2018: The Year of the Retail Renaissance
With 2018 in full swing, we face an unusual time in retail. Retail institutions are struggling, while fast-fashion stores and discount retailers continue to grow exponentially.
While many have called this the “Retail Apocalypse,” the retail industry is just going through a period of innovation and disruption – similar to a renaissance. Consumer expectations have changed, and the speed at which brands need to respond to demand has accelerated. Consumers anticipate personalized experiences, a multitude of options for delivery and pickup, and consistency across channels. Retailers that can provide these wants to their consumers will thrive in the new year – and one of the ways to do this is through implementing a digital core.
According to a 2017 consumer insights report, 80 percent of shoppers are willing to share some of their data with brands if it leads to a positive experience. By leveraging this data with the help of digital technology, retailers are unlocking unparalleled access to consumer insights and the ability to be exceedingly responsive to their demands. Retailers that embrace this change will lead the charge through 2018’s period of renaissance.
Taking Personalization to the Next Level
2017 made strides in providing personalized touchpoints, but 2018 will be the year retailers utilize advanced technologies for optimized execution. Brands will be better at applying machine learning technology and predictive analytics to discover what products a customer is engaging with, what they’re purchasing, and what interactions they’ve had with a brand. This will enable retailers to better understand a consumer’s wants and needs, and cater to them through predictive technology. Machine learning and advanced analytics will help retailers automatically fine-tune consumer profiles, based on behavioral and shopper journey patterns, to match the best product to the optimal customer.
One brand that has been a driving force of this digital revolution is Maui Jim – who is using advanced analytics to elevate their consumers’ experiences. Maui Jim developed a website that allows shoppers from across the globe to browse its online catalog and create personalized sunglasses. Using e-commerce to expand its sales, the retailer can offer personalized experiences while still providing products that are consistent with the company brand. Through its use of technology, Maui Jim has experienced an increase in sales and social awareness. While Maui Jim may be ahead of the pack, in 2018 we’ll see continued growth of retailers applying advanced technologies to deliver the personalized experience consumers want.
Delivering True Omnichannel Experiences
Today, retailers need to meet consumers where they are, which includes a variety of sales channels. In 2018, we’ll see brands provide the seamless omnichannel experience consumers truly expect – which means connectivity across all points of interactions.
ULTA has been looking ahead of consumer trends to become a trusted advisor to its shoppers wherever they engage the brand. The beauty retailer offers video tutorials and inspirational trend reports online; in-store shoppers can consult with associates, and test products; and through the mobile app consumers can check how many loyalty points they’ve earned, receive notifications and offers, and provide feedback. ULTA’s omnichannel strategy ensures that both consumers and associates are accessing and utilizing the same set of information at any point. From product discovery to education, through testing and purchase, to social sharing and feedback, ULTA is simplifying and facilitating the process through a consistent set of data that is also beneficial for business reporting.
Digitalizing the Supply Chain
The growth of e-commerce had led to a multitude of options for delivery and pick-up – changing consumer expectations around how long they’re willing to wait for items. According to Deloitte’s 31st annual holiday survey, only 42 percent of shoppers consider three-to-four-day shipping “fast.” Instead, 83 percent of shoppers consider fast shipping within two days or less. Today’s shoppers expect to see something, buy it, and receive/use it almost instantly – and retailers need to be able to keep up.
In 2018, we’ll see retailers starting to operate with a digital core that can collect data to track inventory and the location of products in real-time, as well as gather information on consumers and markets. This will help retailers to provide each store with specific items of interest at the right time. While some brands are still catching up, shoe retailer ALDO is on trend. Thanks to ALDO’s recent digital transformation, the brand now can apply data analytics to the supply chain process, which gives it the speed and agility needed track inventory across stores.
Retail is going through a period of transformation, and as innovations in technology expand, consumer demand will continue to transform the landscape. In 2018, we’ll start to see a growth of retailers who are redefining the industry to provide the experiences consumers truly want – personalized, fast, and across all channels. It is time to put the “apocalypse” behind us and utilize new technologies to thrive in 2018 as we experience the “retail renaissance” via the new digital era.
About the Author
Lori Mitchell-Keller is global general manager of consumer industries at SAP. In this role, she leads the retail, wholesale distribution, consumer products and life sciences industries with a strong focus on helping SAP customers transform their business and derive value while getting closer to their customers.