It was impossible to ignore the sense of enthusiasm surrounding the retail industry at this year’s Nation Retail Federation’s (NRF) ‘Big Show’ in New York. For the first time in years, retailers are no longer in cost-cutting mode and are actually in growth mode. After years of recessionary business strategies, consumer confidence appears to be rebounding, creating strong opportunities for retailers. To find out more about the retail trends that business owners should be paying attention to in 2015, I sat down with Michele Duprè, vice president of Retail & Hospitality and Janet Schijns, vice president of global, vertical and channel marketing with Verizon Enterprise Solutions. Here’s what they had to share.
What excites you the most about the retail industry in 2015?
Duprè: What excites me the most is how retailers are leveraging technology with the end-user experience in mind. When you look across the industry, there's definitely a desire for retailers to better engage with their customers. To do this, retailers must personalize their marketing messaging and make it very specific to what they want the consumer to engage with them on. It's about leveraging an e-commerce website that uses analytics to track previous purchases and correlate historical purchasing trends with current trends and recommendations. And it’s about correlating buying patterns and using that big data to push specific products, rather than expecting the consumer to wade through pages and pages of potential merchandise. Retailers also must use mobility to continually engage customers by pushing promotional items, discounts, loyalty programs, as well as general communications.
Schijns: I see the omnichannel strategy in retail accelerating to ensure a seamless customer experience regardless of customers’ choice of shopping venue. This will be further enabled by advances in location proximity; social networks; and the ability to shop, live, play and purchase items in a collaborative manner anywhere and at any time. As I look at this consistent value add customer experience — in-store, online, mobile, via social networks — the key is to involve the next generation of buyers, the Millennials, in designing the experience rather than creating it behind your own four walls. These shoppers will become the nation’s largest buying group in the next five years, demand that they receive a voice in their shopping experience and help retailers to understand and implement the services they value — this approach has not been historically how retailers have designed technology upgrades. This is not about just giving them a situational awareness of where they shopped before or what they might have looked at last time, but a next level of engagement in the brand and your product that ensures that the product starts with the retailer but is in effect completed by the shopper’s experience.
What role do you think data and analytics play in the modern retail business and are retailers still challenged with how to use that data?
Duprè: Retailers are still challenged with how to best use data, because there's so much information being created. If retailers are able to make the information relevant to what it is that they want to do — whether it's a specific engagement or promotion — then I think it is a much easier task. Businesses still struggle with analytics because there is so much information for them to sift through and really determine what's relevant for either a promotion or something specific that they want to achieve. They have to define exactly what they want the customer experience to be in order to build the technology and draw on the data, and they must make sure that the customer experience that they want is the same across their entire brand. I think this year will be the year that we see businesses that will stand out and leverage the data and analytics they have and use it for meaningful customer engagement.
Schijns: The key is not big data, which simply indicates quantity — rather it is about deep data. In fact, Data and analytics have been driving the retail business forever — just look at the original planograms that were driven by data about the customers’ shopping patterns. Deep data is a new way of ingesting the right data to be able to continue to enhance customer experience and drive better decisions for retail business. What retailers must do is use technology to move workloads to the cloud to shrink the time between capturing the data and the data being actionable in that minute that matters. After all, knowing something valuable about your customer after they leave the store isn't quite as valuable as knowing something about your customer when they are in the store. Retailers are going to have to balance the need for data that matters at the minute and that matters for managing risk and then really dig down on those deep data analytics to enable personalization of the customer shopping experience.
How has the increased use of e-commerce and mobility channels affected retailers in the past year?
Duprè: In total volume and sales, e-commerce is still a small piece of retail sales, but it is growing year over year. I think retailers understand the importance of the online channel, because it not only engages with the customer to actually convert an online engagement to a transaction, but it also educates the consumer about product availability of a product and gives them purchasing flexibility. The online platform has become a point of education and it's becoming part of their brand. There are retailers out there that are very forward thinking regarding the relationship between their consumer engagement strategy and their e-commerce platform. But I think there are still a significant number of businesses that are behind their peers. I think retailers that are still not investing in their e-commerce platform or cannot see that it's part of the overall customer experience, are the ones that will be left behind.
Schijns: The key for retailers is to adopt these mobile strategies while still investing in secure platforms — one piece of advice here — don’t try to save money on items like network, mobile payment solutions or data storage — security matters. Once the right platforms are in use the customer experience is the primary driver for this holistic, singular channel that the next-generation consumer is looking for. We are seeing mobile phones and tablets continuing to play a growing role in retail for education, loyalty apps, purchasing, mobile ordering and payments. What is essential is not to see this as a standalone trend, but to realize that consumers want easy-to-find product information and the ability to purchase that product in the manner that works for them. It's no longer about the “one-and-done” transaction — it started on a phone and it ended on a phone — the consumer’s shopping experience is a much longer process now, involving multiple screens and virtual environments.
Click here to read part two of our candid discussion, as we discuss cloud implementations, network upgrades and how retailers can mitigate the risk of a breach.
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