The pandemic has accelerated innovation across the industry to the benefit of store optimization and the customer experience
Much has been written about the role the global pandemic has played in accelerating innovation and digital transformation across the retail sector. From strengthened processes, to elevated in-store customer engagement, to reimagined distribution centres, retailers have done in weeks what would’ve otherwise been done in years.The level of innovation that has taken place –and the speed with which it has been developed –is defining a new era for the retail industry in general, but particularly for the brick & mortar industry given the role it plays in customer engagement and the importance of finding operational efficiencies post-pandemic. As Retail Customer Experience has noted, “...find a retail organization opposed to implementing new technology, and I'll show you a retail organization that won't be around too much longer. It may sound blunt, but the technology we're seeing reinvent retail is truly transformative. If an organization doesn't embrace it, then they can expect to fall further into their competitors' rear-view mirrors.”
Current and emerging retail tech innovation was on full display at this year’sNational Retail Federation (NRF) Big Show held in NYC in January. Despite reduced in-person attendance due to the pandemic, there was an inspiring energy and feeling of optimism about what the future holds for the industry, and at the centre of that energy and inspiration was the conference’s Innovation Lab. For example, many attendees were inspired by Yawye, an emotional intel company focused on “a brand-new way to measure how people are feeling, using the language of emoji and existing brand content”, according to its CEO. The company is pushing the new frontier of understanding your customer, which the company claims can lead to happiness, loyalty and trust, which builds healthier people, brands and communities. Yawye is only one of many inspiring examples of game-changing retail technology from the conference, and the Optimum Retailing(OR) team was proud to have a booth at the Innovation Lab where we could highlight our commitment to innovation that empowers clients to reach their potential and strengthen competitiveness.
The innovation developed over the last couple of years have fundamentally altered the industry for the better. There have been many predictions about what retail tech innovations will dominate the industry over the next year, with a few garnering a significant amount of attention:
•The metaverse. From the virtual Gucci Garden experience that was unveiled in May 2021 which drew more than 19.9 million visits, to Nike’s move to create content for the metaverse by acquiring NFT creator RTFKT and launching “Meta-Builder Sneakers,” a digital-only shoe, the metaverse is clearly seen by retailers as a huge opportunity. While the general public may be lagging-a recent study from YouGov and The Drum showed that only 31 percent of U.S. adults polled had a somewhat or very good understanding of what the metaverse even is, with, with those ages 45-64 most likely to not have any knowledge of the metaverse at all–it is expected that demand for metaverse experiences will grow significantly this year, with global metaverse revenue expected to approach $800 billion by 2024 according to Bloomberg Intelligence.
•AI-powered retail. AI and ML innovation can be found everywhere in retail, and its prominence is only expected to grow. Following the company’s acquisition of AI and virtual clothing try-on company Zeekit, Walmart recently announced the innovation is now available to customers online and in-app through its ‘Choose My Model’ computer vision AI-powered platform. AI and automation are now at the core of brick & mortar’s current evolution, with McKinsey noting in a 2021 report that a full 52 percent of current retail activities can be automated driven by AI, at least partially.Last year, OR unveiled its Automated Photo Compliance (APC) feature which is powered by automated AI, ML and computer vision, and was developed by the OR team with the view that retail planning and planograms are only as effective as implementation. APC gives brick & mortar retailers confidence that their visual merchandising strategies and campaigns are being accurately executed by providing a ‘realogram’ and unparalleled visibility into retail operations at the store level, all by simply having employees hold a phone up to fixtures.
•Taking personalization to the next level. While personalization of the in-store experience has been a priority for retailers for year, dynamics are shifting in favour of the consumer more than ever. As IBM Chairman and CEO Arvind Krishna touched on during this year’s NRF Big Show, rather than the focus being on the customer’s loyalty to the store, there’s been a shift to the degree to which the store is loyal to the customer.Krishna says the relationship has become more bidirectional, and that as a customer “...when you walk in, your whole perspective is, ‘Am I being treated well?’”. OR’s platform also plays an important role in personalization and hyper localization by leveraging retail data and retail analytics, allowing teams to plan at a micro level. With OR, clients can target every fixture in every store in a strategic way, with every store receiving different content that reflects the unique attributes of each.Further, campaigns can be developed based on region, demographics, type of store, and time of day, among other inputs. The result is campaigns that are more strategic and have reduced go-to-market timelines.
Retail tech innovation is elevating the industry to a level never seen before –improved processes, stronger engagement and alignment with customers, greater visibility into both stores and shopper preferences, and streamlined and interactive store experience are only a few of the ways the brick & mortar industry has been transformed over the last couple of years.The good news is that retailers are upping their game in a bid for competitiveness, while consumers are benefiting from the innovative investments being made.The bad news is that innovative tech advancements are happening so fast that the strategic adoption of retail technology is becoming absolutely critical to success-so critical, that those that fail to keep up are at a disadvantage. As McKinsey noted, organizations are at a crossroads and face an increasingly urgent need to capitalize on tech innovations andAI technology. The companies that wait may never catch up.