Now, the glass is more than half full for the retail industry, and the accelerating expectations of the consumers present opportunities for savvy retailers and brands who are willing to face the winds head on. Global retail sales closed at $25 Trillion in 2018 and are expected to reach $28 Trillion by 2020.
While consumers are super busy in their instant gratification world and may not care about the future of retail, they’re still creating that future. They want greater convenience. They want a personalized value. They want excitement. They want authenticity. They want a social connection. They want more of everything. It’s this relentless consumer quest which is driving the changes that we are seeing in the retail arena.
Moreover, ‘Instant Gratification’ culture is being replaced by ‘Constant Gratification’. Here are a few brands trying to up their game using technology.
- IKEA has a smart mobile app that lets shoppers view digitally rendered products in their own homes. The app also includes a visual search using which users can point their cameras and search for similar products.
- ALIBABA shopping mall’s AR mirrors let the customers virtually test the make-up looks.
- Nike used Augmented Reality (AR) and geolocation to promote one of its shoe drops.
- Amazon who is always high on innovation is leveraging predictive analysis for anticipatory shipping. Based on the purchase history in a region, the product is shipped to a nearby warehouse and when customer orders, it can reach in the shortest time possible.
Retail is undergoing a massive transformation in terms of consumer habits, fast-changing technologies and challenging competitive dynamics. Let us look at the Big 4 Retail Breakthrough Trends fueling the business growth and Customer Experience (CX) to a new level.
TREND 1 — Exploding E-Commerce
E-commerce continues to explode and is anticipated at 265% growth rate globally, getting to $4.9 Trillion in 2021.
Consumers’ yearn for remarkable customer experiences has been resulting in new challenges and innovations on an almost daily basis. And the biggest predicament for commerce is personalization which has put the top brands on perpetual innovation mode. Top retailers like Amazon, Ikea and Sephora are using different technologies especially AI and Augmented reality powered tools to enhance their businesses.
Example — Olay skin advisor uses machine learning to study their customers’ skin tone and provide appropriate recommendations. Then grocery chain king Kroger is coming up with smart shelves using AI. As soon as the customer walks in with the Kroger app, open sensors identify the shopper and highlight the products, like kid-friendly snacks for a parent. It also provides personal pricing and alerts shoppers if an item on their shopping list is on sale. Then we have Macy’s coming up with a personalized assistant to help as soon as you step in the store. Right from providing required directions to recommending personalized products, it takes care of everything a customer needs.
On the other hand, we have the top automakers, trying to develop connected-car systems with varying capabilities ranging from on-demand music streaming to automatic payments at gas stations. Mercedes is planning to turn your car into a comfortable shopping mall on wheels.
TREND 2 — Surge in Consumer Convenience
The Last Mile factors in greatly to customers’ post-purchase experience. Last Mile Delivery for E-commerce Market is on $3.02 Billion which is predicted at $4.8 Billion by 2024. Today’s consumers are looking for alternatives if their delivery is anything short of top-notch supply.
Hence, the e-commerce giants and start-ups alike are trying to build on new logistic technologies and strategies to meet the ‘last mile’ efficiently.
- Other than the Amazon Key and in-car delivery strategies, Amazon has launched a new self-driving delivery device called Scout which can deliver packages safely to a customer’s doorstep. This is already in operation in Washington.
- Walmart has been pushing big into grocery delivery tapping into self-driving vehicles and has launched pilot projects in select areas. Walmart is also going for Blockchain that will make it’s delivery drones exchange information securely and have same-day delivery at a much lower cost.
- Hitch, PiggyBee, and Entrusters are start-ups that are focused on personalized delivery by connecting shippers and travelers. Basically, shippers put out requests and travelers input their information. The app uses GPS to find the quickest route, provides tracking and camera functionality to show proof of delivery.
Retailers understand that they cannot leave the ‘last mile’ to chance and are proactively managing the customer delivery leveraging technology. However, it will be interesting to see which technology will win the last mile delivery race.
TREND 3 — Friendly Fraud
The two most common causes of friendly fraud are when a shopper doesn’t recognize a charge on their bank statement; or, when they regret a purchase and issue a chargeback. We also have some causes of friendly fraud that are outside of the retailer’s control, such as late deliveries. Though retailers can’t control all the cases which are holding up a package, they can minimize the problem by maintaining honest advertising.
The following chargeback stats paint a stark picture of the current situation with regards to chargebacks, friendly fraud, and the never-ending demands of modern, digital-enabled customers:
- Friendly fraud increases at a rate of 41% every two years.
- At the current rate, friendly fraud will cost merchants upwards of $25 Billion a year by 2020.
- 81% of customers freely admit to filing a chargeback out of simple convenience.
- 86% of all chargebacks are probable cases of friendly fraud.
- Merchants ultimately lose out on $118 Billion in sales due to false positives each year.
- Roughly 79% of businesses believe that increased emphasis on a frictionless environment will lead to more tension between the user experience and fraud prevention.
In the age of disgruntled reviewers, it is understandable that retailers want to keep their customers happy and their reputations intact. But this prevailing attitude of consumer entitlement is presenting major operational problems for merchants. Merchants stand to lose billions if they continue to neglect security.
TREND 4 — Transactional Social Media
Social media is everywhere. You can’t avoid it because it’s here to stay. There’s no denying that social media platforms are now a major source of information. But that’s not all. We have 3.2 Billion social media users worldwide which equate to about 42% of the current population. And if we break it down, 90.4% of Millennials, 77.5% of Generation X, and 48.2% of Baby Boomers are active social media users.
Now, buy through Social Media — Messenger
Social Media is not only providing a platform for users to communicate beyond social boundaries, but they also offer countless possibilities to share user-generated content. Following are some interesting use cases on how the brands are leveraging social media and technology.
- Marvel, one of the biggest movie studios worked on jumper.ai to create an automated checkout bot. They retargeted to re-engage past engagers and those who could not convert.
- Nike partnered with Snapchat to promote the new Air Jordan III “Tinker” after the NBA All-Star game had the shoes sold out in minutes.
- PinDuoDuo is the new Chinese app where the more your friends go on a purchase with you, the price keeps getting cheaper. To get as many friend circles as possible they integrated with WeChat and other big Chinese social media networks.
Another trending activity is that the top brands are trying to leverage social media by trying to stick to one channel and mastering it to communicate across all possible networks.
Today’s technology has produced an intricately connected world. However, the fast pace of today’s society has resulted in, ironically, a lot of disconnection. The attention span of the consuming world is getting shorter and shorter. Companies face the challenge of successfully grabbing an audience’s attention and some are doing it well, but there is still a gap. However, with personalization flaring up all the grounds, customers become even smarter and more demanding and AI applications like visual search and NLP digital assistants become more widely understood and applied.
Consumers of today are looking for connected experiences and instant gratification. Comparison shopping and digital morphing solutions will be the ones that will drive customer engagement and interest.
The technology landscape for retail is the next big battleground for companies and the retailer that adopts/adapts faster will be the one to stand tall and win.
This post was written by Brian J Friedman, VP Global Strategic Sales at SoftClouds. Brian has a background in technology, business development, corporate management, and sales. Brian has been responsible for the creation and growth of numerous companies developing successful long-term relationships that have resulted in double-digit sales growth and continuing business expansion.
SoftClouds is a recognized leader in CRM/CX transformation with experience in numerous Service Cloud Implementations with pre-configured best practice business processes for multiple verticals/domains.
If you have any questions or would like to find out more about SoftClouds and our extensive experience, you can reach us at “marketing-at-softclouds-dot-com”.