Honeywell’s Karen Bomber provides a view on the Future of Retail at Honeywell’s booth at NRF 2022. … [+]
Future Research
The National Retail Federation’s Big Show continued as scheduled at the beginning of the week in the face of COVID concerns that seemed to indicate how ready the industry as a whole was to recover from the pandemic. Several brands, from small startups to established retail and tech giants, have announced and will continue to drive the industry and spur economic recovery. There are several key themes presented that indicate what the future of retail will look like in the coming decade as we continue to see the fading of the digital and physical world.
Combining the Digital and Physical Worlds to Meet Customer Expectations
Many major retailers including Target, Walmart, and Ralph Lauren were featured presenters during the NRF and all had one thing in common – the physical store is here to stay, but the digital world is growing. Obviously over the past two years we have seen a huge increase in e-commerce sales due to the nature of the pandemic, but for many consumers the physical world is still important. The IBM Institute for Business Value and NRF released a consumer study prior to the event in which 72% of respondents still use the store as all or major part of their buying experience. However, the younger generation has a changing priority. 36% of Gen Zers prefer a hybrid shopping experience.
And it pays attention to retailers and tech companies. Meeting customer expectations for all demographics, while intimidating, is not impossible in today’s world. Adobe is evaluating the physical store with new solutions and capabilities built into Adobe Journey Optimizer on the Adobe Experience Platform and Adobe Commerce. New technologies will make in-store fulfillment faster and easier to use for employees and customers. Messaging capabilities will make it easier for retailers to reach customers in their preferred mode of communication with targeted messaging.
On the retailer side of the business, Target had a big stake in the physical store at the start of the pandemic and paid it off for the big box store. The target is to make pivots easy, offering more fulfillment options for customers including curbside, in-store, and same day delivery from the nearest store. This change to keep the customer safe and shopping however they are comfortable will continue to progress.
There was also some conversation about retail and the future of the metaverse. While it may be a few more years, it’s important for retailers to start looking to the future now to plan for what’s to come. Are we shopping in the metaverse? Will we buy things for our digital self? Or is the metaverse another channel to reach consumers? Although the metaverse is largely nascent at this point and somewhat overhyped in its early days, that doesn’t mean metaverse applications like avatar-driven customer service, augmented reality shopping, 3D commerce and more. From Walmart to Ralph Lauren, there is consensus that this is a place for the future for retailers. Only time will tell, but the important thing is that you start planning now.
There are many Diversity, Equity, and Inclusion Initiatives
Over the past few years many retailers have had a reckoning with DEI initiatives. In a keynote presentation, James Fripp, chief equity and inclusion officer at Yum! Brands told attendees that if they weren’t worried about doing enough, they probably weren’t doing enough. Improving diversity at all levels of the organization from the retail floor to the board room are critical components of the new retail reality. The ability to interact with customers of all backgrounds requires the presence of employees of all backgrounds.
The CEO of Walmart has challenged retailers to be transparent with their diversity initiatives. Walmart issues an annual report with findings on the demographics of employees and their progress. This is really what we need to see more in 2022.
Sustainable Shopping and ESG
This is not a new trend, but rather a growing one. Younger consumers are driving more sustainability in retail and many are on top of the greenwashing and lip service offered in the long run. They want real change. According to the same IBM Institute for Business Value Survey, 62% of consumers are willing to change their buying habits to reduce the environmental impact. And half of the respondents were willing to pay a premium for maintenance.
Retailers need to respond. In a session with Walmart and Rothy’s, the two organizations discussed tips for creating and maintaining sustainability goals throughout the organization and how to report them openly. In a similar session, Ikea’s U.S. CEO and Chief Sustainability Officer shared that it’s important to create initiatives that inspire others, but they must come from the core of the company. I am sure this topic will continue to grow in popularity as the younger generation becomes a larger consumer audience.
Over the past year, we’ve seen the likes of Amazon (AWS), SAP, ServiceNow, Microsoft, Salesforce, and several other leaders in cloud, technology, and enterprise software deliver versions of a “Sustainability Cloud,” and of course retail. will be a big consumer of this technology as they seek to prove to consumers that their ESG efforts are more than just “Greenwashing.”
Use of Technology for the Customer and the Employee
Technology, both existing and emerging, plays an increasingly important roll in the retail experience. Major tech companies are moving forward to deliver technologies that help retailers take the customer experience to the next level. For example, Qualcomm has shown how IoT technologies help retailers transform digitally. From smart shopping carts for frictionless checkout, to immersive smart displays with innovative features, we’re likely to see an increase in in-store technology over the next few years. Biometric demonstrations using fingerprints and what most of us recognize as “Face ID” payouts will continue to gain traction for both security and convenience reasons.
Some retailers even focus on doing shopping at a destination and a gathering place. Backcountry, a specialized outside retailer, using Oracle Retail Xstore Point-of-Service, retail associates will be empowered with the necessary data to take the customer experience to the next level. With a branded, dedicated support team, Backcountry shoppers can expect the same level of service inside and outside the store — a popular trend in concept, but something not yet fully realized in the woods. Technologies like this from Oracle combined with next-generation headless CMS from companies like Contentful and Adobe will serve as catalysts to realize omni-channel potential.
I also remain intact that technology will be the primary catalyst for truly delivering the next generation of customer experience, whether it be blended experiences or simply delivering great data -based customer service. Cloud-based CX tools like Zendesk, Five9, and Talkdesk, for example, will be critical for serving customer needs and all overlay API and critical AI capabilities to automate and improve the service at all times. I’ve also been bullish on the power of the customer data platform for retail, and that is still aging. Treasure Data, for example, combines CX, Contact Center, and CDP, with its recent focus on making all data available to the contact center agent to significantly improve customer results. CDP will help every part of the journey, and players in this space including Twilio, Microsoft, Adobe, Salesforce, and Oracle are actively working to build the next generation of CDP.
Finally, it is worth noting that the technology is not just for consumers. Many retailers also consider employees and provide them with the necessary devices to facilitate their jobs. This includes more front-line tools like Honeywell technology that allows voice selection and counting to free hands and reduce clutter in the hallway. There are so many emerging and existing technology tools for employees to empower real-time knowledge and communication with full integration with ERP and CX tools.
What’s Next for Retail
The NRF announcements gave us a glimpse into the future of retail. Qualcomm, Adobe, Oracle and a group of other tech companies are creating new solutions that will change how retailers reach consumers and how consumers shop. I also believe that these emerging technologies and changing priorities are the first dominoes to fall and lead to other developments. We are seeing rapid change in this rapid environment and I don’t think it will slow down any time soon.
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