Since the dawn of retail in the late 1800s, the retail industry has continued to influence present-day consumer expectations through the use of cutting-edge technologies. From the first cash register and bank-issued credit cards, which were introduced in the 1950s to provide "pay later" options and encourage more consumer spending — to the advent of online shopping enabling digital transactions between consumers and businesses, no other industry has experienced such extreme shifts in consumer behavior as a result.
Consider the rise of Big Box retailers, which took the department store model and supersized it to offer even larger product selections and cheaper prices. Some, like Toys ‘R’ Us, Linens ‘N Things, Circuit City, Filene's Basement, Sports Authority and Borders Bookstore, ended up in the ever-growing retail graveyard, while others like Target, Bed Bath & Beyond, Best Buy, TJ Maxx, Dick's Sporting Goods and Barnes & Noble endured. Most experts agree that in the contest of survival, the fittest prevailed and bigger no longer meant better in the eyes of consumers who could now compare prices and read customer reviews online.
Lessons From The Retail Graveyard
The days of brand security are long gone, thanks to e-Commerce, which took the retail industry by storm in the mid-1990s when Amazon and eBay launched to a global market and quickly evolved to offer consumers almost every product under the sun. Those brand manufacturers and retailers who were wise and willing to take risks responded by beefing up their online offerings, developing convenient mobile apps for smartphones and, above all, putting consumers at the center of the shopping experience.
In fact, consumer experience has inarguably become the Holy Grail of retail, particularly in an era where brick-and-mortar store closings have reached epidemic proportions. In 2017 alone, CNN reports that a record 7,000 announcements were made in the retail sector, with 662 bankruptcy filings representing a 30% increase from the previous year. As consumers satisfy their cravings for a purchasing experience that is personalized and simplified online and off, even location, time and distance are steadily losing relevance in today’s market, where 24-hour turnaround and express shipping at no extra cost lure customers from every corner of the planet. It's no wonder consumers have grown more self-centered, choosing the brands, products and companies that put them first.
Self Takes Center Stage
Due to the high demands of modern day consumers, research suggests that today’s customer-focused retailers and brand manufacturers now spend five times as much to gain a new customer than to keep an existing one. Thus, connecting to customers on an emotional level and providing them with a unique experience by anticipating what they need and expect — and exceeding those expectations every time — is the key to establishing a long-lasting relationship.
Whether a startup or a seasoned household brand, longevity is more than a promise or a boardroom mantra or a rock bottom price; it's a deliberate commitment to focus on the customer at every level, every stage and on every platform — in real time. That, according to key finding from the 2017 POS/Customer Engagement Survey conducted by Boston Retail Partners (BRP), is the future of retail, and one that will require new technology to provide the kind of unified customer experience that is personal, mobile, seamless and secure, rather than disparate technology and stand-alone systems that for decades have duplicated cost structures at almost every customer touch point. Convenience is also key to the experience.
- Personal: Taking cues from those who proactively send consumers personalized offers, flash sale notifications and product recommendations, many brand manufacturers in retail are discovering that "knowing" or identifying the customer right from the start is the key to personalizing the shopping experience. That's why 70% of retailers indicate customer identification is their top customer engagement priority, with the most prevalent technologies including WiFi (43%) and mobile web sites (40%), both of which over 70% of retailers plan to use in the next three years.
- Mobile: Mobile devices including smartphones, tablets and wearables have not only changed the way shoppers research and purchase but also elevated customer expectations toward service. That's why 49% of retailers (up from 31% in 2016) are using mobile solutions for store associates, with 89% planning to offer a mobile solution within the next three years, while 84% plan to implement mobile POS.
- Seamless: By the end of 2019, 71% of retailers plan to have a unified commerce platform in place, with cloud technologies the basis for offering a centralized POS, cross-channel and fulfillment services, real-time visibility and access to product and customer information and analytics.
- Secure: With data theft and fraud a growing threat to retailers and consumers alike, most survey respondents indicated a move toward a multi-layer security plan to protect sensitive customer and organization data. In addition to 96% planning to implement end-to-end encryption by the close of 2019, 73% will offer a single-token solution within three years.
- Convenience: Thriving brand manufacturers and retailers have learned that providing today’s savvy customers with what they want means offering more efficient pathways to purchase. Evidence of this can be seen in the growing use of online location finders, live chat widgets and in-stock features. Moreover, with options for curbside pick-up (such as Target's rapidly growing Drive Up feature), 24-hour delivery and multiple shipping possibilities from potentially thousands of sites around the globe, choice is allowing customers to experience the kind of shopping they crave from beginning to end.
Retail's Virtual Reality
The unified commerce platform of the future will undoubtedly incorporate the use of artificial intelligence, augmented reality and IoT (Internet of Things) technologies to achieve that personal, mobile, seamless, secure and convenient customer experience that brand manufacturers and retailers must provide in order to stay competitive and thrive. Given the current speed of innovation, it's not so hard to imagine a retail world where virtual assistants will help customers remotely choose and try on a complete outfit before ever stepping foot in a store or making an online purchase; where road simulation technology will allow a car buyer to take a test drive from the comfort of his or her living room; or where customer service will include the provision of a virtual representative who can provide useful information such as technical troubleshooting for specific products — in real-time.
If history provides us with only one lesson, it's that brand manufacturers and retailers should never lose focus of their customers. Once profit takes precedent, all bets are off. Evolving to meet the needs of consumers in both the present and future will most certainly require organizations to embrace new technologies. But that's just the price of admission. With more sophisticated, informed, discerning and self-centered consumers, each one of us included, the survival of the fittest will ultimately hinge upon a brand's ability to adapt, as well as its desire to discover — with precision — what, where, when and how people purchase. In the process, they will surpass competitors while radically improving strategies to attract and retain customers, promote positive brand identity, boost sales and increase revenue.
Anthony Ferry is co-founder and CEO of PriceSpider. With dual expertise in technology and sales, as well as a dedicated commitment to customers, Ferry is instrumental to PriceSpider’s continuing history of successful client engagements. His technical skills range from database design and software architecture to user-interface optimization and the software development process. In addition to serving as executive vice president and partner of Neudesic, Ferry has held key executive positions as a senior technologist, developing software solutions for a broad range of customers. A graduate of California State University, Fullerton with a degree in computer science, Ferry is an active supporter of the Make-A-Wish Foundation in Orange County and the Inland Empire and Chairman of the Saddleback College Foundation Board of Directors in Mission Viejo, California.