of attention at the Big Show was pointed back at the basics — order management, fulfillment solutions, inventory tracking, and more. However, retailers are leveraging those foundational systems in exciting new ways to deliver updated experiences for today’s hyperactive, channel-agnostic consumer.
Despite a focus on the basics, there were standouts at this year’s Big Show. Here’s a look at the current trends we can expect to be relevant throughout 2016:
The Explosion of RFID
Over the past year, RFID has quietly crossed the chasm and found firm footing in retail. The ability of sensors to track a shopper’s interaction with an item creates the opportunity to enhance the experience and thereby boost overall customer satisfaction and sales. The data stream from RFIDs will enable retailers to see consumer behavior in a whole new way. Over time, RFID will have a huge impact on the way retailers interact with their customers.
For example, fashion retailer Rebecca Minkoff demonstrated an innovative implementation of RFID at the NRF Big Show. Upon entering a Rebecca Minkoff store, shoppers see a wall of screens. They can interact with video on the screen, for example pausing the images of models showing off Rebecca Minkoff clothing and accessories on the runway. They can use the screens to order a free cup of coffee or glass of champagne. Or they can flip through an electronic catalog to view Rebecca Minkoff's designer styles in different settings, as well as see what product is available. When a shopper makes a selection of items she'd like to try on, a store associate brings the items to the fitting room.
Beyond the first-class experience this creates for the customer, think about the value of the new data that's being generated — what styles went into the dressing room but weren’t purchased, which styles were consistently exchanged for a larger size, etc. By innovating along the customer journey, Rebecca Minkoff has both created a better customer experience and generated data that can be used directly to improve business results.
Is the IoT Over, or Just Not Ready for Prime Time?
While the Internet of Things (IoT) had a substantial presence at the event, its hype volume wasn't what I expected. Primary exhibits were RFID tags and beacons supporting inventory awareness and personalization. Overall, the focus was on the broad trend toward creating a seamless shopping experience.
That’s where the focus should be. There are so many innovations in so many directions that brands are experiencing technology overload. They're hesitant to integrate the newest technologies until solid use cases are established. IoT is happening — think of your fitness tracker and WiFi scale — and it will certainly affect retail. But a pragmatic approach at this stage, in retail, will make it more likely that your IoT implementation will be successful in the long run. I expect we’ll see solid examples emerge during the coming year, and the industry will expand from there.
Data, Data Everywhere
It’s time for brands to establish true relationships with customers. The road to building a relationship begins with understanding each shopper. That means using the extraordinary amount of data that retailers have on shoppers. First, retailers need to consolidate their data and gain full access to it, optimally in real time. Second, retailers should use data to gain insight into customer behavior. Most important is taking action on that data, using it to enable an optimized experience for each customer.
The store of the not-so-distant future allows associates to make offers and create experiences based on the real-time context of each customer at that very moment. Five years from now, retailers will create individualized experiences based on who each shopper is and their activity through every touchpoint. These one-to-one experiences will feel like one-of-a-kind experiences that tie customers to the retailer.
Fundamental to retailers’ success in the future will be their ability to adapt to consumers’ expectations. A sub-theme at the Big Show was one of worry about the expectations of the millennial generation. Retailers are clambering to make sense of their buying habits. Millennials are less loyal to traditional brands and more responsive to a narrative and sense of purpose. Recognizing that difference will allow marketers to build relationships based on those specific drivers.
Experience is the Last Battleground for Consumers
In that sense, marketing to millennials isn’t any different than marketing to any other generation. The last battleground for consumer attention is the experience. There was a consensus among retailers at this year’s Big Show that experience is what matters. That thread, and the desire to transform the retail business into a consumer-centric model, ran through the entire event. Retailers must build the capability and capacity to create unique experiences — for each customer — that build brand affinity and loyalty.
The NRF Big Show is special because it provides a view into the future of retail. The future I saw at this year’s show is here today.
Lucinda Duncalfe is CEO of Monetate, a provider of multichannel testing and personalization services.
Lucinda Duncalfe is CEO of Monetate. A seasoned entrepreneur and innovator, Lucinda has proven experience building mature sales and operations cultures, and developing product strategies that accelerate company growth. She has served on Monetate’s Board of Directors for the past seven years, and helped Monetate create and establish a multi-billion dollar market for digital personalization.