Emergence of the Smart Shopper
The retail shopper of today is increasingly a “smart” purchaser. These tech-savvy consumers expect abundant and transparent information about product offerings. They look for an interactive experience as well as speed of execution once a purchase decision has been made. Amazon, with its convenience to shoppers, has created a “check at Amazon first” trend. Often, Amazon is able to convert the checking out of an item into a check-out!
Disruption of traditional business models
IoT is certain to disrupt traditional retail models. With sensors enabling product manufacturers to get in closer contact with the end users, retailers and e-commerce sites may find themselves side-stepped as the holders of customer contact. With increasingly “smart” consumers looking for awesome experiences retailers will need to embed and leverage technology to meet their operational (margins) and marketing (brand) goals.
Technology to Deliver Shopping Experience
Retailers need to deliver a superior and consistent experience across all channels. Rather than the traditional method of spending large budgets hunting for influence and reach retailers need to review their marketing spend to create positive influence and impression on the “smart shoppers”. JWTIntelligence reports that 81% of American and British millennial adult value “experiences” more than material items. IoT related technologies are at the heart of the retail transformation – from the shopper-facing front end with personalized engagement to back-end fulfillment efficiency.
The engagement starts when the shopper indicates their intent to visit their favorite store. Retailers can interact with the shopper to provide parking assistance as well as recommending non-peak hours for a better shopping experience in addition to items / products of interest. When a shopper walks in to the store technologies such as iBeacons, interactive displays and smart mirrors can create proximity-based, personalized consumer interactions for digitally savvy consumers. Imagine receiving a personalized list of “items” texted to the smart phone as a shopper enters the store. Imagine shoppers asking and receiving expert feedback from their smart phone personal assistants!
Even for shoppers that do not visit the store, but prefer an online experience, offerings such as Amazon Dash are making it easy to order groceries using voice commands. Sports apparel companies can ship a new pair of shoes after a member of their shopper family has run 300+ miles in their shoes. They can even ship a box to enable donation of the old shoes to a charity of choice!
In addition to leveraging technology for exceptional customer service and personalized customer engagement, technologies such as RFID-enabled sensors on products, automated shelves and intelligent coolers can help retailers significantly improve their merchandizing and operational activities such as inventory and warehouse management, cold chain and perishable tracking, and automated lighting.
Big Data, Privacy, and Security
The growing number of connected devices – from smart shoppers to inventory tags - will result in huge data volumes. In addition, social media data from shoppers will add to that volume. Retailers will be swimming in data, but they need to have the technology to convert this data to information and insights – around consumers, their trends, and their preferences – which in turn can be converted to actions!
To enable these insights , retailers need to develop a strategy to not only store and secure large volumes of data, but also to enable advanced data analytics at both the local and enterprise level. Such capabilities help retailers understand past actions and predict future trends to engage shoppers with the right message at the right time in real time! These insights are powerful to optimize operations to carry the right inventory mix and plan supply chain activities.
Data privacy and security need to be considered from the very beginning. Security practices must be rigorous and plan to include edge devices in addition to core data on-premise or in the cloud. It is also important for retailers to be transparent about privacy policies. Clearly articulated policies explaining collection and use of personal data as well as data sharing are vital. Many millennial adults are comfortable with personal information sharing if they clearly see benefits for them. Opt-in programs can be linked to incentives such as loyalty rewards or exclusive offers that can help retailers engage 1:1 with their customers.
To move forward, everything must be about the shopper! Smart retailers will utilize IoT technology and big data insights to engage the anywhere, anytime smart shopper - in store or via their smart devices or - to meet and fulfill their expectations of convenience and shopping experience.
I for one am looking forward to my smart mirror telling me to go for a darker shade of pink lipstick to match my outfit!
