In Retail, It’s “The Year Of The Customer”
From mobile engagement to inventory management, columnist Allan Haims looks at the key trends that dominated the discussions at two major retail conferences.
Two of retail’s largest and most influential conferences were held in January 2016, though they happened to have taken place about 1,000 miles apart.
The National Retail Federation’s (NRF) Annual Convention in New York City, commonly known as “Retail’s BIG Show,” is where retail executives coalesce to discuss innovative ideas, share insights and learn about new technologies that will transform and innovate retail business.
Meanwhile, in Orlando, Florida, the ICR Conference, an annual institutional investor event, welcomed CEOs and CFOs of leading public and private companies in the retail and restaurant sectors to discuss recent holiday season results and share their outlook for the coming year.
I had the opportunity to attend and present at both functions, so here are what I consider to be six of the key takeaways and trends from both meetings.
In 2016, The Customer Reigns Supreme
Now, more than ever before, the customer is continuously connected through an exponentially growing list of applications and shopping experiences — ranging from WiFi-driven mobile retail apps to smart fitting rooms.
Shoppers now expect the products they want, exactly when they want them, with no hassle. With new technologies, they can have it their way.
Adopt To Adapt
Most retailers are adopting omni-channel strategies to adapt to their ever-changing environments and customer preferences. An omni-channel strategy delivers customers with a seamless shopping experience across all channels, whether digital, mobile or brick-and-mortar.
As traffic has slowed in many of the brick-and-mortar venues, retailer strategies have changed to focus on increasing the number of transactions, average transaction value and loyalty numbers.
Turn Data Into Actionable Drivers
The retail environment is getting bombarded with technologies and companies offering a multitude of ways to collect data through video, WiFi, Bluetooth, beacons, updated foot traffic counters, and even smart light bulbs. There is a real need to aggregate these data into actionable, measurable drivers that improve shoppers’ experience and increase revenue and profitability.
For instance, what does extended dwell time in a particular wing of a mall mean? Or how will I change promotional offers if I know the age of shoppers in my stores in real time? What is the most effective communication platform to leverage newfound data?
Beyond the current technologies and strategies discussed at both conferences, many conversations were centered on where retailers should focus their energy in 2016.
Improving Mobile Engagement
There has been increased interest in using social platforms for mobile brand engagement, but there is less of a tie to transactions. While social platforms certainly have their place in an omni-channel world, mobile retail technologies can serve as conduits between a consumer and a retailer, as they can gather data and other demographic behavior and serve as a push or pull vehicle for localized, relevant promotions.
For instance, at the NRF show, an example was given of a major CPG (consumer packaged goods) brand that recently trialed a new mobile engagement campaign that allowed customers visiting a participating retailer to provide their mobile number via a standalone tablet in order to instantly receive a free product, and at the same time, opt in for future messaging.
Once someone signs up, the location technology can alert the business the next time the customer enters or is near the store and can send relevant, timely promotional offers on a variety of brand-owned products.
Obviously, innovation is key for great retail companies. But the need to balance the many delivery platforms — from native apps to guest WiFi networks — as well the many communication platforms (e.g., Instagram, text messaging, Facebook) to optimize the shopper experience requires leadership and strategic thought.
Maximizing Inventory Management
Another trend that has emerged is shipping directly to customers who shop online from brick-and-mortar stores. Retailers have begun using individual mall stores as mini-warehouses, where the retailer maintains a single inventory so they know exactly where their merchandise is located and can ship to the customer from the nearest location.
Many stores have spent millions of dollars on integrated infrastructure to manage this type of omni-channel technology. Inventory management is becoming much more efficient, and shoppers are getting their products faster.
In many ways, shopping online is becoming similar to shopping in the store. The customer can buy online, pick up and return to the store — ultimately improving customer engagement.
Marketing And Loyalty
Customer loyalty is always a good thing for retailers. Building customer loyalty is imperative; and though it can be tough to earn, it can be easy to lose.
When a business fails the customer, whether it is through weak pricing or delayed shipping, it is increasingly easy for the customer to go elsewhere. In the “Year of the Customer,” retailers that truly embrace omni-channel strategies across the entire organizational ecosystem will win over the increasingly selective, bargain-focused shopper who doesn’t care how they get their items or where they come from — they just want their expectations to be met.
Winning retailers don’t get paid for having technology; they get paid for improving their sales and increasing their margins.
However, anything businesses can do to increase loyalty, whether it is through mobile technology, social media or digital marketing, will likely result in more transactions and higher average dollar sales.