Despite retail sales hitting a record $6 trillion in 2018 (outperforming the 2007 pre-recession high of $4.4 trillion), certain trends, like store closures, are continuing to rise. For example, a staggering 5,994 stores closed in the first three months of 2019, exceeding the 5,864 that closed over the entire course of 2018. Two key shifts taking place in retail are inextricably linked: The first is technology; the second is consumer behavior. This is creating a chasm between those who are thriving and those who are, to put it simply, not thriving at all.
So how are retailers responding to this new paradigm and addressing their most pressing challenges? ICF Next got a glimpse what’s top of mind for some of the best-known and well-loved brands as hundreds of retailers from around the world congregated earlier this month for another annual Customer Relationship Marketing Conference (CRMC).
It’s abundantly clear that the retailers getting it right are elevating the parts of the customer journey that reinforce their brand promise across technology, data, and authentic and meaningful exchanges. The seemingly opposing convergence of data and emotion is fertile ground for 1:1 marketers. Paired with the technologies that enable these experiences, the future of retail looks as bright as it does uncertain.
Marketers are at data war
Data can strike at any time. Data does not sleep. And if you’re not careful, data can paralyze, even jeopardize, your very best attempts at engaging your customers through relevant and meaningful interactions. Perhaps a bit dramatic, sure, but the point is that the sheer volume of customer data that brands and marketers are dealing with these days presents an interesting, yet exciting, challenge for loyalty and CRM practitioners. Aggregating and making sense of multiple data sets from disparate channels and touch-points is an absolutely massive undertaking for any organization.
What’s more, translating this constant flow of information to truly relevant and real-time customer experiences requires increasingly complex methods and technology. Optimizing and testing analytical models that can drive positive results at the customer, segment or campaign level in real time can be difficult to implement. ICF Next’s proprietary modeling engine was built specifically to help deliver these experiences while providing incremental lift in revenue at the same time.
Programs are passé
Rarely will you hear the word “program” uttered by Loyalty and CRM marketers these days. This isn’t to say loyalty or customer marketing programs are dead—quite the contrary; they are stronger and more valuable than ever. It’s more of a reflection of the pressure brands are feeling today to elevate their loyalty programs and enhance the customer experience.
The direct correlation between the advancement of analytics and troves of customer data, and the exceedingly demanding consumer expectations on the individual level is more prominent than ever today. Consumers understand that brands and marketers are collecting data on their behaviors, transactions, preferences, channels, browsing and mobile activity, and as such they expect the value exchange agreement to be fulfilled. Status quo experiences are not enough, and reactive communications do not foster long-term advocacy. Customers demand that brands truly know them and engage with them in human terms and in proactive ways. The challenge for marketers today is bringing those authentic and relevant interactions to life—at scale—in meaningful ways.
Technology will soon change retail. And us.
We recently heard from the editor-in-chief of Wired Magazine, Nicholas Thompson, about seven changes in technology that matter in retail. Starting out with a crowd pleaser, he argued that artificial intelligence was not going to suddenly take over our world (at least not yet), laying out the case that while AI is advanced for some things—facial recognition and creating fake dog pictures through machine learning (yes, fake dog pictures)—there are many areas where AI simply cannot compete with humans. Specifically, baby humans, illustrated by a video of a 1-year-old solving a problem that a robot could not, like the simple task of opening a two-cupboard door in order to store a large item. Cute.
One of the more interesting points Nicholas made was that we are only beginning to see the effects of how transportation is going to change the cities of the future, and the impact this will have on consumption behaviors. For example, the rise of self-driving vehicles will lead to the elimination of gas stations (where 50 percent of all U.S. junk food is purchased). It will also mean parking lots and other city real estate are rendered obsolete, and people will likely commute longer to work and live further outside of urban areas. These changes will all drastically impact where and how we shop.
But perhaps the creepiest example of technology that will change retail—which Nicholas admittedly said could or could not become a reality soon—is the concept of what he called a “mirror world”: a world in which everything will have a digital twin. An IoT digital map of the world will serve as the new internet of the future. Whether or not these trends become new realities, one thing is very clear: We are screaming toward a future that will not only impact the way we consume, but also the way we live. Don’t worry though, there’s still time for some good ol’ fashioned retail therapy.
