What does the future of retail hold? Most of us wish we had a crystal ball to look forward and capitalise on trends and priorities as they emerge. Well, IBM decided to take the job off our hands at NRF’s Big Show 2016, outlining their vision of retail in 2025.
Steve Laughlin, IBM’s VP Global Industry Leader, Retail and Consumer Products, hosted the session, and began by highlighting the major challenge for retailers and brands over the next 10 years: customer experience. According to the IBM Customer Experience Index, the average shopper satisfaction score is currently only 41%, so improvements clearly need to be made.
But what must the industry do to better meet these expectations more closely? Laughlin identified two ‘megatrends’ that need to be addressed in both mature and emerging markets:
- Devices such as apps, smartwatches and fitness trackers will increasingly dominate consumers’ lives, so these need to be central to shopper engagement
- Data science needs to get better at adding real insights and aligning processes
He also zoned in on an area that was much discussed at #NRF16: the store. In future, stores will become smaller and more flexible, with modular designs, IBM predicts. They will be entertaining, experiential and an unashamed showroom for consumers.
For the retail property industry, bricks-and-mortar footprints will be rented with an agile infrastructure and multi-purpose prospects – in order for retailers to deliver the brand experience through personalisation, using the Internet of Things to connect devices with an integrated infrastructure.
The role of the store and those who work within it will also change. We may see the decline of ship from store fulfilment, as retailers adjust their supply chain for direct to consumer commerce. Sales associates, meanwhile, will become the secret weapon in delivering brand promise. Customer service will become concierge-like, as front-line personnel are enabled, educated and empowered by cognitive insights.
On the subject of insights, data will be used within the art of storytelling. Retailers will need to combine external measurements – weather, events, location etc. – with internal metrics to stop looking at averages, and start individualising interactions; at store level, from one employee to one customer. Those customer needs and aspirations can already be forecast with 80% accuracy, so there is a lot of business value still to capture.
Where do industry players begin to rise to the challenge? Laughlin concluded with his top three takeaways to help retailers capture market share over the next decade:
#1 – engage with shoppers. There is only one channel, and that channel is the consumer
#2 – use cognitive systems to drive differentiation. At store level, in customer engagement and throughout the value chain
#3 – agility is key. Non-selling functions must be radically optimised to fund innovation