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The spirit of digital disruption in the retail industry is perhaps best illustrated by the spate of innovation labs and startup mentorship programs that have launched in recent years by retailers and consumer goods brands like Target, Best Buy, Walmart, Sephora, Kohl’s, The Hershey Company, and even mall developer Westfield.

Programs like Target’s Techstars and Best Buy’s Ignite align retailers with nascent startups while tapping into their collective brain trust for new ideas.

Meanwhile, innovation labs like @WalmartLabs and The Hershey Lab are reimagining the retail experience—brewing mobile and online innovations, omnichannel shopping solutions including virtual ones, grooming digitally-savvy retail talent, among other things.

Retailers and brands are also taking advantage of similar offerings from the technology industry, like our Microsoft Innovation Centers, Microsoft Ventures, and the NRF Startup Showcase where a group of retail technology startups present to our customers while in New York for the event.

Others are heavily investing in innovation through acquisitions, like Walmart’s purchases of mobile shopping app Stylr and e-commerce start-up Jet.com.

Both consumer goods and retail credit these innovation initiatives for launching new technology solutions and concept stores.

The Kohl’s mobile app, for example, was developed in the department store’s Silicon Valley tech lab, and is now a centerpiece of its personalization strategy. Hershey’s lab set about envisioning a reinvented shopping experience, and came up with a fictitious grocery chain and a series of concept stores named Medley.

“What we see in the future is there isn’t really a one-size-fits-all category,” says Brian Kavanagh, Senior Director, Retail Evolution at The Hershey Company. “So Medley is called Medley because we realized that there had to be a portfolio reaching different kinds of shoppers.”

For many, the outcomes have been tangible. Walmart’s strides to expand and improve its ecommerce platform have brought big gains, reporting a 63 percent growth in online sales last quarter.

These examples showcase a consistent theme among retailers and brands: the ability to meet shoppers on their own terms, delivering just the right experience on any given day.

Much of their technology efforts point to transforming and tweaking where most of the retail magic still happens: In store, where 91% of retail sales are still generated.

Stores are rolling out location-aware mobile platforms that double as interactive, personal shopping assistants, catering to consumers’ idiosyncratic wants and needs in contextually relevant ways.

For traditional brick-and-mortar retailers, this includes blending their physical and digital assets in new ways to make the shopping experience more seamless, convenient and relevant. Walmart’s mobile app offers in-store shoppers easier and faster ways to check in and out. And with its new shipping program, customers can now place orders online but pick up in-store, and receive discounts on certain items as a result.

Online retailers, like ASOS and FreshDirect, are also focused on delivering a seamless experience, and emphasizing mobile-first strategies. FreshDirect, for example, is rolling out a more scalable long-term strategy to deliver the same high quality in its mobile apps as in its products and service, looking and behaving the way customers expect.

“Our customers are shopping on both web and mobile platforms, and they need to be able to seamlessly go back and forth,” says Jon Malat, Vice President of Consumer Marketing Technology and App Development for Fresh Direct. “Our job is to make sure that that shopping experience is the same regardless of the platform.”

There’s good reason why all these brands and others, from J.C. Penney and Macy’s to Target, which calls mobile the new “front door to the store,” are making mobile platforms a critical component of their growth strategies.

In the U.S., 74% of Internet usage now comes from smartphones, and the path to purchase, including those made in store, increasingly begins on one. comScore’s Local Search Study, for example, found nearly 80 percent of local searches on mobile devices turned into purchases, with nearly 90 percent of those purchases being in a physical store (73 percent) or on the phone (16 percent); and roughly three-fourths (76 percent) of them happening the same day and most within a few hours.

The extent to which mobile phones have become consumers’ command centers cannot be underestimated. Consumers increasingly use their smartphones as a minute-to-minute, never-leave-home-without-it lifestyle tool to get them through the day.

They’ve become everything from a portable concierge, travel agent and phone book to library, tour guide and shopping mall, catering to shoppers on demand at their precise moment of need.

The Harvard Business Review calls these “micro moments,” whereby consumers turn to their mobile devices with four imperatives: “I want to know: specific information on an infinite variety of topics and products; I want to go: where to head, and when for an activity or to find a particular product; I want to buy: purchases, opinions, facts, deals and comparative information on products and services, even when standing in a store; and I want to do: how-to-information on any variety of tasks and activities, from a home repair to a new yoga pose.” And retailers have taken note.

To read more articles in my digital disruption series, you can find them here on the Microsoft Retail Enterprise Blog and below.

LinkedIn: Tracy Issel


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