Personalisation beyond the hype
As AI application gain momentum, we can expect stores of the future to be run by machines and AI that can predict customers’ every need before they know it. By using data and applying simple algorithms, retailers are able to better offer personalisation and deliver custom, bespoke value for customers.
There will be greater demand for personalisation of products – bags, apparel, footwear made specifically for you.
Customers will increasingly expect brands to deliver solutions. For example, retailers are able to automate re-ordering of convenient products such as pet food and contact lenses. As social and mobile messaging become the preferred channel of communication, customers will be more inclined to interact directly with lesser brands that they are loyal, rather than opt in for a deluge of mass marketing emails from multiple brands.
Other factors like Amazon will grow and hurt retailers that don’t have a following or differentiation. But it is so over-hyped, in the US it is still after 20-odd years 50 percent of online (and a large percentage of that is its marketplace) where online is 12 percent of retail – so 6 percent of total retail. The anything store has its place – to defend against Amazon be clear on your brand, your following and leverage your advantages. More marketplaces will appear in the coming 1-3 years. They will compete with the Amazon/eBay and the likes of Catch. Even marketplaces need to know what sets them apart – what’s their brand and focus. Not everyone can be the “anything store”.
Three significant trends which will impact retail over the next twelve months are:
The integration of physical and digital retail
Many Australian and New Zealand retailers have yet to successfully integrate digital and physical. A recent article said only 42 percent of retailers in Australia actually had click & collect. Enabling customers to shop anywhere, anytime and begin their journey in one channel and complete it in another requires integration. The ability to have all the digital information, customer information, and order options in-store for customers will be key.
The uniqueness of the in-store interaction can complement the ease of digital to create a more enhanced experience for the customer. Imagine the experience that combines the best of both – for example, you can create your items at an apparel store to try on at home online. Then, you book and meet with your personal stylist in-store, where together you browse online outfits, then try items chosen. Once purchased, you take some items with you and have the rest delivered to home, either pay for it in-store or via the personal stylist’s mobile POS.
Digital sales will continue to grow at a much faster rate than in-store sales. The real leap in mindset and success is thinking solely about your brand and its representation in digital and the physical world. Retailers need to consider how the brand travels on the customer journey, one that more often than not, starts online even when purchases are in store and how to integrate in-store and digital to reduce the friction of shopping for your customers. Digitally enabled store team members will drive success.
Developing your customer “tribe” leads to success
Understanding your brand and what it means for your customers is going to be more important than ever before. Communicating and living that brand message need to be reflected in both digital and in-store, in order to engage your community and build your customer tribe. Retailers can expect greater demand for more in-store experiences, more openness, a greater focus on loyalty and recognising customers in-store.
There is an opportunity for retailers to develop curated ranges that work for specific customer following. We have seen some degree of success in Vinomofo wines, Stylerunner sportswear, Harrolds menswear and Flora and Fauna eco-friendly products.
Reflecting values will support in building your following – whether it’s being a social angle, an environmental one, or simply an attitude.
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