What lies ahead for the retail store? Yesterday, Forrester published a report that predicts the answers to key questions about the future of the retail store: Which digital technologies currently on the periphery of the store environment will make the leap to the sales floor? How will retailers know which technologies have potential and which will remain gimmicks?
In the report, we outline the utility and predicted chronology of several technologies, including:
Proximity technologies. Retailers will know when and where an associate is needed, by whom, and for what purpose.
Wearable technologies. Associates will access the relevant data to provide optimum customer service with minimum intrusion.
Facial scanning technologies. Retailers will know their in-store customers’ histories, preferences, intentions, and needs and will cater the store experience to them.
Smart countertops. Retailers will embrace consumers’ propensity to do product research while shopping in-store and enhance the utility and experience at the same time.
3D printing. Retailers will make the inventory they need on-site or once it’s been purchased.
For more on Forrester’s take on the usefulness of these and other technologies, and to see our predictions of when we’ll see them enter the retail store, see the report (client access required).
Which technologies do you think will realistically make it into retail stores of the future?
I recently “overheard” a member of our market research online community (MROC) say, “I treat my smartphone like my child and carry it everywhere I go.” It’s official: Smartphones have replaced children. Not really, but the statement speaks to the way that consumers have changed their thinking and behavior because of mobile devices. The rapid adoption and dominant presence of mobile devices speaks to their importance in consumers' daily lives.
As part of our effort to develop forward-thinking research using innovative approaches, Forrester is collecting behavioral data by tracking consumers' activities on smartphones and tablets. By using a passive tracking technology, we now have a detailed, inside look into what consumers are doing on their smartphones and tablets and when they're doing it. Preliminary results have shown some surprising (and not so surprising) data insights.
I had the opportunity and privilege to get an early look at the new Amazon Fire phone. It delights in many ways, but I’ll focus on the shopping experience enabled through Firefly.
For those who may not remember, Amazon put a dedicated physical button on the left hand side of the phone that launches directly into image recognition. If the image is recognized, then a web-based mCommerce experience launches. The user can then buy the product or it on a wish list, among other things. From there, the experience is more ‘traditional Amazon.’ The ‘new’ is the image, email, URL, etc. recognition.
Why is selling mobile phones important for Amazon? mCommerce in the US alone will add up to nearly $100M by the end of 2014. The new battleground for retailers is in the mobile moment – the point in time and space when a consumer pulls out her phone to get something she needs immediately and in context. Amazon’s FireFly service facilitates two core types of mobile sales moments:
Impulse Sales Moments – these are often flash sales (e.g., WTSO.com, SteepAndCheap, etc.) or spontaneous purchases (e.g., Groupon). The opportunity for Amazon here is in minimizing the friction between consumers seeing something they want, and enabling them to buy it before they forget about it, or find it later in a store nearby.
Replenishment Sales Moments – the phone (or something like an Amazon Dash) is with me when I realize a shampoo bottle or milk is empty or I need more toothpaste.
One of my first jobs was as a sales associate at a clothing store, after which mall shopping lost any of the leisurely appeal it once held. I still find myself folding clothes I didn't unfurl and fixing hanger hooks to all face the same direction.Chalk it up to knowing how the sausage is made, or perhaps a logical side effect of working in eCommerce research, but I do most of my shopping online these days.
The store shopping experience hasn’t changed much since my time as a sales associate. But that’s all about to change. We’re at the beginning of a retail transformation: The growing percentage of retail revenues driven by eCommerce and the influence of digital technologies on consumer behavior and expectations alike means that retailers are being forced to reevaluate the value proposition of the store. The result? A digitally enhanced retail store.
Today, a mix of technologies are coming together to marry the online and offline experiences to revolutionize in-store shopping and the role of the physical store. However, we’re still in early stages. Many of these initiatives remain in experimental phases, and glaring success stories are few and far between. Despite the rarity of iron-clad business cases for these initiatives, eBusiness professionals and their colleagues in store operations are forging ahead.
Together with eCommerce technology analyst Adam Silverman, I recently published a report laying out the current state of digital store initiatives and the promising opportunities a digital store overhaul represents for retail. Some of the ways retailers are transforming retail stores include:
A long list of European pure player retailers were put through a rigorous Shop Experience Audit by GfK to identify a short list of five players that six jury members evaluated. The short list of candidates included Net-a-Porter, ASOS, Amazon, Zalando and Yoox.
It's been a tough choice because all candidates are very strong players. But, we the jury persevered and evaluated the candidates based on innovation, customer engagement and consistent multitouchpoint presence. Here are the winners:
Winner Gold: ASOS. Jury Assessment: ASOS goes beyond purely generating sales. They work to be present at their customers’ moment of need at every stage in the customer life-cycle, including engaging customers so they come back again. Their content and communication is consistent, as is their presence across devices. They have strong growth from international sales and a multi country presence. They've also launched innovative features like the 'fashion finder' function and a pilot program for changing rooms at pick up points.
Contributed by Bryan Wang, Di Jin, and Vanessa Zeng
JD.com, the second largest online retailer in China, went public on May 22, listing itself on Nasdaq after merely 11 years of existence. At the time of IPO, JD had a market value of nearly $30 billion. Despite its size however, JD still managed to increase its customer base by 62% in 2013. How did JD manage to continually achieve business growth? I believe this is due to three key factors that differentiate JD:
■ Comprehensive logistics network for online retail in China. JD.com invested heavily in a last-mile strategy to ensure that customers receive products as quickly as possible, establishing 82 local warehouses with 1,620 delivery and 214 pickup stations across nearly 500 cities in China. This has made same-day delivery available in 43 cities — far ahead of the capabilities of Google Shopping Express in San Francisco. To better reach customers in lower-tier cities, JD is also collaborating with local convenience store chains in provinces like Shanxi and Guangdong to further strengthen its last-mile delivery capability.
The first email I received at work in 2014 was from a bank; along with a festive new year’s greeting, the email touted the bank’s new mobile app and a new feature that let customers set up travel notifications directly from the bank’s website. Later that day, I was in an airport reading a friend’s Facebook post about how she wished “more apps were like Uber.”
These are just a few small anecdotes about ongoing digital trends impacting businesses and banks both large and small. I recently spoke with a banking executive who put it simply: “Digital is what we do now.” (This quote is now the header of my Twitter feed.)
Forrester recently published our Trends 2014: North American Digital Banking report, in which we identify major forces impacting banks and lay out five actions that we recommend digital strategists take to prepare for the future of digital banking. Here’s a sample of some of our findings:
Banks will face a sustained – yet unclear – regulatory environment. In both the US and Canada, banks are confronting an uncertain regulatory future. The Dodd-Frank Act was signed into US law on July 21, 2010, but a large number of the rules and regulations remain unwritten. It's unclear when they'll be finalized, and the fact that 47% of deadlines have already been missed – according to the law firm Davis Polk & Wardwell – doesn't bode well.
Have you ever stopped to think where your last online order came from and how it got to your house? We might assume that the package on our doorstep has probably just made a lengthy and complex journey across the country (courtesy of the belly of a UPS freighter, a handful of trucks, a few miles of conveyor belts and some good old human muscle) from a large, nondescript distribution center located in the suburbs of a city we've barely heard of. You may be surprised to learn then, that today it is increasingly likely that the package at your door came no further than a few miles down the road from a locally based store of the retailer you ordered online from. Of course, as consumers, we don’t really care where our purchases came from or how they found their way to our doorstep - as long the right merchandise arrives damage-free and on time.
Coffee-lovers just about anywhere around the world are intimately familiar with the sweet feeling of indulging in a Starbucks Frappuccino – but their blended beverages of choice might be starkly unique. Although the Starbucks brand is familiar to consumers worldwide, the taste of a Starbucks beverage varies regionally according to the diversity of palates. Chinese consumers may seek out a Red Bean Green Tea Frappuccino while their Japanese counterparts prefer a Coffee Jelly; Argentinians may count on that Dulce de Leche Granizado Frappucino where Brits treat themselves to a classic Strawberries and Cream.
The Starbucks Frappuccino phenomenon is a metaphor for any global retailer’s optimal international approach. By catering to consumers’ varying tastes, global companies can hone a strategy that is sensitive to diversity — the “art of thinking independently together,” in the words of Malcolm Forbes.
When it comes to eCommerce specifically, consumer tastes differ not only in relation to products but also to purchase methods. According to Forrester’s Consumer Technographics® data, more than half of metropolitan Chinese online adults regularly buy products through both traditional and mobile devices, but only one in four US online adults and even fewer European consumers do this.
In the age of the customer, firms that assume that what made them successful in the past will continue to drive competitive advantage in the future are doomed to failure. But as a counterpoint, those firms that embrace the opportunity digital technologies bring to get closer to their customers by creating contextually relevant, personalized customer experiences will thrive. That’s the theory, but what does it look like in practice?
This week, two major UK grocery firms paint opposite ends of the digital spectrum.