Luxury brands like Louis Vuitton and Gucci are everything a shopaholic would want. These brands have been classified as the cream of brands that have kept them as the most wanted items. Thus, with the most durable materials and elegant designs, it is hard to resist them.
However, as prices are exorbitant, fake products similar to these brands have begun to exist. These duplicates have been created with so much similarity that it becomes very hard to draw a line between the original and fake. Therefore, the notion of Blockchains became the best solution to tackle this problem at hand.
Fake products and its’ impact on the originals
As mentioned in my previous article, most of these luxury products are hard to afford for a vast majority of people. These products have been aimed at the high-class society who can afford them.
However, the rationale behind this high price is that these brands focus on customer satisfaction, experience and are very committed to each product that is released. The quality of products is always top-notch which is why the price is a bit steep.
Due to this pressing factor, many duplicates have been created so that others can buy these products as well. In many Asian countries like India, streets are filled with fake and original products that even consumers are not able to distinguish them.
In fact, the duplicates come in various categories often sold as original for higher prices but affordable than the originals. Statistics reveal that counterfeit markets earn up to $450 million a year.
As discussed in my previous article, the issue is that since these products are given at a lower cost, they tend to be of low quality. This, in turn, ruins the reputation of the original that negatively impacts the brands. Therefore, due to this rising concern, customers and business partners as well lose the trust that they have of these luxury brands and end up demanding for refunds or exchanges.
The worst-case scenario is when they completely stop using the products and give negative reviews that tarnish the image of the brands.
On the other hand, these luxury brands fail to create more unique designs and neglect to think of the betterment of them. Rather, they end up spending time and money solving these quandaries that are a nuisance to them.
Blockchain Technology as a solution
The Blockchain technology is designed to bring in more transparency to products which proves the authenticity which is what the customers now look for. The one factor that consumers now look for is the sustainability of products along with authenticity.
This is due to the increased vulnerability of paying more and getting their hands on fake products. Consumers are even willing to pay more if the goods are more durable which was revealed in the 2015 Nelson Global Sustainability report. Thus, thanks to Blockchain, it shields these brands from the eyes of fake producers.
One of the blockchain technologies that is worthy to discuss is Curate. It is a decentralized app that gives digital tokens when scanned gives the history and origin of the product. This is vital because most of these luxury brands have set high prices because they do not compromise on quality which fake producers do.
Brands like Gucci and Zara have begun using this for the benefit of the consumers. Therefore, customers are protected from being exposed to fake producers or buying duplicate products.
This Curate project uses a remote frequency identification system that uses RFID smart tags which assures the authenticity and genuineness of the products. You can scan codes and even see the history of garments or fabrics.
Another plus point is that it rewards consumers with crypto currencies when they contribute to the platform. You can give positive votes and reviews so that it increases the credibility of the brands and this reward system ensures that the platform is a transparent community not plagued with counterfeits.
This, in turn, increases sales as well since it portrays the genuineness of products particularly of luxury brands like Louis Vitton which always tends to fall into the hands of fake producers.
Louis Vuitton’s AURA
Another concept that was introduced by the owner of Louis Vuitton is the Aura which is built using Quorum. It is an Ethereum blockchain and began on June 2019. This was created to track and authenticate luxury goods. This platform will initially be used by Dior and the luxury handbag brand Louis Vuitton. It will then be open to 60 other luxury brands as well. It is a private blockchain that was developed by JP Morgan and aims to enhance privacy.
Through this platform, customers can see information about the products and the materials used. In this way, users will know the genuineness of the products and its originality will not be an issue. You can even trace the origin from the raw materials until the point of sale and it also protects from fraudulent ads. It is, in fact, the best way to enhance brand authentication.
However there is no specific app for Aura, but it will do its’ job veiled behind the app of the luxury brands. In a market filled with counterfeited products, Aura is a vital tool to ensure the credibility of original products.
The blockchain technology is a great approach for tracking the genuine product and handling counterfeit markets like India and China who have a history of creating fake products that are very much similar to the original brands. Therefore, Blockchain technology is the remedy to the woes of luxury brands and with this technology, one can feel very confident about the future of luxury brands and its’ reputation untouched by fake producers.
If you are interested in hearing more about the future of retail and bloackchain, feel free to contact me at email@example.com 🙂
I had the opportunity to attend the Norwegian Trade Conference in Oslo 24th September featuring some of the most interesting retailers in Norway, and even a couple of international speakers. The focus for this years conference was BOPIS + BORIS = True, but some of the keynotes also focused on traditional retail and omnichannel.
Trade is never a dying concept but rather a constantly changing industry. This rapid change and advancement bought in two e-commerce acronyms to the market. This is none other than BOPIS which is abbreviated for buy online and pick up in-store facility and BORIS which is bought online and return in-store. So what does this give your business? How does it support customers to have a better shopping experience? These are the questions we intend to answer by the end of this article.
These new purchasing behaviors have widened the scope of shopping gives more flexibility and convenience to your business. Let’s dig in deeper and see what advantages these new Omni channels provide you with.
From apocalypse to renaissance?
Trade would never reach an apocalypse. Rather, it gives new beginnings just like the renaissance. So, it can be related to it as well. There is one question that many have in mind when it comes to engaging consumers and maintaining relationships with them further with regards to trade and business. Is trade all about customer experience or it solely based on price?
Recent statistics that mainly focused on Norwegians show that Norwegian shoppers who shopped in physical brick and mortar stores in Norway increased by 16% from 2012-2018 and those who shopped abroad in physical stores increase by 76% in the same time frame.
On the other hand, Norwegian shoppers who purchased from Norwegian online stores increased by 101% and purchasing from international stores increased by 146% from 2012-2018.
It also revealed that 50% of consumers preferred physical stores whereas 20% preferred online stores. However, 30% did not really have a particular preference.
Therefore, these facts show that customer service is not just a department or a small fraction in the trade industry. It plays a bigger role as the main purpose is to build a loyal member and focus every aspect of keeping the customer in the center. Simply said, the customer is the boss! Not to forget while the store is 50%, delivery is equally important and takes about another 50% nowadays.
From apocalypse to relevance
Peterson was the speaker of the year during “The Big Show” in New York in January and has about 30 years of experience as a retailer, strategist, and speaker. His innovative approaches to modern retail and strong expertise in cultural trends are his specialty.
It was pointed out that retail closures were more than openings in the USA and the sole reason was shoppers were looking for more facilities than just shopping. Whilst shopping, they looked for eating spots and food halls are a great technique. They also look into children’s play areas, fitness centers, green spaces to relax, farmers’ markets, places to buy household items and other facilities. For example, farmers’ markets have 3985 in 2014 to 9027 in 2019 as buying fresh fruits and vegetables has increased over the years and a consumer on average spends about $16 per visit.
Therefore, many shoppers looked for an all-in-one place to get all that they need. Therefore, incorporating this concept shows that shopping is not dead yet, but rather the way shopping is done must be changed. This is where BOPIS and BORIS become two famous traditions that are followed these days for customer convenience.
BOPIS and BORIS
Unlike earlier days, people are less patient and expect instant gratification. Thus, BOPIS is very useful for people who are stuck in workplaces or traffic and do not really have the time to choose items in shops. Through this, they get the option of choosing the goods they need online and picking it up on the store. This saves time for people with busy schedules to smoothen their shopping. On the other hand, when customers pick their goods, 75% of them also purchase additional items while in-store.
Looking at the near future, the use of technology will be more heavily incorporated into shopping. For example, having 3-D views of products and being able to visually shop their stores and getting it delivered.
This is another option where you could buy online and get it delivered. However, if you want to exchange or return to a physical store, you can do so. So the hassle of return shopping is eliminated and is a convenient service. The benefit of it is that when customers visit the store to return goods, there is a high chance that they might exchange or even buy additional goods.
But these innovations won’t mean it is the end of shopping centers because having physical stores gives delight to people which virtual stores cannot give. People like to touch, feel or smell which online stores cannot give because those sensations can induce spontaneous purchases.
The line between physical stores and online stores will get thinner and thinner day by day and a new concept will come known as a physical store which will create a fluid web-to-store system with a smooth customer experience. Therefore, many different methods will be used with different approaches to reach different audiences.
How to create total seamlessness between the web and the store?
As Hauk Landsverk, Digital Director of Elkjøp expressed, to create a seamless integration between web and physical store is through these omnichannel approaches like BOPIS and BORIS to create a link between physical stores and mobile, telephone or computer devices. Through these, customers will enjoy the benefits of technology which will simultaneously cater to their needs as well. It will be customer-centric rather than product-centric where it is based on the customer’s journey and experience which is a fundamental factor.
It speeds off the web
Siv Heleen Grødem, entrepreneur and owner of the Suser i Sivet highlights certain strategies to enhance the shopping experience such as instead of selling individual clothes, you sell a full costume. Apart from that other factors like social media promotions by stores, online presence and personal services like cash on delivery are a few aspects that also enhance the shopping experience.
Suser i Sivet also won the prestigeous award for retailer of the year: “The winner is the result of hard and planned work over many years, a willingness to invest and dare to try out new things and excellent marketing in social media. The result is a modern, forward-thinking business that masters the demanding art of combining online sales and physical store in an excellent way.”
Different industries, same customer – how to meet future customer needs
Ingjerd Blekeli Spiten, Executive Vice President of PersonMarked highlights modern payment options like mobile banking and paying online as new developments that make purchasing more easier and convenient. Most banks and online payment gateways are trustworthy and reliable where almost 90% of people trust their banks and 20% of the people trust global payment systems like PayPal. There are few others as well that rely on social media payments, IT companies or mobile companies.
Keeping up with the consumers – how Zalando aims to become the starting point for fashion
David Hejgaard, Regional Lead Nordics of Zalando reflects on Moore’s law stating evolution is much faster than ever where customers tend to shop anywhere at any time of the day. Most physical stores have partnered with virtual stores where people can choose the color and size of what they need. If this is available in the virtual warehouse, they can purchase it.
How to prepare for a different future?
Truls Fjeldstad, Director of marketing and business intelligence at NorgesGruppen is a charismatic guy who mainly focuses on sustainability. He believes that classical stores where you pick and pay will continue to exist and never halt. Thus, to prepare for this, new features and services must be introduced to support the traditional brick and mortar stores. These include personal assistants, IoT, automation, and delivery as well.
How to leverage customer data and not just collect it?
Anton Nytorp, Head of CoopX at Coop Norway is a firm believer in heat mapping. This is a great technique to understand customer’s purchasing behaviors in the store. These analytics show actions and what your customers usually like. It is a good way to record data in a way that can be interpreted rather than just merely collecting it.
Furthermore, placing similar products of different vendors is another great technique so consumers have many options to choose from if they don’t like a particular product type or brand. This also shows and helps identify which products are more likely to be bought. Having an unmanned- store in Norway is also on the bucket list as it will show what customers actually want and not forced or induced to buy sales representatives.
Symbolic consumption and self-concept
Siv Skard, Associate Professor at Kristiania University College researches consumer behavior. She highlights that people are always concerned about how others look at them and judge them. This is a great point that can be taken advantage of from a business perspective. People are self-centered and if they notice that they are being watched, you can promote concepts like ‘go green’ or ‘go healthy’ which people tend to buy.
How to create results online from the first click?
Rune Kjeldsen, General Manager at “Hekta på Tur” began his first business at the age of 22 which was sold to a Dutch company. He then began an online store called Hekta Pa Tur which has steady and stable growth. Today it is a leading profitable store.
Thus the moral of the story is when the wind of change blows, you must build a windmill if you’re a winner because losers will build wind-shields instead.
The customer experience is what will differentiate you from the competitors in the future.
Always keep in mind that customer experience is far more important than having a good customer service system. Thus, to ensure smooth and efficient customer experience, it is necessary to indulge in profitable and sustainable business models inclusive of Omni channels like BOPIS and BORIS. These strategies are what gives customers a better overall experience.
Sveinung Jørgensen, Associate Professor at INN and Lars Jacob Tynes Pedersen, Associate Professor at NHH research on sustainable and profitable business models working closely with Norwegian and international companies. They have published a book together called ‘RESTART 7 Roads for Sustainable Business Models’. You can read more about them at www.JorgensenPedersen.no.
There are a few ways to enhance the customer experience. You can Redesign the business model and approach focusing on a customer-centric fashion model as it is important to see through the customer’s eyes.
Controlled experiments is another process of understanding customers and to see their issues beforehand. You can see the usability of the products, how well people can use and their overall experience and impression of the particular product or service.
Another method is Circular processes whichare usually adapted by product-oriented companies who have sought ways to give in a service and benefit from it. For example, you purchase a washing machine and pay in a cycle whereas the manufacturer will ensure that it works properly and service it when needed. Service logic is quite similar to a circular process and is relatively new which focuses on exchanging services than just goods.
Alliances are equally important to engage with your customers and communicate with them throughout their shopping journey. You can get information such as feedback, their experiences. Knowing these you can adapt means to ensure customer’s expectations are met. Another important aspect is Results that are obtained by different analysis will help you identify loopholes and fix any issues to enhance the overall customer experience. The three dimensions of customer experience are segregated into three elements. The first is a success where the customer is able to get what he/she requires and also see if the interaction was successful or not. An effort is analyzed to see how much effort the customer had to personally put to get a successful interaction. Lastly, emotion is whether the overall interaction left the customer delighted or disappointed.
The changeover process in the green shift
Anita Sørlundsengen, Retail Director and Øyvind Andreassen, Senior Region Manager at ST1 Norway highlights the importance of the green shift in the modern century. Gas stations have now transformed into energy stations with new concepts constantly developing. See how ST1 / Shell at retail director Anita Sørlundsengen and retailer Thommas Landsem have created the energy station of the future with special emphasis on good customer experiences.
From market leader to challenger
Lars Kristian Lindberg, CEO / Managing Director at Gresvig emphasized that Gresvig was in need of a change or an advancement from a strong national brand to a more profitable international brand. Ole Sauar, Founder and CEO of Jollyroom stated that social media and influencers are a great method to grow your business in an international platform. Also having playing zones is another key idea.
Also keep in mind that nordic countries who balance between socialism and capitalism have better economic efficiency and growth and thus, investors must carefully consider this aspect as well.
The key is to hit the emotional muscle
Sondre Gravir, CEO of the SATS group which is a leading fitness center chain in the Nordic region highlights that rather than focussing on getting in participants to the gym, the focus must be on getting the customer to the gym.
New business models
Emilie Stordalen, daughter of Peter Stordalen and part owner at Strawberry Group is a charismatic and down-to-earth personality. She currently works to develop and operate digital platforms. The specialty about her is that she focuses on individual people such as Amanda, who is young and modern to Anders, who is a bit aged and classical which gives a more personalized experience to customers.
Another strategy used is that they tend to use low-quality locations such as basement rooms and give high-quality experiences like LED walls where you feel like you have woken up in a rainforest. These minute details are very important to create a positive image about your services or goods to the customers.
Earlier this year, I visited US for a couple of weeks, and having a genuine interest in retail technology, I visited quite a few retail stores. I went to see classical stores, but also had the chance to have a preview of the future of retail: Autonomous and Frictionless Stores!
Customers in this digital world don’t want to spend too much time while shopping. They want everything to happen very fast. Customers are looking for a seamless shopping experience all the time. That’s how the concept of frictionless stores came to exist. Frictionless stores are one the biggest new thing in consumer shopping.
What are Frictionless Stores
The concept of frictionless stores started a few years ago. When I talk to retailers this is one of the topics that always pops up. All major brands are looking for innovative ways to create better customer experience and frictionless stores is one way to make that happen. These store improves the shopping experience to the point where customers don’t have to wait at any point of shopping such as selecting, receiving and paying for the product. Initially frictionless stores only confined to ease and less hassle shopping. But as innovations such as mobile wallets, digital receipts, free and fast shipping, and one-click purchasing emerged and began to reshape the consumer shopping experience, the definition began to be reshaped as well. Today, a frictionless experience means more than just less hassle. It means greater speed, personalization, and wow experiences.
How Frictionless Stores work
Let’s try to understand ow frictionless stores work. In frictionless stores, Buyers and sellers are connected in a way that provides buyers the ability to instantly find, compare and buy products and services they need. In frictionless stores, customers should feel that they have full control. The concept and technology has evolved over time, and nowadays customers expect to have this experience through their smartphones. Retailers and brands are trying to find new ways modifying the definition of frictionless stores to provide customers the best possible shopping experience. They need that commitment to stay ahead of the competition. As a result of that, nowadays, frictionless shopping means eliminating anything that negatively impacts customer experience.
Importance of Frictionless Stores
How has frictionless shopping fared according to researches? Alliance Datacenter has done a study and found out that customers from all generations looking for a great service and an ideal shopping experience. This is true for all the areas in the world. If some brand fails to deliver what they want, customers will find a different one. According to the research, 76 percent of consumers said they give brands only two to three times before they stop shopping with them. Another 43 percent said their main reason to leave a brand is poor experience in shopping. What all these means is that if a customer encounters friction they will run away from that brand fast without probably giving a second chance.
Amazon Go Stores
Similar to frictionless stores, Amazon introduced Amazon Go stores. What is special about Amazon Go is you don’t have to wait for checkouts. That basically means you no longer have to wait in queues. First Amazon Go store was a grocery store of 1800 square feet. It spread fast, in fact, you can see a lot of Amazon Go stores now in the USA and Europe.
How is this even possible? What technologies have they used? Amazon was doing many types of research in the areas of computer vision, sensor fusion, and deep learning. Amazon Go is a fruitful result of that. You need Amazon Go application to do shopping with Amazon Go stores. All you have to do open your Go app, choose the product you want, buy it and the just leave. This application can detect when a product is purchased or returned to the shop. The application can remember what you bought and you can revisit these details at your virtual cart. When you finish shopping, you will be charged and you will receive a receipt for what you buy
Buy Awesome foods with Amazon Go stores
You may wonder now what you can buy there? What items are available on Amazon Go stores? I will just point out how one Amazon Go store had marketed their shop. “We offer all the delicious meals for breakfast, lunch or dinner. We have many fresh snack options made every day by our chefs at our local kitchens and bakeries. You can buy a range of grocery items from milk and locally made chocolates to staples like bread and artisan cheeses. Try us, you will find well-known brands you love in our shops.” by the way, don’t expect to go in there and buy books, tech or clothes or anything else that Amazon sells online. It’s basically quick-and-easy food and other groceries. It’s just that there’s no cashier.
So many people have been attracted to Amazon Go stores so it is quite evident that this concept will make a huge impact on the future of retail stores.
If you want to know more about frictionless Sstores, feel free to contact me at: firstname.lastname@example.org or check out these related articles:
I had a great opportunity to visit London during the weekend, to experience the luxury fashion industry first hand. Whether you want to spend big or just browse, London is a luxury shopper’s paradise, offering everything a discerning buyer could possibly want.
In my opinion luxury brands have been doing so well based on their capacity to react to social patterns. They have figured out how to submerge themselves into the culture and give new dimensions of access that, while retaining their validness and originality, to make their brands increasingly alluring to more clients.
As a result, Luxury brands are increasing their revenue and results, and I think that this is very much due to their focus on the customer experience. They tend to be very commited to every product they put out, as well as being conscious of how the customers react to the product. Best in class are of course Gucci and Louis Vuitton that are among the fastest developing brands on the planet, with the extravagance design and their product developing by 42 percent since 2017.
Not surprisingly, most luxury brands are performing great in a rundown of 100 companies that includes technology, retail products, cars, and financial enterprises.
Gucci’s brands are of course the fastest rising of any luxury style name on the rundown list, with up to 30 percent to $12.9 billion, while Louis Vuitton, grew 23 percent to $28.2 billion. The nine luxury brands on the list had a joint brand estimation of $105.8 billion and include other top brands including Hermes, Tiffany, and Co, Dior, and Burberry.
Louis Vuitton – $28.6 billion.
Chanel – $20 billion.
Hermes – $16.4 billion.
Gucci – $12.9 billion.
Cartier – $7.7 billion.
Tiffany – $5.6 billion.
Dior – $5.2 billion.
Burberry – $5 billion.
The global apparel market which does not include shoes and jewelry is worth $1.34 trillion a year in retail sales. Of this, a staggering $300 billion are luxury and premium brands.
How Did Luxury Brands Come This Far?
Building a fruitful business system infers the comprehension of how things are going to change over the span of time. The fate of retail is characterized by the most encouraging patterns we are watching today and is custom-made to the requirements of various gatherings of customers. The organizations which need to prevail in retail in 2030, ought to arrange their business procedures and specialized modernization remembering such significant thoughts as accentuating customers review and experience, guaranteeing flexibility for different target audiences, giving consideration, and remaining cognizant.
Luxury industries have proven to be ahead of all others in all of the aforementioned aspect, and that is one of the many reasons that they do so well. The society is winding up more to be more fashion conscious and its relation to an eco-friendly environment, and everyone is looking at ways to innovate fashion-wise. Consider, for instance, a luxury design brand Elvis and Kresse. The business began as an endeavor to handle a ten-million-ton of Leather scraps which should be discarded in London every year. Presently the organization delivers a full scope of calfskin from what recently was covered in the ground.
Purchasing a luxury item, being a Lois Vuitton NéoNoé bag or a Rolex Perlmutter is also viewed not only buying a bag and a watch – it is a feeling, an experience and a rush. Building on this rush is sharing the experience with Instagram followers, and this, in a nutshell, is how much value these brands have. Dopamine and oxytocin give the shoppers a rush all through the shopping experience.
This is particularly apparent when you are shopping, and you see something that you like (a dose of oxytocin is delivered to your bloodstream) and you get excited about it (a dose of dopamine is delivered to your bloodstream). Hence why these hormones are referred to as “happy hormones”.
Going to the store, you may not have planned to shop for anything at that moment or maybe you were planning on getting something else, but because your body is full these hormones, you end up buying it. This is what people generally call an impulse buy. This is also true when it comes to social media. You could be just browsing through your social media, and you may see something that attracts your attention at once, and then you get excited and feel the urge to find out more about that person, or place or thing. This is the reason why, even though you visit your social media platforms with the intention of just checking in, you end up spending hours on end on that platform at times.
I have to say, going to the Tiffany & Co store at Harrods, you get the celebrity attention and a great feeling just browsing through all their fantastic jewelery. Buying the same piece online or in a common store does not give you the same rush.
Transformation and Progress in The Industry.
The Luxury merchandise industry has faced a number of changes in the course of the last two decades. Right now, fluctuating economic patterns, advanced digital scope and developing customer choices and tastes are making another competitive scene in the industry such that conventional methodologies are under danger. All things being equal, development in the luxury merchandise industry will proceed. However, to come up to a consistent and strong rate of offers development, luxury companies need to look up to new difficulties and manage them ineffectively.
There have been situations of incorporation between two companies or more, like Recently Michael Kors acquired Versace at the last quarter 2018 and Jimmy Choo in 2017, moving them up on the ladder of luxury brands. Keeping Versace chief executive Jonathan Akeroyd and creative director Donatella Versace on is of course extremely important to not devaluate the Versace brand. Such is the manner of competition that is experienced in the luxury industry today.
Ideally, the retailers wants to be focused on shoppers and their shopping journey and behaviors first, and then focus on staff and their activity separately. I am sure that the future retailers has a lot to gain by technologies like IoT, business intelligence (and even artificial intelligence and machine learning) and analysis when multiple data streams interact, for how long, and how they are related to purchase patterns and other performance metrics.
The future achievement of the business will also rely upon its achievement in penetrating and proactively connecting with the more youthful age. Luxury brands have in the past been known to restrict and separate themselves from clients. But compared to the state of things today, they now make use of social media and online networking. Luxury brands now see web-based life as “mass advertise”, yet today it has turned into an undeniably imperative advertising tool for them.
Burberry is an amazing example of a luxury brand that utilized the power and impact of internet-based life. The brand commits around 60 percent of its advertising spending plan to computerized stages, connecting with clients on Facebook, Twitter, Tumblr, Pinterest, Instagram, and YouTube. Recently Louis Vuitton also started tagging their Instagram posts with the models private Instagram profiles, making the relationship between the customer, the brand and the model even more intimate.
After a great weekend I feel very confident about the future for both the luxury, premium and the regular fashion brands. I am sure that with the right approach the physical stores has great advantages and will also be vital for transitioning from on-prem via omnichannel to phygital.
If you are interested in hearing more about the future of fashion retail and IoT, feel free to contact me at email@example.com 🙂
My third day at NRF Expo’2019 was devoted to the future of retail. With all innovations, what can we expect from commerce in some 10 years? Ask the futurist – and you will get the picture of the smiling robot knocking at your door to hand in a perfect-fit suit you virtually tried on halfway around the world a day before.
But though there is nothing impossible in this alternative, should the businesses rely on it while developing plans and building strategies? Does it reflect the needs of customers and their most desperate desires? Here we come back to the thesis you could repeatedly hear from different speakers at NRF Expo’2019: modern commerce is not an art, it is a science based on a deep and profound analysis of data. Want to be successful tomorrow? Study the trends and search for vacant niches today. For these are clients’ expectations that shape the future. And only those novelties are worth efforts which enhance customer loyalty.
With this in mind, here are the four magic words from the NRF wizards you need to remember and repeat as a spell while building your business strategy:
Let’s see how the future of retail is to be built on these cornerstones.
Shops of the Future will Sell Experience, Not Products
It is hard to impress anybody with the assortment these days. Goods are available as simply as never before and new products are launched every day. This stimulates advanced retailers to bet on experience more than on products. Customers prefer things that either have a story behind, or create a special lifestyle, or highlight their individuality. Expert state that shops of the future will become more like places where retailers will build relationships with the shoppers creating opportunities for people to connect with the product.
Rather than just visiting the store to buy and leave, people want to be entertained and amused, to have some kind of social experience. This reminded me of Apple’s recent “town square” store concept: a place for shoppers where they can meet friends, have fun, and try new gadgets. Another fascinating example is The Dreamery by Casper, the place where you can book a nap session (during which you will actually try out a new mattress and maybe even decide to buy it). Such shops set a trend which has already got the name of “retailtainment”.
And here we come to the second variable which will define the future of retail in the forthcoming decades: convenience.
Customers Will Favor Retailers Who Will Offer More Convenience
The focus of reports of FIS, Excentus, and Shell representatives at NRF Expo was on enhancing brand loyalty while providing more convenience for the customers. This includes improved payment, flawless and consistent service, and better personalization.
Technologies like POS systems, beacons, image and voice recognition, AI, and AR already make shopping more user-friendly. Amazon Go replaces checkouts with AI-driven Just Walk Out technology. It allows making all payments in the store using Amazon account. Another nice recent example is IKEA’s new app that leverages Apple’s ARKit. With it, users can preview how the items from IKEA shop will fit in their accommodation.
And the line between real and virtual shopping experiences will become thinner and thinner. Most experts agree that, on contrast to previous forecasts, brick-and-mortar stores will not totally disappear. Though most of them will face great transformations turning into what is called a phygital store – that is, a combination of physical and digital space and developing a fluid web-to-store customer experience. The others will become more of a showroom or switch to BOPIS model. What should be taken into account is that different segments of the target audience need different approaches to service modernization.
New Niches Will Be Occupied by Those Who Consider Inclusion
The constant challenge for the businesses is finding new market niches. One of the solutions proposed at NRF Expo was considering the groups which have been long staying in the shadow. Thus, Microsoft has started to pay special attention to disabled customers making services more accessible and convenient for people with disabilities. In his report, the company CMO Chris Capossela gave an example of how valuing inclusion and diversity can become a part of a brand strategy. Microsoft’s new Xbox controller is designed entirely for players with mobility impairments.
But the disabled are not the only group still waiting for more attention from the retailers. Think of ethnic minorities and, not surprisingly, women.
Statistics says women drive 70 to 80% of all consumer purchases. That is because they often buy on behalf of other categories, including children, elderly parents, and even husbands. Recently, women’s buying power has surpassed men’s. So, by prioritizing female segment, companies can win a lot. Want inspiration? Study the case of Soda Says, a retail brand selling smart tech to women, or making their life teccessible, as the company’s slogan says. Their data-driven approach to the study of true needs and preferences of female consumers shows it’s not just about coloring everything pink.
In terms of ethnicity, Asian-Americans represent a fast-growing buying power, especially in housing, public transportation, and education. Understanding in what categories this segment of customers is ready to spend more can give insights on how the companies can work more effectively to occupy this niche.
Environment Consciousness: The Everlasting Fashion
As society is becoming more environmentally conscious, the circular economy is gaining ground as another promising trend in retail. Progressive companies receive popularity by supporting environmental sustainability, and not necessarily with the cost. Consider, for example, a luxury fashion brand Elvis & Kresse. The business started as an attempt to tackle a ten-million-ton-problem of leather scraps which need to be disposed of in London annually. Now the company produces a full range of leather accessories from what previously was buried in the ground.
Other companies, like Starbucks or Best Buy, set on to reduce packaging or even build eco-friendly stores. This includes energy-efficient lighting and water consumption, using solar and wind power, and recycled and low-carbon-emitting construction materials.
Can technologies help retailers to become greener? Sure. Consider, for example, the use of IoT. This technology is already gaining ground in agriculture where it helps to reduce the number of pesticide fertilizers and so on. In retail, the use of sensors can reduce energy costs (due to more efficient lighting and temperature regulation, for example), enhance supply chain management, and help the customers make healthier and greener choices when shopping.
Let’s Sum Up:
Building a successful business strategy implies the understanding of how things are going to change in the course of time. The future of retail is defined by the most promising trends we are observing today and is tailored to the needs of different groups of customers. As it was shown at NRF Expo’2019, the companies which want to succeed in retail in 2030, should organize their business processes and technical modernization keeping in mind such crucial ideas as emphasizing customer experience, ensuring convenience of services for various target groups, providing inclusion, and staying environmentally conscious.
Hope the presented ideas and tactical trends will be useful for you and will help you to chart the course for your business. Stay prosperous and flourishing!
The second day of NRF Expo’2019 was devoted to the changes the retail industry is facing these days and the novelties we are to expect in the nearest future. Brilliant speakers, including John Zavada from PETCO, Glenn Shoosmith from BookingBug, Phil Thompson form AWS, Linda Bustos from Skava, and others, shared their vision on how and why introduce innovation into the company’s processes.
Their main message was: while everybody is talking about digitization, automation, ML, boundless stores, and omnichanelling, human interaction is still of the top priority for it causes and shapes all the changes.
Why Take Online Disruption Seriously
Few people today would object to the necessity of introducing technical innovations. At the same time, few as well understand that this implies a significant rethinking of cost components and budgets. As was mentioned by Sebastian Grady, president and COO of Rimini Street, today companies are still spending up to 90 % of their IT budgets on operating expenses, maintenance and support just “to keep the lights on”.
So, while everybody is talking about innovation, it seems that quite often, businesses don’t take it seriously enough – and put themselves at risk. For keeping up technologically not just allows your business to stay competitive among other companies in your sector – it is if but the only way to retain customers who are aware of and willing to use new technologies.
Meet the Customers on Their Terms
Reducing friction points for consumers and serving for their convenience are the main reasons for digitization and automation in retail in today’s competitive environment.
Developing so-called boundless stores and omnichannel integration are the two strategies which experts recommend to pay attention to in 2019. Improving logistics (like same-day delivery or easy return) and strong reliance on data are the other things to keep in mind.
Though, accent on digital channels does not mean physical stores are to lose their relevance. People are still attracted to in-store visits and purchasing. People are attracted to brick-and-mortar stores by the social pleasure of personal experiences, human interaction and communication – that human touch which can’t be replaced by machines. Reimagining store functions supercharging staff with insights for better service were in the focus of the session by Glenn Shoosmith, CEO and Founder of BookingBug. Skilled, well-informed and enthusiastic staff empowered with digital support ensures clients get those exceptional experiences that encourage them to become return customers, the speaker stressed.
But what can be the trade in question? Many business owners are reluctant to innovations because of the expected costs. So, is it really necessary to invest huge sums into the development in order to bring digitization to your retail business?
Don’t Reinvent the Wheel
Though custom development has a lot of advantages, it is not necessary to address it any time you want to introduce IT innovations into your processes. Many services are available today from AWS, Microsoft Azure, Google Cloud, and IBM Watson as ready-made units. Such big technology providers have more capacities and years of experience in the development of IT products, and cloud technologies make their implementation and maintenance rather easy and convenient.
For example, Phil Thompson, industry CTO from AWS Retail team, introduced possibilities provided to retailers by AWS – and the list is impressive, indeed, including IoT, AI, and machine learning, all promising to ensure 50% greater forecast accuracy and store productivity.
The statistics speaks for itself: 36% of retailers are considering introducing digitization and automation into their businesses in 2019. So, don’t miss the opportunity to stay competitive, join forces with fellow retailers, partner up with vendors and remember: where there is a wish, there is always a way!
With this article, I am starting a series of reports inspired by visiting NRF 2019 retail’s big show which took place on January 13-15th in NYC. As noted by the organizers, NRF is the world’s largest retail conference and expo which gathers the biggest retail players from 99 countries. So, it is a splendid opportunity to learn about trends and innovations, find new partners and clear out prospects.
My first day was majorly devoted to deepening into the transformations small retailers are facing today with the increasing impact of digitization. While everybody’s eyes are justly turned to the marvels of such erupted online giants as Amazon, Alibaba or eBay, do so-called mom and pop stores really stand a chance to survive in this brave new digital world? Here are some insights from the leaders of the industry.
Can Mom and Pop Shops Stay on a Roll?
Mom and pop stores are small, mostly family-run businesses with a small amount of business volume and single location. Most of them are struggling hard today to stand up to large international retailers. But the experts promise the situation can be improved due to technical innovations and improvements in customer experience.
Being not burdened by large operating expenses, staffing, and warehousing, small stores have more chances to benefit from flexibility and clear customer focus. On the contrast to multivendor marketplaces, they can succeed in a vertical dimension, that is, in exploiting narrow, really specialized niches and competently addressing their target audience. But most important, it is easier for them to develop and maintain relevant corporate culture and staff involvement.
Next Step to Staff Efficiency
There is a close link between the customer experience and employee experience, states Jami Blake, a voice of customer director in Tiffany & Co. Today’s customers differ considerably from the previous generations. They have much more knowledge about the product yet before they enter your store – and expect a consultant not just provide adequate and detailed information (which itself demands from employees to be better informed and enthusiastic). What is more important is the message the company beams, the narrative behind the product, the inspiration it brings to people’s lives. To be competitive, modern companies want (and need) to be the part of customers’ lives.
But to inspire clients and to deliver the company’s promise properly, employees need to be inspired first. Here are some recommendations from the members of the senior executive panel discussion on how to drive enterprise profit and performance. The participants included executives with 50+ year experience in retail from such companies as Finish Line, Shopko, Macy’s, and Chico’s. The following statements from their discussion drew my attention:
do forget about multitasking, instead, keep all members of your staff concentrated on one task and delivering one message,
keep in mind the limitations of any technology, remember that technology should inspire your staff and make work easier, not become a burden,
encourage employees to ask questions and keep them involved,
create success stories not only for customers but for employees,
and, what is most important, while introducing any innovations into the processes, remember that any changes take time and avoid staff’s fatigue.
To make a long story short, educate your staff, create corporate culture and connections and remember that staff dissatisfaction may cost too much since most often, it leads to customer dissatisfaction.
One of the ways to unburden your employees and though strange it may sound, to enhance customer loyalty is to shift more responsibility in the process of decision making and purchase on clients. Modern technologies make it simple and easy and it is a great opportunity for both big and small businesses.
We all live half-virtual life today staying connected most of the time. According to forecasts, each household is believed to have up to 50 connected devices by 2020, and mobile commerce is to capture 49% of online retail sales by that time reaching from $ 250 to $ 300 billion in transaction. Even today, companies which wisely use mobile apps are one step ahead of their competitors.
Turning your eyes on mobile technologies allows you to reach your customers where and when THEY want to shop. It encourages purchases through quicker and easier access to information about the product. It gives your customers more power and brings them into decision-making. It delights them through more personalized and seamless experiences. And it makes your employees less burdened.
Try It Online: State-of-the-Art Demos and Showrooms
Another perk modern technologies bring into commerce is opportunities offered by virtual and augmented reality. Even today, using headsets or other applicable technology, users can try on items and see holograms or 3-D views of the products. In the future, people will be able to visually shop in their local mom and pop store using VR or AR and have orders delivered to them.
Does it mean that traditional brick-and-mortar stores will sink into oblivion? Most likely, not, since there is a kind of the shopper’s delight no virtual store can give – that of keeping a thing in hands, touching it, feeling its smell – you know, all those sensations which induce us to spontaneous purchases. But it is quite predictable that most of the shops of the future will need to turn to BOPIS (Buy Online, Pick up in Store) concept. No wonder one of the panels of this year NRF conference was totally devoted to the future of the BOPIS model.
What small retailers should take into account first and foremost when intending to introduce this model into their business? Remember that to start BOPIS, you need to have full control of your inventory. Your store is expected to have agility and ability to act rapidly. Do think of autonomous supply chain. And remember that no matter what model you choose, a scientific, data-driven approach is a must-have for commerce today.
Conclusion: Modernized, not Historized
To survive in a modern competitive world, the company does not necessarily need to be a big conglomerate like Amazon or eBay. Small mom and pop stores have all chances to stay afloat and even prosper provided they benefit from modern technologies and innovative marketing strategies, such as developing in narrow specialized niches, staff optimization and education, creating a strong company culture, encouraging customer involvement, and store decentralization.
The digital transformation and customers’ new behaviors give you, as Retailers, both new opportunities and challenges.
On April 26th Gunnebo participated in the Microsoft Retail Inspiration Day where we spent an exciting day of focusing on retail. During the day, we explored the industry experience and inspired participants with solutions from Microsoft and partners to showcase new opportunities that the technology may imply.
I had the chance to listen it to some of the keynotes and found it very interesting. Focus og the day was to share insights about retailing, with practical demonstrations, Microsofts own and partners (Gunnebo GBS being one) solutions:
Engage Your Customers – Here we will look at solutions for creating a personalized and relevant customer experience throughout the purchase and all channels.
Strengthen your employees – How can your employees be better informed, become more productive to provide better and more personalized service to your customers.
Intelligent Processes – How can data help ensure the right products are in the right place at the right time and create intelligent business processes.
Of course we attended with our container, showing how making your store more efficient is the key to being a more competitive business. By becoming a connected store, the retailer not only simplify their operations, but you also improve the customer experience and increase security.
Gunnebo Retail Solutions is a software service that connects all your store’s technical and administrative support systems onto one open platform, accessible anytime and anywhere. The system automates manual processes, and via an easy-to-use app, real-time information is transmitted from store systems to the shop floor for an overview of daily operations.
Get a quick overview of your business using the dashboard. Actionable data like conversion rate, is easily accessible anytime, anywhere, so you can make quick and business-aligned decisions.
The right staff at the right time in the right place. Not as easy as it sounds. Gunnebo Retail Solutions interacts with all your store’s systems to make sure everything runs smoothly. If something needs actioning, the software will let the appropriate member of staff know before it becomes an issue. Over time the software can also help you plan your resources according to historical data and upcoming events.
Limit manual checklists and breaches of communication, and ensure that tasks are executed on time by the right member of staff. Create tasks on the spot from the shop floor or set daily tasks according to your store policy. Tasks can be assigned to a group as well as an individual, and with a tick in the box you know the task has been completed.
Gunnebo Retail Solutions enables you to run your business smoothly. By separating the store day into phases – such as, pre-open, open, post-open and closed – you can automate processes by phase.
For example, when the store enters pre-open mode the lights are 70% strength and no music is played. Once the store enters open mode the music starts to play and light strength is at maximum. Staff will also be automatically directed to those areas where there are most customers.
Certain stages can also be connected to security rules, such as making the back office accessible during pre-open and post-open only.
Visitor Management & Follow-Up
Monitor visits to your stores and stay on top of who is onsite. By tracking your suppliers’ arrival and departure times, the accumulated time spent on the premises can be compared with received invoices. Self-registration at a touch screen means staff do not have to manage visitors and can focus their attention on the customers