Not too long ago, many including myself were forecasting major consumer changes for the year 2020. That magical year is just around the corner and it is now time to simplify the digital future of retail.
Big Data is Bot Food for AI
Information or more specifically data has been the power engine evolving the retail industry. For much of its history, the store, the forefront of the consumer moment of truth, was under-sensored.
With the connected consumer able to instantly choose alternative products or brands, retailers need to integrate a greater number of data sets inside their stores. Welcome to the Internet-of-Things for Retail (IoT):
Every National Retail Federation (NRF) Big Show, Deloitte publishes updated research on the top 250 global retailers. This favorite annual retail report summarizes industry / economic global trends and dissects the shifting sands of the world's largest retailers. This post summarizes my favorite insights from the 2018 edition.
The rules of retailing "are being rewritten in this time of transformative change. Innovation, collaboration, consolidation, integration, and automation will be required to reinvigorate commerce, profoundly impacting the way retailers do business now, and in the future."
The 2018 retail industry trends identified by Deloitte include:
This week finds me in Asia with stops in Shanghai, Bangkok, Hong Kong, and Tokyo. On many levels, Asia is the "below the surface" retail innovation laboratory.
In the "Retailing 2020" post I proposed that you "Look to China where 500 million people are already shopping on mobile phones to understand the future of retail. Digitally driven ultra-convenience, spontaneity, and social shopping trends are transforming all Chinese retail sectors including grocery." During this trip I had the opportunity to visit the Alibaba digital / physical hybrid Hema Supermarket in Shanghai.
Building on the "NRF 2018: The Ten Quick Transformational Retail Trends", as promised here are my three below the surface trends of the New York Big Show that define the future of retail.
More than 37,000 retailers and industry partners from 90+ countries descended on New York for the NRF 2018 trade event the week of January 14, 2018. Because this was one of my favorite NRF's to date, a series of posts will follow.
An annual tradition is to walk the floor observing the technology themes, speaking to lots of retailers and industry friends, and creating my own personal list of the foundational ideas that are evolving the retail industry.
From an initial list of 20+ observations, following are my top 10 quick takeaway trends of NRF 2018.
At its roots, retail has always been a human covenant between a shopkeeper and a consumer. For much of the industry's history, the transactional interactions were highly personal. The shopkeeper welcomed the customer by their name and adapted the goods sold based on their preferences.
Present-day mobile devices connected to the Internet-of-Things (IoT) are appreciably digitally disrupting consumer commerce. By 2020, retail shopping, no longer a chore, will blur into your everyday life.
A key highlight of 2017 was a retail customer panel that I had the pleasure of moderating. Four executives (two recently retired and two still active) representing over $70 billion in revenue shared their insights on industry megatrends, driving disruptive change, choosing a technology partner, and the future of retail.
The Retail Megatrends
"Step with care and great tact, and remember that Shopping's a Great Balancing Act." (1)
As we enter the busiest shopping season of 2017, I started reflecting on the differentiation strategies for a successful transition to the digital future of retail. What are the definitive formulas for retail success in 2018 and beyond?
McKinsey in October 2017, published a great article on shopping and personalized marketing. "Targeted communications that are relevant and useful can create lasting customer loyalty and drive revenue growth of 10 to 30 percent."
As part of their marketing personalization analysis, McKinsey pointed to this simple formula:
Couple of weeks ago had the pleasure of co-hosting a Retailer Performance Council for Tyco Retail Solutions in New York. This post was inspired by now customary welcome toast for our distinguished retail guests and a presentation by Dr. Sanjay Sarma from MIT titled 'The Inversion Factor - How to Thrive in the IoT Economy'.
History of RFID
In December 2016, Amazon Go was introduced to the world. The premise of the new 'Just Walk-Out technology' store was to empower consumers to walk-in, pick up any products, and track it all through a virtual shopping cart. "When you're done shopping, you can just leave the store. Shortly after, we'll charge your Amazon account and send you a receipt."
Click LINK to see the Amazon Go video
Recently I had the opportunity to participate in the World Department Stores Forum 2017 in Toronto, Canada. Forty five retail CEOs joined 300 attendees in an industry event titled "Digital and Brick-n-Mortar: One Magic Experience".
The host for the 5th Annual Edition was the Canadian luxury department store chain Holt Renfrew. The Forum is co-organized by the Intercontinental Group of Department Stores (IGDS), the largest association for department stores worldwide. IGDS has 41 members from 38 countries on all continents generating $89 billion in total sales in 2016.
The stage for the 24 hour retail discussion was set by Craig Wright, SVP & Chief Economic of the Royal Bank of Canada when he said that the "Last time interest rates stayed low for so long was in 3000 BC." We are living in extra-ordinary age of disruption.
This post summarizes my favorite insights from this year's IGDS event.