3 Factors Powering Retail's Evolution
Retail was a vast and varied industry even before the internet, mobile devices and a host of other technologies transformed consumer behaviors and expectations. Since then, the gradual changes implied by retail “evolution” have been replaced by enormously transformational leaps.
Despite this ever-growing complexity, I believe retail today is being shaped (or reshaped) by three key influencing factors: relevancy, synchronization and choreography.
- Relevancy refers to retailers’ ability to meet the needs of their customers in the moment of interaction. It can be as simple as having the right product in the right place at the right time, and can be measured by how well a retailer can cut through the “noise” and make their customers successful.
- Synchronization between online and offline channels is becoming table stakes. Consumers never say “I had a great omnichannel experience,” they say “I had a great (or terrible) experience at this retailer.”
- Choreography represents the way retailers manage the connections among people, products and services. Anyone who touches or triggers any kind of customer experience — even if they're unloading a truck at a store’s loading dock, far from any shopper — needs to have his/her actions choreographed with the overall retail operation.
These big-picture concepts can provide a framework for the decisions retailers make, the technologies they choose and the innovations they embrace. Take the example of digital signage within a store. Proxemic technologies, which react not simply to a person’s presence but to factors such as their distance to the screen and their orientation to the display surface, are a new advance in this area. In addition to touchscreen capabilities, proxemic technology can sense when a person moves away and sits down. When this happens, the display changes from a multipane screen to a single, full-screen display. If the technology senses that the person is doing something else (e.g., answering their phone or reading a magazine), it will automatically pause the video and audio it’s playing.
Retailers do need to address the “creep” factor with any type of customer-facing technology. One solution is to acknowledge its use, as London’s House of Fraser does with proximity beacons placed on its mannequins. The mannequins “ask” shoppers to approach, making the use of this location-based technology expressive rather than latent. Letting consumers know what beacon technology will do to enrich their lives, or at least their shopping experience, can remove much of the potential for discomfort.
At the same time, retailers shouldn’t be afraid of investing in what might seem far-out technology. Surveys indicate consumers are more than willing to try new things. Consider the following:
- 35 percent of consumers said they would shop more online if they could try on garments virtually, using a product such as Oculus Rift;
- 49 percent of European consumers would like to see biometric technology emerge as an alternative method of payment;
- 60 percent of U.S. customers consider themselves “phygital,” that is, comfortable in both the physical and digital worlds; and
- 66 percent of consumers expect their first drone delivery of a package will take place within the next five years.
Not that I’m advocating technology simply for technology’s sake. Any investment needs to be evaluated through three lenses:
- Behavioral: Does it remove friction from the shopper’s journey?
- Emotional: Does it enhance the shopping experience in some way?
- Transactional: Does it enhance the consumer’s intent to buy?
Let me leave you with a definition and a prediction. Here’s the definition: Innovation occurs at the intersection of previously unconnected and unrelated planes of thought.
Here’s the prediction: The future of retail is a seamless, highly tailored, curated journey, with no competition between channels, and including the best of the real and virtual worlds in order to exchange value for value.
Lyle Sandler is the vice president of design and customer experience at NCR Corporation, a provider of consumer transaction technologies.
