Setting a benchmark withcompelling transformation, how has Retail segment evolved so far?
Retail industry today stands at US$25 trillion and is expected to increase to approx. US$28 trillion by 2020. A very optimistic and dynamic segment no doubt.
Tracing its genesis and evolution in quick steps
- As a practice, it started as the barter system wherein animals were considered as the oldest form of currencies in 9000-6000 BC
- Then came the format of accounting and a first cash register in late 1800 and early 1900
- The year 1890-1920, marked the dawn of modern departmental stores wherein transition from mom and pops stores into departmental stores happened
- The 1940s and 1970s was the era when shopping malls started coming up – highlight was the opening of first Walmart store followed by other superstores as Kmart and Target.
- 1990s witnessed the debut of e-commerce
Since thenthe road ahead has been one of the fast-paced innovation catch-up ever. With Omni channel customer experiences gaining momentum, retail can be aptly termed as ‘retail-ainment’. It is not only the big brands but smaller ones also following the omni-channel strategy.
What role technology is playing in transforming the retail industry and bringing about intelligent retail?
Technological innovations have brought significant changes across industries and sectors. Its presence is visible in retail sector too. Technological advancements like virtual shopping assistants, in-store stylist robots, AI-powered recommendation engines, bot managed billing counters etc., have altered the dynamics of retail drastically. In fact the most visible transformation is of the buyers into digitally empowered creed who is also a hyper-connected consumer with a complete view of competing landscape.
In tandem, retailers are also bringing in innovation into established practices. Data Analytics and data intelligence have presented a striking picture of reinvented retail and retailers have decided not to be left behind. It is no wonder then a recent study claimed that
- By 2023, the global gamification market is expected to grow US$19.39 billion and retail holds the largest share in this market.
- By 2021, 70% of retailers will install in-store beacons for location-based marketing.
- By 2019, about 40% of retailers will develop a customer experience architecture supported by AI, boosting conversions up to 30% and revenue by 25% through hyper-micro personalization.
Surely, now is the beginning of modern intelligent retail with great focus on providing experiential and immersive customer experiences.Briefly, the mandates of retail have now changed to
- Moulding experiences: From being a product/service centric sector to a consumer-driven one, brands are now focusing on designing experience around the product. This, perhaps, is the pivotal change that has led the domino’s effect on all other retail aspects as well.
- Partnership mandates:Retail has attempted a new collaboration-driven ecosystem, with focus on providing customers all the relative experiences/benefits under one roof. In this attempt, retailers are trying to benefit from each other to provide bundled products/services to consumers. This is definitely a big leap towards improving product journey as well as buyer’s journey.
- Associated Shoppers:In the era of connected consumers, brands are now focused on evaluating and integrating real-time feedbacks in their retail strategy. They are very much aware that a single dissatisfaction projecting tweet may cause even loyalists to question or worst case abandon the brand.
- Acquiring Omnipresence: Almost 40% of millennials are still hopping stores for the physical experience even if they have had virtual experience of a product. This clearly means that retailers have to expand their footprint in omni-channel world and focus on providing seamless consumer experience.
These may be considered as trend driverspushing the retail industry for the next big leap by 2030.
Is there anything called “too much innovation”? How does frequent innovation impact the retail sector?
There is nothing like “too much innovation”, however frequent changes and innovation may create somecracks in the “quality” and “expectations”. An underline goal of all innovations should always be providing immersive and seamless consumer experience with no compromise on quality. For example, treating online and offline customer as two different entities. Retail strategies sometimes tend to give more importance todigital channels vis-à-vis physical store that may rob the potential consumer of cohesive product/service experience! Similarly, in the age of fierce pricing which is based on enhanced optimization algorithms, retailers run afterto be a part of thediscount race. This may result in lowering the projected value and quality of the products.
In both the cases, relying heavily on technological innovation and ignoring 360-degree approach towards brand strategy may adversely impact the brands. So, even though it is critical to constantly pursue innovation, it is more important to maintain the domain basics and practice relevant and responsive retailing.
What does the future hold for the Retail sector?
Retail sector riding high on technological innovations is set for great leaps. Some of the most promising futuristic technologies that shall disrupt the retail arena are:
- Customer identification and contextualization that can deliver a highly personalized experience.
- Significant advancements in natural language processing shall take the understanding of conversational retail a notch above
- IoT led delivery devices may make space for shorter delivery cycles (drones, robots, etc.)
- Augmented Reality shall provide a new face to omnichannel consumer experience.
- Renovating Brick and Mortar stores as emotion-experience centres with advanced elements like AI- enabled virtual mirrors.
- Social E-commerce shall take leap with consumers transforming into influencers and impacting the overall retail revenue stream
These technologies promise to better equip retailers for turning prospects into a buyer and a buyer into a loyalist, while simplifying the entire sales cycle.