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2015 Consumer Markets Trend: Infusing Technology

In our last blog entry about Consumer Markets trends, we discussed the importance of the Customer Experience.  Gauging how effective the customer experience is depends on how seamless and easy the experience is.  Technology has proved to be a solution and help drive service and convenience to the consumer.  In 2014, we saw retailers adapting new technologies to enhance the in-store experience as well as using them as a driver to the store.  While online purchases are still on the rise, in-store sales will still remain the highest source of revenue for retailers.  Driving traffic into the store gives sales associates opportunities to upsell and increase impulse purchases so investment in in-store technology is going to be imperative.
“To Truly capitalize on the promise of all channels in the coming years, we will see an increased investment in technology that encourages customers to visit stores and helps associates provide selling experiences tailored to individual customers” – Scott Fenwick, Manhattan Associates
Driving service and convenience for both the customer and associate are at the top of the list when leveraging digital store technology.  This post will identify the different technologies that are improving the experience for both the shopper and associates this year.  Obviously technology has been around a long time but it continues to evolve and grow rapidly as the needs and demands of consumers change.  This technology explosion has created an incredible diversity of products that are revolutionizing the retail industry as a whole.  Here are a few that are playing a major role in 2015:
Due to the rise of digital and mobile, retail displays and traditional advertising no longer capture shopper attention or intended impact that they once did.  Two-thirds of shoppers utilize their smartphones while in a store so brands/retailers have had to find different ways to engage their customers.  Location or Proximity based mobile marketing (Beacons) has allowed retailers/brands to deliver personalized and relevant content and offers to customers via their smartphones while they shop in specific areas of the store.  Due to personalization being a top priority for retailers this year, beacons will be of important use as retail stores will be looking to increase personalized shopping experiences for customers in-store.  We can expect to see this technology play a larger role in the mobile commerce space while still remembering it is in a very early stage for many retailers and brands.  Adoption of beacons has been growing over the past year with retailers deploying beacons in stores nationwide.  Embedding beacons throughout a retail store (signs, product displays, shelves, etc), help enhance the shopper’s experience from a knowledge standpoint to a customer service standpoint.  While offering sales associates shopper information and digital metrics and placement of customers in the actual store, the store can create personalized last –minute or impulse offers to the customer.
So what type of beacons are the right ones to invest in?  According to Forrester:

  • iBeacons that follow standards set by Apple
  • Simple Bluetooth beacons that act like a lighthouse to proximity
  • Beacons that add additional security, processing power and sensors
  • Beacons that engage more location detection methods

The capabilities for this technology enable retailers to create their own in-store ad offers and exchanges and allow invitation for brand partners to interact with shoppers at different locations in the store. By opening beacon networks in a controlled and transparent way, retailers can avoid backlash from their shoppers (think great experience vs creepy stalker) and create valuable marketing opportunities with brands to enhance the customer experience.  So retailers/brands need to be strategic in beacon placement and the amount of messaging that may go to an individual shopper as well.  This year we will definitely see investments move more towards targeted in-store mobile initiatives and experiences.
Despite the digital evolution and growth of ecommerce, ninety percent of all retail sales transactions still occur in the store. Retailers are hoping that with an excellent in-store experience, enabled sales associates combined with instant gratification will allow for even the savviest connected consumer to spend more money and time in the brick-and-mortar store.  For this to occur, there is one thing that must match the convenience of an online experience – the checkout process.  The scenario where a customer walks into the store and finds the item they are looking for by technology mentioned above (the Beacon) and then walks out with their card automatically being charged is not exactly occurring right around the corner.  BUT Point-of-Sale has changed dramatically over the past decade (digital signage, self-checkout, inventory search at the POS, loyalty & registry based kiosks, mPOS).  With new, flexible POS systems, retailers are able to provide a seamless, convenient, and a more personalized experience and transaction.  Traditionally, POS systems were used to scan an item and ring up a bill.  But now, these flexible systems can offer a multitude of operations and have transformed to helping to enable service.  Many POS systems now contain a customer facing display screen that contains information relation to the product being purchased or related products (think impulse buy).
POS goes mobile….Mobile POS is something that we have seen increase over the last year and can expect to see more of this year as well.  More and more retailers will be implementing mPOS to remove the front-store registers and repurpose the traditional POS location to be anywhere in the store and display products and merchandise.  Many retailers have traded in the front-store register for iPads that allow for ease and convenience of checking out anywhere in the store.  This not only influences the customer experience for check-out purposes but will have a ripple effect to other systems including supply chain, inventory, product information, sourcing etch that will be better connected and serve data to mobile POS apps.

Wearables have become a very popular technology over the past year and are expected to double in market size in 2015, especially as the Applewatch is set to launch this Spring.  With the wide array of fitness wearables out in the market, it is expected that Smartwatches will be at the top of the wearable market and maintain their position through 2019.  There are many forms of wearables but most consumers automatically think of their fitbits or jawbones that monitor our workouts, daily steps, etc. However, there are a lot of other wearable products that have been introduced into the marketplace, from jewelry to dog accessories to ProGloves (actually trains your muscle memory!).  Wearables are a new technology and are in the early stages of endless possibilities and there are arguments that wearables are doing bits and pieces of what our actual Smartphones can do so what is the point?  But what it will come down to is not the wearable itself, but the data it collects, how it is analyzed and what it is used for.  It remains to be seen for retailers and brands as to how they can leverage these devices and the data they provide to better serve or market to their customers.
Augmented Reality
AR was a hot topic in 2014 but is a newer technology so not many retailers/brands have adapted it.  In 2015, we can expect to see more retailers testing this in-stores.  From tools that allow you to try on clothes, jewelry, or accessories “virtually” to apps that help you find your favorite stores to new customer-brand interactions, AR is making a huge impact already on retail. AR
Neiman Marcus partnered with MemoMi to launch the “Memory Mirror” that allows customer to try on any outfit “virtually” without actually having to go through the hassle of a fitting room.  With a 360 degree body scan, the mirror can capture video and still images of front, back and side views allowing a customer to get an accurate impression of fit and look.  These images and video can then be saved and shared via social media, email or with associates.
Burberry created their Beauty Box that allows shoppers to select their skin tone, place different nail polishes on a bar and the display then shows how the polishes look in real life.  The shopper can then select what polish looks best on their nails.
Lego has created kiosks that allow the customer to hold up a box of the item they purchased and show them the completed model as if they were actually holding it their hands.
The US Postal Service has created a virtual box simulator that allows customers to see if their items can fit into a virtual box so they can choose which box would best suffice their needs.
Sephora teamed up with ModiFace to develop a 3D AR makeup and anti-aging mirror that in real-time enables customers to quickly try products virtually in the store.
Augmented reality is not just enhancing the in-store experience but also the digital experience as well.  An important part of the in-store customer experience is so they can touch or hold the product they are interested in purchasing.  Since online shoppers cannot actually do this, the AR experience gives them the next best thing.
Zenni Optical allows you to upload your face onto their site to try on any pair of glasses virtually.
DeBeers has developed an AR download enabling shoppers to try on jewelry through the user’s webcam to see how the pieces look against skin tone, lighting, etc.
The end result of AR is that shoppers are becoming more knowledgeable about the products they purchase and are more likely to have a positive, seamless experience with the purchases they make.  AR will start to play an increased role in the future of retailers and consumers.  AR will increasingly influence purchase decisions through information services and promotional tools.  In order to stay relevant and competitive, retailers need to concept and execute an AR strategy so they are prepared and not at a disadvantage to their competitors in the future.
As we know by now, retailers are revamping their in-store strategies to create a better customer experience and improve operations.  RFID technology has allowed retailers major benefits for merchandise availability in their stores.  It can give great visibility to the location of each product or piece of clothing in a store which ultimately leads to a better experience for a customer when they are in search for a specific item.  Retailers such as Macy’s, have claimed that RFID technology has improved gross margins, sales and markdowns, enhanced efficiencies by leveraging accurate and real-time inventory quantities.
AppsApps - Tile Icons on Smart Phone
Consumers spend more time on their mobile devices than watching actual television!  As we stated in our first trend blog for 2015, mobile investments are increasing from advertising to technologies to business development.  It only makes sense retailers/brands will make higher investments in the mobile experience which includes apps.  Forrester notes that there are 5 app trends that companies should incorporate in their mobile app strategies in 2015:

  • Twitter & Google will continue to compete with Facebook in the app install war: Invest in App Store Optimization
  • Apps with huge reach improve their marketing platforms: Think in micromoments – app extensions & borrowed mobile moments
  • App Strategies will need revamping: Match your customer segments
  • “Deep Linking” will simplify the mobile experience & executing of mobile marketing: Test app deep-links
  • App retargeting will optimize mobile marketing campaigns: Use mobile retargeting for a more cost-effective way to acquire loyal users

So as we can see, many technologies have been created (and there are many more) but there is still a lot of room for growth which will be costly for any retailer or brand.  Can the consumer markets industry keep up?

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Heather Bowman

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