Join us today as we explore how in-store experience and personalization are changing the way consumers shop. Spots are available for our webinar today at 1pm, CST. Register here!
Last week, Amazon nabbed a significant share of the spotlight as representatives of news outlets and social media descended upon their long-anticipated retail endeavor, Amazon Go.
For a moment, some of the media had a little bit of fun with the concept of a store that was predicated on having no lines.
I’m in Seattle and there is currently a line to shop at the grocery store whose entire premise is that you won’t have to wait in line. pic.twitter.com/fWr80A0ZPV— Ryan Petersen (@typesfast) January 22, 2018
Billed as a cashless, checkout-less store, customers enter with the Amazon Go app already installed on their smartphone, select the items they want, and walk out. On advertising hanging in the store, Amazon calls this “just walk out shopping” and hopes that the seamless experience, devoid of checkouts, improves the long lines and wait which greet shoppers at many of our supermarkets.
Inside the 1,800 square foot store, customers have their pick of Amazon’s branded and prepared food selections including ready-made lunch kits and sandwiches. They can choose to put the items in brightly-colored orange shopping bags or defy the logic of everything that has been taught to them since childhood -- and place the item directly in their backpack or pocket.
At the end of the first day, Grub Street reported that there was only one “shoplifting” incident. Ironic, because the second someone walks into the store, a bonanza of cameras, sensors, and movement tracking are able to determine what items were picked up and are immediately moved into a virtual shopping cart that links to your Amazon account. When you walk out the turnstiles, you’re sent a push notification that identifies the items you “bought.”
While for the moment, it’s just one physical store location, Amazon’s push into a world of shopping absent of cashiers is indicative of the future of retail. Questions linger about what will become of an industry that hires more than 3.5 million Americans in stores across the country. Amazon indicates that there is still a need for manual labor to be hired. An army of employees in the Go store is there to help answer questions, check IDs for alcohol purchases, and to stock shelves. They also have the staff needed to help prepare and package the food and lunches that the store sells.
Here are some of the other trends that we think will help shape the future of retail, and how we buy goods, hire employees, and stay productive in the workplace. Throughout the coming months, we’ll explore and dive deeper into these topics separately on our blog. If there’s an important trend that we missed, share your story ideas and predictions in the comments below.
Trend #1: 🚚 Amazon is a Force
The opening of the Amazon Go store highlights one of the trends we’re keeping tabs on for 2018. The stunning pivot that changes consumer habits at a brick-and-mortar store is interesting, but the implications of the technology driving these entrenched shopping flows are even more fascinating: how high-definition cameras, computer visibility, sensors, and deep learning are changing the way we buy stuff from retailers. Undoubtedly, the experiments in changing consumer movements, on mobile and in physical locations like ‘Go’, will have a big impact in how others will follow, or choose to proceed in new directions.
Trend #2: 🚀 Acquisition Watch ‘18
Amazon experimented with delivery returns at Kohls and purchased Whole Foods which begs the question: What’s next for the tech giant? And, what’s next for other retailers looking to combine forces. Amazon's acquisition of Whole Foods represents an entirely new audience of high-earning customers and an ability to mechanize their delivery system, improve logistics and shipping, and become a physical pipeline for Amazon private label merchandise. Amazon Lockers started making appearances at Whole Foods lobbies around the country. At the close of last year, one Minneapolis investor predicted that Amazon could purchase Target. It will be interesting to see what else happens on the acquisition front with big names like Abercrombie, Dillard’s, Nordstrom, and Macy’s.
Trend #3: 🛍 🏪 Brick-and-Mortar Retail Thrives
The death of retail has, to some extent, been largely misinterpreted. Many major retailers (including well-known legacy retailers) face questions about their future and have experienced store closures. Malls that once thrived have been shuttered. Yet, on the other hand, other American retailers continue to see positive growth, including Dollar General, Tractor Supply Company, and Nordstrom. The strongest holiday shopping season we’ve seen in over a decade has also helped boost quarterly earnings for retailers like Kohl’s.
Lost in the dialogue about the doom-and-gloom of our American retail outlook, more than 90 percent of retail sales occur in a brick-and-mortar location. At the same time, the stories of mall closures and department store shutterings have garnered headlines and painted a somewhat inaccurate, incomplete picture. Scott Galloway, author of “The Four” argues it’s the audience that has shifted. “It’s not stores that are dying, but the middle class, and the stores serving them,” he says. It’s as much a story of our current demographics as it is our current migratory patterns: families and young people are leaving suburbs behind for a return to urban centers to be closer to careers and work.
Mall owners and developers that have sold under-performing locations are now re-investing in top-performing malls. In addition, retail stores like Dollar General plan on opening up more locations this upcoming year and they opened plenty of store locations last year, too. According to the National Retail Federation, data from the IHL Group shows “a net increase in store openings of over 4,000 in 2017. For every company in America that had closed a store in 2017, 2.7 companies are opening a store.
In the United Kingdom, it’s a similar story: Data from the British Independent Retailers Association illustrates that more shops were opened than were closed in the first quarter of 2017. This was an increase of 414 shops in the first three months of 2017, compared to a net increase of just 4 shops for the same period the previous year.
Trend #4: In-Store Experience & Personalization
Today’s shoppers want an experience when they shop. That’s why “chore shopping,” the act of replenishing home goods, groceries, and staple products has largely been relegated to online retailers who have made it very easy to shop, click, buy. Simplified membership renewals, single-tap purchases, and ever-faster delivery streamlined what was once a time-consuming repetitive shopping need.
Amazon will continue to rapidly advance the ways in which we get these “staple” items using technology to find new ways to predict and automate our shopping. Perhaps, drones will automagically drop them into a bin in our yard, or tubes connecting our homes to fulfillment centers will keep our toiletries and groceries constantly stocked. We kid, sort of.
In the meantime, this is where the opportunity for brick-and-mortar and independent retail comes in. Today’s consumers are eager to connect their in-store shopping visits and purchases to experience -- when they can hold a product and envision how it fits into their life.
When shoppers are motivated to venture into a physical store, it’s increasingly becoming less about purchasing those “commodity” items and more about finding something unique they cannot find anywhere else. If the product tells a story or fits into the shopper’s lifestyle, even better.
Today, the core of experiential retail revolves around a focus on smaller, more efficient and tech-enabled spaces that mimic both the choice & simplicity of today’s online experience. These stores are also staffed with associates who provide exceptional customer service.
Here are a few examples of retailers who are creating incredible in-store experiences.
Yeti, the Austin, Texas-based brand behind much-hyped Yeti coolers, has integrated Salesforce Cloud computing into their e-commerce platforms. This was a bet they made well before mobile became a must-have in retail which has allowed the brand to use data from their consumers to create personalized product offerings based on information about previous purchases. They can also send out deeply-targeted content and offers by relating them to the consumer’s location and travel preferences. For those who prefer the in-store experience, Yeti’s Austin flagship store is a sight to behold. While the in-house content team creates a beautifully filmed and written story, the design of the brand for their physical location matches the same fidelity. Customers get a hands-on experience and can walk through museum-level exhibits to see the history of the product. Part activation hub and part social destination, Yeti's store also features a bar and space for consumers to hang out, mingle, and meet others -- staples of today’s in-store experience.
MartinPatrick3 in the hip North Loop District of Minneapolis is accomplishing what few have done before in their 15,000 square foot mecca to boutique shopping. Words don’t quite do this place justice. Scrolling through their Yelp reviews, you encounter guests who mention the attention to detail and customer service. Many of the reviews rave about the “experience” they feel shopping there. This helps explains their success -- along the way, they’ve broken some traditional rules of retail: they aren’t afraid to have sales personnel counsel and steer customers away from goods in an effort to match them with the best, most authentic gear. They also ditched their eCommerce site with the goal of keeping people shopping in their physical store and do what retailers used to do -- build lasting relationships with customers designed to portray honesty and keep customers coming back. Whether or not people buy anything doesn’t matter -- there’s plenty to do in the store from sipping champagne in the VIP lounge to getting a haircut at the in-store barber stylist.
The French apparel brand, SMCP has created mobile apps designed for in-store associates to help strengthen the consumer journey by showing them lookbooks and current fashion trends. Associates can then use their deeper product knowledge from the app to create personalized shopping advice and recommendations.
Trend #5: 👫 Assisting the Store of the Future
Back in the 90s, (If you’re old enough to remember those days), we used to tell our kids: “Never talk to strangers on the Internet and never get into a stranger’s car.” We can now say the same for employee staffing. Who could’ve predicted that we could secure a cashier from a pool of local employee candidates on a mobile device? Well, now we can.
There’s a whole new mobile workforce and businesses need to adapt and adjust accordingly. We obviously think this is crucial -- not only to our business but the marketplace and retail in general. While we’ve designed a tool to help managers upload schedules and provide a tool for employees to swap shifts, there’s a plethora of new and emerging startups that are building models to help suit retailers big and small across a number of retail verticals. From the music that shoppers hear piped into the store to inventory management and customer loyalty, here is a sampling of the businesses and startups that have emerged to help retail move forward.
Trend #6: 🤖 📲 Artificial Intelligence
More than just a buzzword, artificial intelligence (AI) is gaining traction in the retail world. As competition with Amazon continues, retailers will seek new ways for technology to help power business decisions and also empower the consumers. AI, through machine learning and advanced analytics, has the ability to help businesses gain insights into their users, turning ideas and insights into actionable plans. Speaking at Davos last week, Ikea CEO, Jesper Brodin told CNBC, “We haven’t been able to do before is to find easier ways to connect with people so digital opens up massive opportunities for us.” In September of last year, the Swedish furniture giant rolled out a new augmented reality experience that helped users to visually see their furniture in real environments around their home.
📹 Join Our Webinar Today
If you’re interested in learning more about how some of these trends will impact shopping, be sure to join our Shiftonomics team today (January 31, at 1 p.m. CST) as they discuss how in-store experience and personalization are driving the future of retail.
To register for our webinar please go here.
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