Smartsheet just returned from an exciting two-day conference with technology leaders in retail. The companies represented at the 2017 Future Stores Conference ranged from some of the largest in retail to boutiques, onliners, and old school brick and mortars. During presentations, interviews, and discussions several themes arose during this conference.
I’d like to share some of the more interesting observations and learnings we heard... more importantly, I’d like to hear from you as you ponder what’s taking place in this volatile industry.
Virtual and Physical Presence Must Both Grow
Of course, the “retail apocalypse” is the topic on everyone’s mind - Credit Suisse estimates over 8,500 store closures in 2017, mall traffic is down dramatically, and closures could break a 20 year old record. As a result, the conference centered around one central recommendation as vital for retail survival and prosperity: every aspect of the retail experience must be focused on customer experience and customer engagement.
Shocking statistics aside, I had the chance to meet with a range of retailers from Cabelas, Dick’s Sporting Goods, Kohls and many more - and guess what? Retailers are growing not only their virtual business but they are also expanding their physical presence!
This was underscored in one of the breakout roundtable sessions when a speaker opined “Tactile and ‘techtile’ have to come together.” Millennials prefer to shop online with retailers/brands who have a physical store. This combination makes it easier to initiate returns and get money back immediately, but more importantly the in-store experience offers consumers the chance to interact with goods they may have seen online: to feel fabrics, to try items on, and so forth. Retailers that realize this and adapt their approach to offer a unified shopping experience across in-store and online channels will connect with millennials - the most important emerging client base.
Digital Innovations Continue to Exceed Consumer Expectations
Boutiques have recently been some of the most innovative outlets and digital signage is a hot topic of conversation. We saw Neiman Marcus demonstrate their “Memory Mirror” which retains images of how a piece of apparel fits a consumer, making it easy to then compare outfits. They are also using “memory mirror technology” at their cosmetics counters to show consumers online videos of how makeup should be applied. Creating unique experiences is a major strategic initiative and companies like Neiman Marcus are leading innovation in retail.
Another interesting trend is Self Service Checkout. Obviously grocery stores have pioneered the rollout of this technology (with Amazon Go taking it one step further), but soon self checkout will be everywhere!
I met with technology vendors who have automated POS self service checkout by putting that functionality in the hands of the consumer through an iOS and Android app. The customer shops in their favorite stores, wands the item, and the system takes care of the purchase, as well as the inventory and finance updates on the back end. This is a very exciting area that can be implemented with minimal infrastructure investments… and that ties back to the ultimate goal of creating rich, user-friendly customer experiences.
Pressures to Change Drive Unexpected Solutions
Another issue that highlights the changes in retail since 1990 is the organization of goods in the stores themselves.
Traditional retail stores are organized by the way categories are managed, not by the way consumers use products. Legacy retailers need to rethink their product mix, their store layouts and update their entire operations at scale. This effort must be approached with the ideal of creating unified customer experiences - that means that retail reinvention cannot take place group by siloed group, but must be approached as a unified effort on which the entire company collaborates. Coordinating unified, experiential change takes close collaboration across teams and focuses, all of which must be orchestrated in a system that provides visibility into adjustments across the organization. The model of success? Online companies that are “taking the plunge” into brick and mortar - they demonstrate an admirable focus on translating their online experience into the physical world.
What was truly amazing is hearing the depth of challenges that “Old Schoolers” are dealing as they try to migrate from systems that were deployed in the 80’s and 90’s to the latest technology. These organizations face incredible integration challenges and require deep resources and an incredibly loyal customer base to survive. To make such large scale systems changes, close collaboration and coordination between groups is a necessity - the use of traditional email, Sharepoint document management and siloed tools will not be sufficient to manage the data and knowledge transfer needed to effect these changes.
As Author Lewis Dart points out in “The New Rules of Retail” - the key to an effective 21st Century Retail Operation is a highly collaborative retail value chain. For more on this topic, check out my blog post from late 2016.
To learn more about how Smartsheet provides retailers with solutions for managing the store of the future (and the customer of the future!), contact email@example.com.