The Innovations in the Future of Retail
January 13, 2018
The Race to Innovate
Digital technologies have completely changed the way the retail industry speaks and interacts with its customers, particularly as big data capabilities create opportunities for more meaningful relationships between retailers and consumers. As the retail market continues to evolve and consumers become more and more aware of their options, competition between retailers is increasingly hefty—with some retailers embracing emerging technologies and others still living in the Stone Ages.
Those who are able to adopt and implement evolving technologies have a greater chance of establishing lifelong and multi-generational relationships with a consumer base who has become increasingly overwhelmed with an abundance of choices. While we expect to uncover many trends at this year’s NRF, what we know without a doubt is the current and future state of retail is more human than ever.
And, as partners, it’s this market opportunity that Idean and Capgemini are tapping into, helping retailers understand and adopt the latest technologies to optimize their customers’ experiences and significantly grow their market potential. As NRF 2018 kicks off this week, we thought it would be a good time to talk to folks from both Idean and Capgemini to discuss emerging technologies, market trends, market forecasts—and how, together, we can help our retail clients optimize and grow their market share.
Watch our video, created together with Capgemini, about the web of technologies that are present in a customers’ journey.
Cathy Wang, Director of Strategy and Growth at Idean
We sat down with Danielle Dawson, Senior Consultant at Capgemini; Shashi Subramanian, Managing Consultant at Capgemini; and Cathy Wang, Senior Director, Global Strategy and Growth at Idean to discuss the current state of the industry, its challenges and opportunities, a forecast for the future of retail, and how Idean and Capgemini can work together to help retailers actualize their goals. Here’s what they had to say.
The Current State of Retail
In our digital age, consumers have become very tech-savvy, which introduces new challenges and opportunities for retailers—who should be adopting technology as a long-term strategy, not as a quick fix.
Dawson says, “Retailers are confused, which is a great opportunity for Capgemini and Idean to give a guiding hand and help retailers navigate their choices.”
“We help them understand what technology fits into the retail experience, and help them become more innovative so they’re not only picking technologies for now—but for the future.” — Dawson
Today, Dawson says, “A visibility across the supply chain and with online fulfillment have industrialized technology that has revolutionized the retail experience, especially with the likes of Amazon.”
Wang goes on, “We can’t talk about retail without thinking about economics—and Lionel Robbins of the London School of Economics defined economics in 1932 as ‘the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.’”
“Retail is about the human behavior of interaction and the consumption of life. The world changes in rapid speed and we are seeing the boom and bust of different undercurrents. We have been going through a rapid phase of digitization, and now retailers are trying to find out what more they can do beyond digitalization.” — Wang
“The retail industry is in a state of disruption,” Subramanian adds. “This disruption is largely due to rapid changes in customer behavior and new competitive operating models. Never has the misalignment between customer expectations and retailer capability been higher—nor is the gap closing easily. Retailers are seeing competition from online-only players, niche artists, and even from their suppliers.” — Subramanian
Subramanian says that, today, retailers must inspire their communities while providing a sense of convenience in order to to become and remain successful—all while keeping an eye on their bottom line.
Key Factors in Moving the Retail Supply Chain & Customer Experience Forward
Retailers are a market which, historically, have long maintained legacy systems and processes and have been slow to adopt and deploy new technologies. As we move further into a digital age, retailers are finding themselves faced with a conundrum—they must not only “accept new technologies, but also invest in and upgrade old systems,” Dawson says. Subramanian also points out that “customer experience and loyalty are increasingly linked.”
“Loyalty is where the customer experience transcends the transaction and becomes an emotional bond with the customer,” Subramanian says.
This is where personalization becomes increasingly more important, too. Customers desire convenience and inspiration from a brand, and, Subramanian says it’s important for there to not only be “a clarity in expectations, but also an openness in sharing information—like the origin of a product—as well as creating a personalized experience for a customer, which includes timely and contextual offerings.”
This is where loyalty comes into play, Subramanian says. “Retailers need to focus on the end-to-end customer experience—both online and offline—from acquisition to well beyond sales—to make that leap to a loyal customer who will buy that much more from the brand.”
Dawson points out that state-of-the-art experiences some retailers are introducing revolutionize customer experience and, subsequently, an increased interest and loyalty. One example, she points out, is heat-mapping, which tracks customers as they walk around a shop floor, tracking what products they pick up and put down. This provides a wealth of knowledge that retailers can pull from. Shoppers are busy, and collecting data through analyzing individual consumer behavior allows retailers to optimize shopper experience while providing the added value of simplifying their visits.
Furthermore, revenue growth should no longer be the only catalyst for retailers. Wang says that in the “ever-connected world, consumers are interacting with the world very differently.” Retailers should be asking how they can offer non-linear, emotional, and cross-value-chain experiences.
Wang points out that this approach can create brand loyalty which can evolve into the aforementioned multi-generational loyalty, particularly with increasing lifespans. This can be further established by creating an emotional relationship with the consumer, too, she says.
“When I was a child, I loved the unpacking experience of a Kinder Surprise. I felt so lovely and excited about it. That emotion stayed with me as an adult. Now I have a daughter, and if I go to the shop to find a chocolate, I look for a Kinder Surprise because it still triggers emotion—and a powerful memory.” — Wang
By reflecting on this cycle, retailers can target life events that draw on human emotion. If humans live for 120 years in the future, the emotions and relationships built around a longer life cycle would be very different, making expectations for a lifetime relationship very different. So, Wang says, “Retailers need to start thinking about lifecycle and life events.”
And Dawson says an emphasis on the next generation is important too. “If we think about next gen—born with tech surrounding them—their expectations about the world are much different than five years ago. They’re going to want different things and will expect different outcomes,” she says.
By focusing on adopting new technologies and shifting focus to long-term strategies that include generational, multi-generational, and next-gen goals, retailers can establish a significant advantage among competitors.
Cathy Wang, Director of Strategy and Growth at Idean
Danielle Dawson, Retail Consultant, Capgemini Consulting UK
Shashi Subramanian, Managing Consultant, Capgemini UK