A panel of retail experts share their insights on the future of retail technology, the challenges it poses, and how it can be utilized to improve the customer experience and boost profits.
Senior Vice President of Client Success, Brierley
CEO, Appriss Retail
Dr. Rusty Bishop
Chief Marketing Officer, Bigtincan
Investor, ABC’s “Shark Tank”
What does “smart retail” mean to you in 2022?
Elisabeth Keller: “Smart retail” is continued convergence of digital and physical retail for a seamless shopping experience. Buy online, pick up in-store is the tip of the iceberg in this convergence. Blending virtual try-on with in-store pick-up is one foundational element to this convergence. Warby Parker is doing a great job with their virtual try-on, try-on at home, and in-store experience.
What long-term changes do you foresee the ongoing pandemic having on the retail industry?
Steve Prebble: The rapid amplification of delivery; curbside service; buy online, pick up in-store; buy online, return in-store; touchless payment; self-checkout; and other technologies were fantastic benefits to shoppers. They embraced these conveniences and are unlikely to give them up. Retailers will need to find ways to be more profitable in offering these services, whether it is by reducing loss or deriving more value from every shopping trip. These changes depend on retailers being able to recognize their own consumers during each step of the shopper’s journey, no matter which channels they use in a purchase or return transaction. Retailers will use their information to curate a custom experience for each shopper.
Another big issue is the skyrocketing return rate. Online orders are returned three to five times more than an in-store purchases. Retailers must understand this is not just a logistics issue, it affects the consumer experience, inventory availability, store operations, labor, and other costs — and, ultimately, the retailer’s profitability. It’s important to approach cost controls without harming the consumer relationship. Returns are an expected part of the retail experience — returning should be optimized just like the path to purchase.
What is the biggest challenge facing modern retailers today and what advice would you provide to these businesses?
Rusty Bishop: Digital and social interactions have evolved to where customers expect personalized experiences that “wow” them and help them make great purchasing decisions. When we enter a retail environment in-person, we come in the door carrying those expectations. I believe the largest challenges with regards to expectations will come from this dichotomy. Three examples are augmented reality and virtual reality, hiring and training frontline people that can deliver personalized experiences similar to what consumers get online, and instant gratification. Large online retailers deliver in 24 hours, but most retail stores can’t keep that kind of inventory on-hand locally.
EK: Developing an emotional connection between the brand and its customers. With shifts to ecommerce over the past two years, retailers lost the opportunity for store associates to connect with their customers in a meaningful way. Chatbots just don’t do it. It is critical for brands to create a relationship beyond the transaction. Loyalty programs are a key element to developing that relationship. I’m not talking about discount programs where members earn points in exchange for an email. I’m talking about programs that create opportunities for a deeper experience with the brand — a sense of community built by offering truly special member-only experiences. One of our clients is developing a community of brand advocates by rewarding social engagement; another is leveraging loyalty data to inform cross-category loyalty promotions that result in increased baskets.
SP: Providing consumer, merchandise, and supply chain data to every channel in near real-time is the biggest challenge to a seamless consumer experience and to managing profitability in an omnichannel environment. From inventory availability to instant loyalty awards, the CX depends on accurate and timely data. So does a smooth and risk-free return. When retailers rapidly added omnichannel options in 2020-2021, data silos grew. A chief consumer officer charged with integrating data across channels could simultaneously improve company performance and consumer satisfaction.
What are the top challenges facing small businesses today?
Lori Greiner: Due to the pandemic, there are different challenges facing small businesses today, depending on what that business is. Some businesses have had to close their doors, like restaurants and small shops, and then struggle when they reopen to get the word out, get foot traffic, and get customers because a lot of people are not going out like they once did.
People are shopping online, more people are cooking at home, so small businesses need to be creative and use incentives. If open again or reopening as many are, I think one of the most important things is to do everything to get the word out that you are open, doing things safely and with the utmost care. Even sharing what some of those things are on menus, on your website, in posters in windows, make sure people know you’re back in business and why they should feel comfortable going there. Make sure it is a good experience once people start coming back in.
Go over and above with your caring and customer service.If you can’t be open and had to close your doors, you need to pivot. For example, if you’re a restaurant and you have one thing people adored, that was your most popular thing, that people were always coming in for (i.e., everyone loves your brioche cinnamon rolls) think about how you can sell that thing online. I know several people who took their best recipe, highlighted it, and made it an online product. Put up signs in the windows of your restaurant or store telling people to go online: “Your favorite —my brioche rolls —available online now!” Use your storefront to put up signs directing people to your website.
People will still drive by, and I’m sure they miss going to your restaurant, so they will catch that sign.
What are the main types of resources that retail companies are in dire need of right now?
EK: Using data in meaningful and relevant ways, both for the customer and the business, online and in-store. Retailers are amassing enormous amounts of data, and one of their biggest challenges is discerning what is useful and what is not. Once that is discerned, robust business intelligence tools and recommendation engines can help harness the power of the data and serve up relevant customer experiences that deepen customers’ connection with the brand. This is well beyond understanding when to send a birthday offer. Loyalty programs serve as a powerful tool for the collection of robust zero- and first-party data which allow brands to know their customers and to create direct and personally relevant customer connections and interactions across touchpoints, at the right time.
What will the retail technology industry look like in the next five years?
RB: I just spent a few days at the National Retail Foundation event in New York. For me, the most exciting thing I saw was the potential of augmented reality and virtual reality to shift from a novelty to a revenue generator. I’m not just talking about virtual showrooms and QR codes, but personalized experiences where employees learn on the fly, custom-tailored environments are the norm, and retailers collect and make use of data in real-time. That’s the buying experience of the future that should be shaping retail technology over the next five years.
SP: The technology companies will provide more AI-driven solutions that pull data from every channel. Data volumes, sources, and accuracy will continue to grow, providing more contextual, real-time data that will enable even more relevant consumer engagement and quicker, more accurate, and more profitable retailer decision-making. Mid-size and large retailers will leverage the benefits of true omnichannel integration. Their consumers will choose when and how to interact with each channel and enjoy a true, seamless experience. Returns will remain an important part of the consumer journey, but retailers will feel less threatened by their cost and use them as a relationship-development tool by implementing technology to improve the entire shopping experience.