2016 Top 5 Retail Technology Trends
Retailers have spent the better part of the last decade on their heels, reacting to profound changes throughout all sectors of the industry. Rapidly advancing technology has reshaped consumer behavior and expectations, providing an opening for fast-moving, innovative competitors to enter the market. 2016 marks a turning point for retailers that have made consistent investments in digital strategies for marketing, operations, supply chain and other critical business areas.
These investments, coupled with the continuing evolution of technology, will allow retailers to make important strides toward supply chain transformation, more data-driven decision making and the ultimate goal of an omnichannel consumer experience.
Analytics Yield Actionable Intelligence
In 2015, retail digital marketing was focused on customer relationship management (CRM) analytics to learn more about consumer behavior, drive decisions about offerings and enable personalization across business channels.
The digital marketing team has learned from this experience, expanding its skills into what were formerly considered IT functions, including data-driven analysis. However, the team still looks to IT for enabling technology.
In 2016, retailers will transform analytical correlation into actionable intelligence – and get better information for making business decisions.
Retail businesses will be able to gather an ever-increasing and diverse amount of data relevant to their businesses, thanks to an explosion of readily available infrastructure for capturing and analyzing data. The solutions that take advantage of this new opportunity, delivered as a service through secure clouds, will come with a lower cost of entry but offer higher availability and greater flexibility of storage, network and platform options.
Bottom line: Analytics platforms can be readily available in minutes instead of hours, days or weeks. Retailers who embrace this new model will attract the data analytics and engineering professionals who can transform the business into a data-driven powerhouse capable of making value-based decisions and using automation. (See Internet of Things [IoT] Automation below.)
Retailers Integrate Across Channels
In 2015, retailers focused on either defining or evolving their digital strategy. Many concentrated on digital branding through traditional IT solutions such as email engagement, Web content promotions, social media sites, and developing or enhancing mobile applications.
This focus has yielded many benefits and given retailers the ability to pursue a digital strategy and drive consumer adoption. But they still need to take different approaches to audience targeting based on the consumer endpoint and the technology delivery channel, resulting in isolated experiences and more effort.
In 2016, retailers will focus on merging these experiences into a single digital channel where the consumer will experience the brand instead of a brand within a channel. This will help retailers achieve cross-channel integration, coming many steps closer to meeting the promise of omnichannel engagement.
This is a retail revolution in the making, enabled by a digital platform strategy that allows retailers to cocreate value across channels, partners, and potentially other industries or even competitors.
Bottom line: Fueled by secure networks, cloud enablement, agile development, social engagement and mobile empowerment, many retailers will look to merge their business and digital strategies with a platform strategy to build an ecosystem for their brand through real-time engagement with buyers, sellers and a multitude of third parties.
Mobile Comes First
In 2015, retailers invested in traditional digital content delivery for desktop and laptop users, as well as functionality for mobile devices.
This brought choice to the consumer and assurance to the brand that any touchpoint would be a channel for its consumer base. But the costs of maintaining and engaging across so many devices are high, and under this strategy the seller is less able to change the way in which the brand is experienced.
In 2016, retailers will focus on mobile first. The exponential explosion in mobile devices is creating constantly connected and informed consumers. Meeting their needs will require a change in digital investment.
This year it’s projected that more than 30 percent of all commerce will be conducted on mobile devices, and more than 80 percent of consumers will use some form of mobile device and/or mobile application to drive purchasing decisions. Retailers will increase their focus on mobile phones, tablets and other devices, such as wearables, to increase brand loyalty.
Bottom line: Investments are needed to plan and design a unique brand experience purpose-built for mobile, as opposed to websites optimized for viewing on a mobile device. The main goals of the mobile-first approach are to deliver convenience, product/service visibility and a seamless experience to the consumer, including relevant third-party integration, social integration and, most important, personalization.
Supply Chain Becomes Consumer-Driven
In 2015, the supply chain was critical to the omnichannel strategy, to give retailers flexibility in order management and fulfillment and to minimize the time and cost of product delivery. The continuing evolution of consumer demand and market disruption will require retailers to push forward faster.
In 2016, the supply chain is transforming into a cohesive consumer-driven model focusing on flexibility, visibility and choice of fulfillment options, regardless of touchpoint. In essence, consumers become a brand unto themselves, combining their distinctive preferences to form a personal relationship between their brand and that of the retailer. This requires a new level of engagement with consumers, to create value for them not only in the commercial transaction but also in the supply chain.
Bottom line: The benefits to the consumer are obvious. They can see what, where, how and why a product or service is obtained and delivered and are able to establish preferences for each step in the process. The value to the retailer is in the segmentation by consumer to improve brand loyalty through optimized assortment, direct marketing and stock availability, while engaging in a flexible fulfillment model that reduces the retailer’s costs of delivery, overstock and waste.
IoT Automation Takes Off
In 2015, IoT was the new buzzword (or, more accurately, “buzz-acronym”) in retail, yet many merchants were still struggling with how to best invest in and use this emerging concept.
Connecting smart devices to networks, including the Internet, is turning device-centric computing into an ecosystem of interconnected, decision-making engines that can improve the efficiency of automation and spur the advancement of self-healing systems.
Some key IoT technologies in play today for retail to consider are wearables, connected automobiles, augmented reality, and beacons. In the end, the goal is connected everything, but most valuable is using IoT to connect the brand with the consumer.
In retail, the possibilities are endless. However, a lack of industry standards has made it difficult to determine where to start, so the use of IoT capabilities across the retail sector has been limited.
In 2016, IoT capabilities will be included in consumer technologies such as kitchen appliances, automobiles, lighting, home security and home media devices, pushing retailers and influencing consumer behaviors and expectations. The consumerization of IoT will drive new demand for connected devices in retail that will engage the consumer in new and more intimate ways. This, in turn, will drive greater volumes of data that should improve the precision and value of analytical decision making.
Bottom line: Retailers will be able to use IoT to more accurately collect, analyze and measure success. More importantly, IoT will help them automate many functions that will allow retailers to focus on planning, marketing and targeting consumers with richer experiences.
Achieving the Upper Hand
Challenges remain for retailers in key areas of the business, and the threat of new competitors and disruptive forces remains. However, it's clear that many retailers have responded effectively to these challenges and are benefiting from the strategies and investments they've made and the new skills they've developed over the past few years.
Looking ahead, continuing maturation of foundational technologies, expansion of contextual data and growing savviness in retail analytics will allow these companies to make rapid strides toward their most important digital objectives and transformation goals this year.
The year 2016, it seems, is likely to be when retailers become the disruptors instead of the disruptees.