Retail transformation was on full display at ShopTalk 2019, and the Microsoft Industry Experiences team was there to participate in this next-gen commerce occasion. For those who are unfamiliar, ShopTalk is in its fifth year. It is a digital, omnichannel and customer experience (CX) event for independent software providers (ISVs), startups and retailers. It’s the pre-eminent event platform in the digital and omnichannel retail space. What happens here is sure to have an effect in the retail world.
Here are five noteworthy trends or industry issues that had an impact on the discourse and deliberations at the event:
- New experiential retail strategies that promote a frictionless, digital-physical customer experience
- Achieving 360 customer insights are a high watermark that retailers need to better understand their customers, learn from their behavior and deliver personalized interactions
- The much-needed changes being made to legacy customer loyalty programs that is leading to omnichannel customer stickiness and intimacy
- Business transformation is a continuous journey for some retailers and not a short-term endgame
- The next stage in the data and analytics journey of retailers is artificial intelligence (AI) but retailers need to help customers and employees understand the value of AI
This is the first of three blogs where we delve a little deeper into the five topics above that were dominant in discussions. This blog focuses on the first two trends; new experiential retail strategies and knowing your customer by achieving 360 customer insights.
Updating the retailing experience
Consumers are voting with their feet, and retailers must find new ways to keep their loyalty. Look no further than the recent shuttering of Toys “R” Us and Sears. Proof positive, the online and offline experiences of some retailers are still disconnected.
For customers, a major frustration with the overall shopping experience is not store or channel dissonance, but the lack of a satisfactory end to the shopping journey. Examples of problematic experiences include:
- Pricing—discount offers, coupons, and comparisons need to be logical and easy. Pricing inaccuracies and different online/offline prices are still prevalent
- Ordering—size issues and other options can mean confusion
- Checkout—slow checkout breaks down the front-end experience in the stores and a checkout security is a sensitive issue for those wary of hackers
- Shipping and delivery—will the item arrive in two hours or two weeks?
Qualitative discussions with retailers show that 5-in-10 retailers believe they are behind their competition in executing an omnichannel strategy.
To increase innovation in stores and online, retailers must introduce more disruptive retail engagement models—models that focus on the emotions of a complete shopping trip or journey.
For instance, in the case of a large footwear retailer they have focused on an omnichannel strategy for the last few years and as a result they have become one of the leading omnichannel retailers in the country. However, one of the challenges they face is that their associates are using legacy technology in the store, so they need to update their store tools to suit present times.
In the case of another large online retailer, customer experience strategy is not divided up into online and offline, but they look at their customers as having one unified shopping experience.
Know your customer
Every retailer has an overall company strategy that encompasses goals in growth, margin, and market moves. Retailers also have a customer strategy focused on satisfaction and overall shopping experience. But many apparel/fashion, hardlines and grocery companies fail to make the connection between the two. If, at the most strategic level, you are not aligned with the customer promise and related key performance indicators (KPIs), then consistent quarterly results are hard to attain. For example, in the case of a large hardlines retailer they want to develop a strong analytical understanding of shoppers, competitive landscape, and ensure that their company strategy is married to their customer strategy.
A related trend is the activity happening right now to redesign and retool customer loyalty and brand ambassador programs. Such re-engineering is due to three factors: (1) the legacy nature of such programs, (2) the need for value upgradation based on customer demand, and (3) the low levels of process automation at the point-of-service. Whether it is Lively, Barneys, or Macy’s, ambassador/loyalty/associate influencer-led programs are being upgraded to surprise and awe customers. The goal is to realize greater in-store conversions, brand advocacy and omnichannel success.
Case in point: A large home improvement and specialty retailer has hired style advisers that are armed with omnichannel tools and an entrepreneurial mindset. These advisers are encouraged to create their own relationships with customers. Such advisers are hired based on their social media affinity as well as through social media they can influence customers.
While this blog focuses on the current top customer-facing strategies in retail, the next two blogs will highlight other transformational areas impacting the retail industry including; strategies for modernizing loyalty programs and how AI use cases are getting better accepted in retail.
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