There’s an eagerness among industry leaders to understand and leverage the new technologies that can intimately connect brands and consumers in a way we’ve never seen. In this uncharted quest to be crowned royalty of disruptive domination, there’s very little benchmarking and even fewer companies collaborating out of competitive fears. With more buzzwords than ever flying around, we were interested to see what initiatives are being prioritized, what’s being accomplished, and what the impact has been. Remodista Collective Think is a platform for industry leaders who are driving these initiatives to come together and talk about their progress, share experiences and figure out the best path forward.
In our latest Collective Think workshop, we gathered 57 retail leaders representing companies including Keds, L’Oreal, Victoria’s Secret, Saks Fifth Avenue, Revlon and Burberry to discuss how they’ve navigated the following areas:
- customer experience (CX);
- Internet of Things (IoT); and
- artificial intelligence (AI).
In this article we will highlight the key trends we identified and share expert insights gathered around these topics, along with the unique challenges facing today’s retail industry and what brands are doing to implement "constructive changes" within their existing business infrastructure.
The Race for Meaningful, Real-Time Customer Experiences
CX is front and center on the retail agenda. Our community of experts emphatically highlighted importance of using emerging tech to deliver a customer-centric approach. They placed a heavy emphasis on advocacy over upselling, personalization and fostering more meaningful connections with consumers. As an industry, it’s clear we’re still very focused on the customer’s shopping experience and how new trends and technologies are specifically impacting the core part of the retail journey. Until that's fully understood, adjacent commerce mechanisms will be less urgent.
Challenges around predictive personalization and instant gratification were specifically highlighted in multiple cases. They're important elements for creating the meaningful experiences that brands are chasing and customers are craving. Not only do we need to personalize, but retailers need do so in real time. However, according to the Harvard Business Review, despite feeling the pressure, many retailers have been unable to fully execute here. Seventy-three percent of consumers feel brands have failed to engage them in a personalized way. Out of our Collective Think respondents, 23 percent were actively leveraging data platforms that would be considered fundamental in driving strategic initiatives around creating real-time personal experiences.
The key challenge here, noted in the Collective Think, is understanding and embracing data platforms needed to create real-time personalization. And if this job wasn’t big enough, while being mindful of the growing mistrust between brands and customers as it pertains to data collection. The SAP Consumer Insights report revealed that violation of this privacy has its consequences — 79 percent of consumers reported they would cut ties with a brand if their data was used unknowingly.
As new movers grapple with the urgent need for data and the risks of collecting and maintaining it, making these personalization-driven technologies more approachable and transparent will be critical. Doing so will notably ease the anxiety of retailers that are trying to keep pace with first movers while navigating this tricky challenge quickly.
Improving Comprehensions and Navigating the Challenges of AI and IoT
If there’s one thing that won’t be a problem for the retail industry in the coming decades, it’s growth. A report by Business Insider Intelligence has projected that AI will boost profitability in retail by nearly 60 percent by 2035. By 2020, leading research and advisory firm Gartner estimates that 20.4 billion "things" will be interconnected. Beyond being the buzziest of buzzwords in 2018, artificial intelligence and IoT are going to be fundamental to the evolution of retail.
Not surprisingly, the first exercises and experiments involving the application of AI and IoT center around the ever important CX. Even more specifically, around the idea of convenience. Retail leaders from the Collective Think exhibited a sound understanding of how ultra-convenience is rapidly changing customer relationships with brands, and clearly understood the urgency around building an infrastructure that enables them to leverage tools and services to fulfill this emerging consumer demand.
Gartner predicts that by 2020, 85 percent of all customer interactions will be powered by AI, which implies by 2020, retailers will either be fluent in AI or be gone. Forrester reinforced that with its projection that companies using AI-powered consumer insights will gross $1.2 trillion per annum from their competitors.
Many in our community took an early adopter stance and seemed to be well down the path to deeply understanding the current uses and application of AI in the market. Retail experts were seeing it as a gateway to more meaningful human interactions and higher profit margins. However, they talked about the struggles around ethical data sourcing and security, along with the high technical proficiency needed to create an advanced AI strategy, noting the learning curve was rather steep beyond the initial applications.
These concerns were echoed in talks around IoT, which has been instrumental in retailers’ ability to keep up with consumer expectations. Our leaders noted that with access to multiple purchase points, consumers are experiencing more intricate connectivity between online and offline experiences. That means organizations will have to invest significantly in educational initiatives, infrastructure building and additional security. All of these come with exponential increases in the vulnerability that IoT brings.
Failing to properly execute here can lead to serious backlash, as retail leaders discussed the risk of misfires. It’s well known that Facebook’s business model uses AI to predict user behavior, and then turns around to sell that data to advertisers. The controversy around Facebook’s (mis)use of user data is well documented in the media, but the repercussions have been abysmal. Without a code of ethics or regulatory enforcement to set parameters around AI, companies are left to steer their own moral compass. They wade through grey areas in relation to the sea of data these technologies both create and use.
Benefits and Rewards: Build Tech-Enabled Experiences for the (Human) Consumer
The Collective Think revealed that leaders in retail are indeed eager to build bridges and fill the gaps to keep up with the changing landscape. What's also clear is that they're facing difficult challenges as they dive deeper into the rabbit holes of the tech that's making change possible. In 2019, innovation will be hailed as both an emotional currency and data-driven practice, with the power to yield constructive changes in nearly any type of organization should they dedicate the time and resources to executing at the highest level. Failure to do so will set companies back in more ways than one, including social backlash, competitive standing and inferior overall experiences.
For those that make the commitment, like many of our Collective Think members who have dedicated time to learning and collaborating, the future looks bright with growth. Waves of new consumers are entering the funnel, armed with big expectations. For the brands that create streams of information across a multitude of channels that serve consumer needs and reflect real customer advocacy, the rewards will be well worth it.
According to Adobe’s annual Digital Trends report, companies with a comprehensive CX strategy are nearly twice as likely to achieve their business goals. The same report found companies that valued creativity and invested in design were significantly more likely to exceed their business goals. In other words, forward-thinking organizations are getting ahead not by throwing technology at their problems, but by executing on a multidimensional approach using creativity, data and consumer insights.
Without a doubt, 2019 has tremendous potential, but we expect the pack to be narrowed significantly by the end. Retailers that commit the resources and capital to execute on a refreshed strategy; adopt and implement new technology; and deliver an exceptional, humanized customer experience will emerge as clear leaders, and laggard brands will be left in the dust.
Kelly Stickel is the founder and CEO of Remodista, a social think tank examining global retail disruption.
Maureen Jann is the chief product and marketing officer of Remodista, a social think tank examining global retail disruption.
Kelly Stickel is the founder and CEO of Remodista, a social think tank examining global retail disruption. A collaborative thinker, she is focused on understanding the layers of disruption in retail and translating insights into actionable items for retail brands using community as a business model.
Devoting a decade at Accenture and Acquity Group, Kelly spent a majority of her career focused on connecting people, cultivating women leaders, and building business development strategies in management consulting. Starting in recruiting, Kelly worked her way through vendor relations, business development, and alliance partnerships focused on marketing and commerce business problems in both B2B and B2C verticals.
Kelly is passionate about cultivating leaders and is currently focused on assisting women in key executive roles in business. She was awarded the Women of Influence 2016 from Chicago Business Journals, Kelly has since then launched the Women2Watch in Business Disruption program in January of 2016 and expanded the program to Australia, Europe, and Canada.
Kelly built and launched Women Influence Chicago for the not for profit Illinois Technology Association. She speaks on topics such as Internet of things, trend in technology, disruption in business, as well as, the importance of women in executive roles.
A graduate from University of Missouri with a degree in Political Science. Kelly is an accomplished mosaic artist and teaches art classes in her local Chicago community. To learn more about Kelly Stickel and her brand you can head to: www.remodista.com.
Maureen Jann is the CPO of Remodista, a social think tank examining global retail disruption.
As Remodista’s Chief Product and Marketing Officer, Maureen focuses on developing programs that help companies connect research and community. Her experience as an entrepreneur, content marketer, and passionate people manager paved the way for a natural progression into leadership and education. Maureen currently divides her time between strategy, community building, and speaking — allowing her to innovate and execute while sharing her practical wisdom with the next generation of marketers. She lives outside of Seattle with her husband and daughter.