Future of retail will be fueled by intelligence, technology and experience
The Retail EXPO, formerly known as RBTE, brought to London all the best and most knowledgeable retailers, trend experts and retail technologists of Europe for a very intensive two-day event. So where is the future of retail at? Here are some core takeaways from the show:
Information is the currency and the content in the future of retail
Consumers have more power than ever – because they can access more information than ever before. Products, too, are becoming hubs of information. On the one hand, they can store data (think of how wearable devices, or IOT-connected kitchen appliances, can communicate how they are being used). On the other hand, a product’s value increasingly has to do with the information it delivers to retailers. When you know what is being sold where, when, and to whom, you can easily optimize your stock, minimize costs, and personalize your offering.
Social responsibility matters
In the UK, 80% of the public thinks companies have a responsibility to do social good, Alison Hutchinson, CEO at Pennies, reported. Pennies is a solution that digitizes the charity box, simplifying donations across the channels. The solution has been extremely successful: not a single retailer using Pennies has ever abandoned the system, Hutchinson proudly reported. To date over 400 charities, including many small and local realities, have benefitted from it. According to Nick Lowe, Operations Director at forecourt operator Rontec, the best part of Pennies is that it requires no hard selling from the staff: customers decide to click the “yes” or “no” button on the POS – no pressure. Running a socially responsible company, Lowe added, is not just good for public relations: it can also really help boost morale and pride among staff members – a great benefit in an industry that often struggles at keeping employees.
Finding the right technology is key in the future of retail
Consumers move quicker than ever before. How can you implement the right tech, when it is already out of date by the time it hits the stores? Retailers discussing the topic agreed on what is needed:
- Suppliers who can give competent advice, have a long-term vision and can deliver quick deployments.
- Highly scalable technology, to support rapid expansion.
- A partner who understand the retailer’s niche, its roadblocks, and current and future requirements. Retailers are too busy with day-to-day work to figure out what innovation they actually need, what is feasible, and how to get there. On top of that, many businesses lack the internal knowledge. “You don’t even know what it is that you don’t know”, Andrew Jackson, Head of Retail Technology Europe at BP, put it. Businesses require partners who analyze their flow, find the gaps, and show a solution.
The POS will still be there – but in a slightly different role
With all the focus on experience over the transaction, how will the Point of Sale have to change to support a new way of doing retail? The POS system of tomorrow will have to:
- Enable and support two-way conversations between staff and customers who need personalized attention.
- Help consumers who like to DIY make the right choice, with little to no interaction from staff required.
- Help share information across the whole chain, and deliver it where needed.
- Support different types of payments – and be ready to support even more, as the environment is moving fast (for example, payment by bank account is expected to become commonplace).
- Be open, so companies can easily adapt it to quickly changing demands and requirements. This was a very big topic during the show. British supermarket chain The Co-op described how they have been moving data to the cloud, Azure in specific, to reach this goal. The cloud will enable the retail chain to tie together in-store and online data, and ultimately speed up innovation. “Thanks to the cloud, even the tiniest decisions will become data-driven,” said Cliff Austen, Senior Technical Manager for Retail IT at The Co-op.
Customer experience is still the grail of modern retail
So how do you get there? Here are some pieces of advice from the conference:
- Give exclusivity. Why would a customer visit the M&Ms World stores, when they can get the very same candy at any supermarket, for a lower price? Because only at the M&Ms World you can get the (very Instagram-worthy) experience of seeing hundreds of thousands of colored candy pieces all over the walls. And only there can you get a bag of M&Ms with your face printed on each candy piece. These are highly personalized items, and special moments, that the brand’s resellers just can’t reproduce.
- Use the data. Dutch retailer HEMA was very surprised when data showed that their restaurant customers were their most loyal ones. This discovery led to a store redesign, changes in the assortment, and even the creation of an internal cooking school for interested staff members.
- Create chances for interaction. At Le Gavroche, the London restaurant of two-star Michelin chef Michel Roux Jr., the menu is in French. This is not just to hold up to tradition, the chef explained. With the menu in a foreign language, guests end up talking to each other, and to the front-of-house staff, as they try to figure out what the dishes are about. This creates a shared experience, and special memories tied to every single meal.
- Respect your customers. Do not create an experience with the sole goal of creating Instagram moments. This is not what engagement is all about. “Consumers are smart, and their time matters,” said Amy Brown, Head of Creative Strategy at Google.
- Make it fun. In the Google Curiosity Room, a temporary store to promote the Pixel phone, all experiences had to fulfill two requirements: they would need to be tightly related to the product, and they would need to be enjoyable. If people have fun and are impressed by your product, you don’t need to do any more promotion – they will want to share the experience.
Take it to the next level
In the words of Sezin Tumer, Principal Retail Innovation Manager at Vodafone, “retail isn’t dying – but boring retail is.” A common thread during the conference is that it’s not about your products anymore. People can get stuff anywhere. You need to make your brand relevant to consumers. The selling part will come afterward.
Some ways you can do this:
- Find your point of difference. “Being cheap and convenient is not a selling point anymore,” said Andrew Jones, Format Director at HEMA. Focus on what only you can provide –whether it is your history and provenance, your sustainability efforts, or the way you connect to and support local culture.
- Adapt by changing your “how”, not your “why”. Stay true to your identity and your core audience, but do not be afraid to evolve. Michel Roux Jr. explained how at Le Gavroche, a restaurant his father opened in 1965, he adapted the service to modern expectations while maintaining the same standards. “Today’s guests want to feel welcome, and see a smile on the server’s face – they don’t care to see the staff stand to attention,” the restaurateur explained.
- Don’t try to be everything for everyone. That’s Amazon – and you won’t compete with them by playing their same game. Instead, go niche, and use the data you have to deliver the most curated product selection and personalized service to a specialized group of customers.
- Focus on nearby customers. “Near me” searches grew 900% last year alone – and 76% of local mobile “near me” searches resulted in a same-day visit to the store, said Miya Knights, author of a best-selling book on Amazon. Location can be a proxy for relevance – use it.
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Resource Credit | LS Retail