By Tony Giudici
In Part 1 and 2 we discussed and introduced the Blended Retail concept and how Retail is transforming. In Part 3 we looked at the in-store experience, and how retailers have had to adapt and transform. In Part 4 we looked at what Generation Z means to the future of Retail. In Part 5 let’s look at what's next in 2019 and beyond.
Around the world, retail is facing enormous change and major structural challenges as consumers migrate to online channels and new technology in preference to stores or malls. The effect of this is already being felt with increasing store closures and pressure on traditional shopping malls. This is leading to a growing number of retail commentators stating that the appeal of the physical retail space is declining irretrievably.
However, against this negative picture we are also seeing a very positive grass-roots level movement in cities around the world where entrepreneurial developers and businesses have taken over redundant spaces of different kinds to create exciting new consumer destinations. New retail formats can shape these new experiences as well as food and drink offerings, cinemas, night clubs and other entertainment. The effect has been to draw in consumers, often young consumers, which is then helping breathe new life back into urban areas. Progressive cities are tapping into this trend and creating mixed use space in older abandoned malls and strip centers.
AI has developed from a “neat idea” to a market-ready solution, serving a variety of high-value use cases.
“Artificial Intelligence will finally take center-stage. In their fierce competition, Amazon, Apple, Google, and Microsoft have established intelligent, responsive voice assistants as the new standard for consumer interactions. The widespread use of artificial intelligence through Siri, Cortana, and Alexa have started to normalize the interaction of speaking to a computer instead of a human to get the service you want.
Alexa, Siri, and Cortana not only act as personal assistants, but also personal shoppers in the digital world. AI-driven chatbots are optimizing both customer service and marketing, creating endless opportunities for brands to start a two-way conversation with their customers. Every customer-facing technology is now syncing back to a retailer’s big data platform, enabling better insights for brands and a personalized level of service for everyone. Lately, the best performing retailers all have one thing in common: they’re already leveraging AI to enhance the digital experience, drive loyalty, and innovate. Artificial intelligence is no longer a technology of the future - it’s changing retail at its core, today. This year, AI played a supporting role in an ensemble cast, sharing the stage with augmented reality, wearables, even-higher-resolution TV’s, and biometrics. We predict that by the time CES 2019 kicks off, AI will be front-and-center, integrated either in the front or backend of every consumer-facing device and setting up the framework for the first version of the Internet of Things.” (USBlog, 2018)
With all of that said, it’s strange to think how technologically antiquated most physical stores currently are, considering brick-and-mortar retail still accounts for about 90% of all retail spending in the US. Two-dimensional signage, static product displays, and even paper coupons dangling from the aisles all seem like historical artifacts in a digital age. Simply put, brick-and-mortar isn’t dying, and retailers are finding that they’re at the heart of the ideal customer’s omnichannel experience. Retailers will continue to get the enhanced, interactive shopping experience they need to differentiate, tech companies will be able to demonstrate their devices’ value to consumers without asking them to make an upfront investment, and consumers will get to try out the latest gadgets in a real-life setting before purchasing them in-home. It’s a win-win for all parties involved, which is why other innovative technologies may use retail stores as a gateway to consumer households.
Adapting to changing customer needs is the number one priority for retailers in 2018.
Omnichannel retail has taught consumers to shop differently and has changed the expectations for all channels. Retailers that harness data, digital, and mobility to truly know their customers and deliver a seamless, tailored experience will thrive. 77% of retailers think adapting to a new retail format will provide a competitive advantage and 53% state they are very prepared to address it.
Digital capabilities and employee engagement are the second and third top priorities, respectively. As retailers migrate towards digital and mobile omnichannel engagement, they must create a new layer of service design to differentiate the brand experience and offer high personalization. At the same time, they must look for opportunities to involve their employees in a meaningful way that delivers value to the retailer, the employee and the end customer.
Next we will take a look at how retailers are addressing employee engagement at all levels in the Omnichannel Experience.
Tony Giudici is a Director of Market Development for Excelerate America, a second-stage business accelerator that helps small businesses go next-level in the digital economy. He's love to hear your thoughts on how Artificial Intelligence is taking center-stage in the retail environment. Just shoot him an email at firstname.lastname@example.org.
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