Why Retail Needs To Catch Up With Technology
Erika Koivaon 22 January, 2016 at 03:01
On the final morning of the 2016 NRF BIG Show, two keynote sessions analyzed the growing trends of retail and how to accelerate retail innovation further. Below are the 3 things that we thought brands and retailers can take away:
Retail brands need to keep up with, and learn from, technology brands
During the day’s first session, Pano Anthos (Managing Director of XRC Labs) made a bold statement: Store experience has not significantly changed in the last 100 years. To this day the general customer experience is to walk into a store, browse, try on the product and take home the product. Despite the great strides retail has made through technology innovations and eCommerce, Anthos explained that it has yet to significantly change the retail experience.
Technology brands however, have skyrocketed over the past 100 years. If retail brands can learn from technology brands, they will grow at the same pace. Typical retail concepts need to change, especially in the following ways:
1) Brands who try to be exclusive within retailers to heighten value, are often limiting brand reach.
2) Keep physical assets light—don’t focus on these but move quickly, nimbly and don’t own anything, and 3) Experiment—Technology brands are not afraid of failure, and retail brands shouldn’t be, either.
Stop selling products and start creating services
More and more we see that consumers are valuing experiences. According to Anthos, 75% of consumers want shopping to be enjoyable. This seems like a simple and obvious task, but how retailers can create this enjoyable experience has greatly changed. Providing services introduces a new element in retail that keeps up with the consumer expectations. For example, Anthos discussed General Motors. GM sells cars. But they recently invested in the ride-sharing company Lyft. GM is realizing consumers no longer want to own a car, they just want a ride from point A to point B. This service is just as valuable as the product itself.
In addition, consumers increasingly want to know what makes up the products they use. Is my t-shirt made of 100% cotton? What are the chemicals inside my make-up? Brands and retailers need to be a partner to the consumer in their journey towards good health and making informed choices. Providing these resources and guidance is providing services, not just a product.
Give consumers flexibility
During the second session, Stacy Ferriera (CEO and co-founder of Forrge) discussed millennial needs. In general, Millennials want the flexibility to do or choose as they see fit, and this goes for the products and services they use, too. Uber allows consumers to get a ride when they need one, and can choose a car based on the size of the party they are with or the price they want to spend. Whatever their current need is, the brand has the flexibility to fill it in that moment. And this all happens with a touch of a screen—technology is aiding these brands in becoming more flexible.
In the same session, Anthos gave another great example of a brand that provides flexibility: Starbucks. This brand was able to take a 50-cent commodity and turn it into a $6 personal experience. Consumers can ask for a beverage essentially any way they’d like it. No matter the combination or type of coffee, they know the barista will create what they are looking for. And once again, technology enables this flexibility even further. Starbucks’ mobile payment platform has skyrocketed their sales, as it creates another way for consumers to get what they want when they want it.