Consumer
trends are constantly evolving, and new technologies mean that retailers have
an opportunity to create efficiencies, save more money and build products that
are more customer-centric. With new technologies come new opportunities for
innovation that help both retailers and consumers throughout the retail
shopping experience. In this article we’ll be covering five of the top
innovative solutions retailers are adopting to grow their business.
1. Personalisation
Retailers
are now, more than ever, able to collect a lot of data on their customers.
Thanks to smartphones, integrated payment systems and shopping apps, retailers
can gather a lot of information on their customers’ preferences. The hard part
is understanding how to make the most of said data.
Data
analysis means retailers can understand what their consumers’ behaviours and
needs are. This helps segment the customer journey more precisely, which in
turn allows for more personalisation in the shopping experience. For example,
using location targeting helps the retailer understand where the consumer is
when making a purchase. By analysing that data, retailers can segment that
customer as “a consumer who buys from their home”, for example, which might
offer opportunities for personalisation (perhaps they are more willing to go to
their desktop or read a longer article).
In
general, customers themselves don’t think of personalisation and are more
interested in the benefits this offers. Does personalisation mean a
shopping experience that is easy, fast and helps them make buying decisions? If
so, then the consumer will be for it. Other examples of personalisation could
be encouraging customers to build the product themselves (think accessories),
or offering personalised discounts and cashback to customers who are regular
buyers.
2. Buy Online, Pick up in Store
Buy
Online, Pick up in Store (BOPIS) is another technological solution that has
gained popularity over the years mostly due to an increasing culture of
instant gratification. BOPIS is a technology that links platforms and
devices to inventory and supply chain, allowing physical stores to easily
coordinate with online orders.
As
customer needs to keep evolving, many demand several delivery alternatives
(omnichannel) and want the option to be able to pick up their goods in store.
There are several benefits to implementing BOPIS as a retailer. The first is
that picking up in store saves money for both the retailer and the customer
since they both avoid shipping fees. The second advantage is that consumers can
use this tool to quickly see whether a retailer has the inventory needed, and
therefore waste less time in the long run. Finally, BOPIS offers an opportunity
to increase customer satisfaction by providing stock availability and
fulfilling it correctly. This simply means that retailers can improve their
customer experience tenfold by offering all the information on their website
and having the inventory ready when the customer comes to the shop. Having said
that, one negative experience can lead to the loss of a customer.
3. Augmented Reality
There’s
been a lot of hype about Augmented Reality (AR), however, we still feel AR has
a lot of potentials to take retail to the next level. Some use cases of AR
being used in retail are tools that allow consumers to scan an entire shelf
in-store and easily compare product details. Another use case is virtually
trying on products. Companies such as Sephora are allowing mobile app users to
try makeup on in real-time through filters. Lacoste is also using this feature
by encouraging customers to virtually try on shoes. This not only works for
clothes, but also for home products. Magnolia
Market is using AR to help customers visualise products
in their homes before buying.
This
may sound like a lot of investment in technology with uncertain ROI, however,
retailers can use AR not only to make shopping more efficient but also to offer
a fun and memorable shopping experience. This translates into increased
brand experience and thought leadership in the industry.
4. Customer Chatbots
Chatbots
are another technological advancement that we’re seeing implemented in most
consumer-facing industries. This is because they offer a huge opportunity for
retailers to personalise customer service at a relatively lower cost. When
implemented correctly, they can also be used to guide the consumer from
pre-sales to after-sales, helping retailers save money and improve the overall
shopping experience.
Chatbots
are also an excellent tool to gather data about customers queries, preferences
and demands, which in turn helps offer a more personalised service. Chatbots
can offer a truly frictionless buying experience, which in return could increase
loyalty to a certain brand since consumers will feel that the brand truly
“understands” them. We’re already seeing this with companies such as H&M
who offer their own personalized stylist on Kik.
5. Data Sharing with Open Banking
Finally,
in the UK and Europe, laws such as PSD2/Open Banking are allowing the industry
to take leaps of innovation by encouraging secure data sharing. At first, this
may not be obvious to the retail industry, however, when correctly implemented,
PSD2 can have a huge positive impact on the shopping experience and company
operations.
With
Open Banking, authored financial institutions (AISPs) are able to obtain
(with consent) direct access to the consumers’ bank transactional data,
partner up with retailers and share information in line with regulations. This
allows retailers to completely reinvent the way consumers pay for their
products as well as target their competitors’ customers. This could be, for
example, by personalising payment processes depending on the customers’
specific needs (like offering to pay in instalments for consumers who cannot
afford an upfront payment). Retailers can also use Open Banking to initiate
payments directly with a customer’s bank. By removing the middlemen in the
purchase transaction, merchants will pay fewer transaction fees and will have
the ability to clear funds more quickly.
Gaining
access to customers’ transactional details offers retailers an opportunity to offer
discounts and cashback. Like never before, retailers will have data on
consumers’ spending habits, which gives companies an opportunity to offer
highly personalised deals. This also means retailers are able to gain
insight on their competitors’ customers. For example, if a supermarket
chain analyses their customers’ transactional data they may notice that
customers enjoy getting coffee at a nearby cafe after doing the weekly shopping
haul. From this analysis, the supermarket could decide to set up a small coffee
area in the supermarket and offer a discount for recent shoppers. This helps
the supermarket increase market share and boost revenue.
Companies
like Recash are helping
merchants understand their customers’ buying habits, target their
competitors’ customers, design personal offers and make the shopping
experience as seamless as possible. By upgrading the consumer’s current bank
card to a cashback card, retailers can reward existing customers as well as
attract new ones - and a commission-based business model means it’s
risk-free!
This
list is by no means exhaustive and there are many other innovative technologies
that are making their way into retail at the moment. The main thing to consider
is that these technologies are all moving towards a highly personalised,
frictionless shopping experience. Whether this is through invisible payments,
one-on-one services or loyalty programmes, the main thing is for retailers to
allow room to adapt to shifting demands.