Rick Amari, Founder, Columbus Consulting
It seems all retail conversations point to one common theme: Retailers need to transform and adapt to the new consumer-driven way of retail or get left behind. We hear and see this at every industry conference we attend and in every conversation we have with retailers — the need to adopt new technologies and innovate for the sake of attracting and retaining customers is high priority.
We are witnessing a transformation where people are willing to spend more on events and experiences rather than goods. For example, they are willing to have smaller apartments and forego typical spending patterns in order to take that long-awaited trip or save up for that premiere music festival they’ve been waiting for all year. This is especially true for the millennial age group, of which a recent Gallup Poll on generational spending found a 33 percent spending increase on leisure activities such as travel, dinning, and excursions.
What this means is all of the sudden the retailer’s traditional way of selling a tangible product is flipped on its head — as having a rock solid allocation and merchandise planning strategy is now just a piece of the puzzle in solving this new retail conundrum.
To do this, there will be an emphasis on the service component in retail to continue moving toward experiential retail and create a viable retail ecosystem that is truly omni-channel worthy. To create an experience driven retail environment, retailers should focus on implementing three key technology components:
Consumers’ mobile phones have become a second appendage by now, offering the ability to access the site or products of their choice with just one simple swipe. For example, according to a recent consumer survey by Episerver, one in four consumers shop via mobile. In terms of experience-driven retail, retailers face two obstacles here: offering mobile-enabled capabilities and utilizing mobile to draw consumers into the larger experience while in-store.
Look to partner with a mCommerce solution provider to create either a mobile-enabled website or an app that is easy for consumers to use and can provide rewarding benefits to customers both online and in-store.
A great example of utilizing mobile within the store is Sephora’s To Go mobile app, where consumers not only interact with custom makeup content on the app but can also use while in-store to find the products they need, as well as track the results from their in-store beauty consultation.
Consumers today expect omni-channel offerings, period. They no longer view each retail touch point as a separate channel and expect to jump from one channel to the next and still obtain a personalized experience. To create an experienced driven retail environment, look to have all of your channels synergize with each other to enable the experience you create to flow seamlessly from online to in-store.
Data Analytics To Identify Target Customers
A key to creating experiences consumers love is to know who your target customers are. Look to implement an advanced data analytics solution where you can track what your customers are buying, what products they are in search of, and look to build experiences around these. A great example of this is Nordstrom’s Extraordinary Experiences program, which looks to give customers access to their favorite designers, give them a behind the scenes look, and really experience the brand.
In all new technological implementations one thing is crucial: having a clear business plan and process for all implementations. As the retail industry continues to evolve, we will continue to see the birth of new technologies and retailers will be faced with a choice of whether to adopt that particular technology or hold off.
Technologies such as augmented reality and virtual reality will continue to take a strong hold on retail and promise to take consumer’s retail experience to the next level. While this technological evolution is great, retailers must remain vigilant of their end goal: selling their product to the consumer.
Remember that technology for technology’s sake is not always the answer and, much like building a home, in order for the home or in this case store to be structurally sound the right foundation must be in place. The same goes for retail: In order to succeed in any technological implementation, the right components, team, and processes must be in place to make everything flow seamlessly and deliver the experience the consumer is in search of.
It’s no mystery we have entered the age of consumer-driven retail and, as such, retailers need to find the healthy balance between tapping into consumer’s focus on experiences and continue creating a profitable business.