What should expect in retail for 2018?
At the end of the 2018 Retail Big Show in New York, attended by SQLI Lab teams, the question arises: what are the main trends that will impact the retail industry this year? If technologies have a big role to play in the future stores, the human aspect, reflected by the customer experience, will also have a very important place to hold. The SQLI New York Lab explain these trends for you.
Customizing your products:
Even if the concept of customization is not recent, we can see that retailers are increasingly innovating in order to offer customised experiences to their customers, Whether you want to buy sneakers, glasses or enjoy a unique experience, brands are working hard to offer products that are unlike any others. Not only are customers attracted to brands but they also want a product or a personalized experience. At Nike or Converse in Manhattan, a full floor of the store is dedicated to personalizing your shoes: from the color of the laces to the printing of specific words, anything is possible. What matters is that the customer is the actor of this customization. Previously, he/she was offered different models from which to pick. Now, the customer is the one in charge of the design: at Nike, one designates the color of the logo, the inscriptions on the sneakers or the color of the laces.
The Battle of the platforms:
The Amazon vs. WalMart war will continue in 2018 and will above all show the need for brands and stores to become global platforms. WalMart is increasing its online presence through numerous acquisitions to counter Amazon, which is trying to reinforce its proximity with customers by opening its own bookstores or buying existing store chains such as Whole Foods. People do not go to stores (offline or online) to buy a product, but to benefit from the services coming around this purchase. This platform translates into in-store service offerings, which come before or after the purchase. We can see online that the big players all want to become global platforms: Uber recently launched a credit card, Airbnb is involved in the booking of airline tickets or restaurants. This kind of platform requires a very powerful IT infrastructure. In the physical world, we can see that coworking space leader WeWork recently acquired Meetup to develop its platform dimension.
Regarding stores, the latter will have to insist on their ability to deliver service as quickly as possible and facilitate the act of purchase, which brings us to the next trend.
Stores have been becoming more and more cashless. In the United States and around the world, fewer and fewer in-store transactions are made by cash. In 2016 a Gallup study () showed that only 24% of Americans were shopping only using cash and American point-of-sales have been adapting themselves to this trend. Amazon has been opening cashless stores, Nike has also been experimenting in this area, and Starbucks is currently pushing the use of in-store mobile payment to limit the use of currency/ after they announced that 11% of their orders are now made through a mobile phone. Numerous technologies allow these payments: the main tool being the classic banking card, NFC, mobile apps and bitcoin are starting to take an increasing place. If you are expecting a frictionless experience in store, making payment easier is a crucial point. Cashless stores are therefore necessary. The risk of burglary is lower, and this model especially brings the experience of spending less time buying. But above all, a cashless store can be designed differently as fixed cashiers are not need anymore. Instead, the salesperson can be equipped with a mobile payment terminal and stand by the customer to assist in his/her purchase process.
Data, data, data:
whether in data security or in their use, data will be once again the buzzword of 2018. Physical stores have increasingly been leveraging Big Data, an essential strategy for Amazon's success, and applying it to optimize buying experiences and business management.
Hence physical stores players are more and more using data collection and analysis tools to evaluate shoppers’ behavior. These tools are required in order to optimize stores products’ prices, to provide more personalized marketing and to better predict store demand variations. In 2016, the brand True Religion () tested on Apple Watch app that warns the in-store employees of the arrival of customers; those customers already having installed the brand’s app and having made at least one purchase before. The salesperson, therefore, has a global view of the customer on his watch, with his/her tastes and frequency of purchase. These data enable the salesperson to guide the customer along the lanes. This type of initiative should be more and more prominent in points-of-purchase.
Unfortunately, we realize that this is not often the case. According to this Alteryx study, if many retailers do collect data, most of them do not use them effectively. Still, according to this study, only 16% consider themselves as data collection experts, while 24% and 60%, respectively, describe themselves as "novices" and "in the process of getting there".