A lot of people talk about the great apocalypse of retail. On the surface, negative headlines paint a picture of dim prospects for just about everyone but Amazon. Despite these seemingly dark times, a retail renaissance is currently underway, setting the path for a brighter future for the entire industry.
As the co-founder of Heyday.ai, an AI-powered customer chat platform for retailers, I am a prime witness of this “retail renaissance” and of the systemic trends that are shaping its future. To offer a more positive outlook of the current and future states of retail, I decided to take the pulse of those who are truly in the trenches by creating a virtual roundtable of global retail leaders who are leading the charge and embracing the change.
From fashion to automotive to home appliances verticals, I interviewed a select group of seasoned retail executives to help elaborate on the driving forces of retail’s transformation and how brands can adapt and thrive in a mobile-first, AI-driven retail world.
Rising Customer Expectations
The new generation of shoppers is increasingly looking for instant gratification -- the same level of immediacy they’re accustomed to with their phone.
Noam Paransky, senior vice president of digital at Gap Inc., pointed out that consumers “want things faster and with greater relevance. They’re looking for an elevated level of interaction.” This obsession with “the now” is forcing retailers to shift the way they operate in order to be more nimble. Customers are looking for what I call “on-demand brands,” businesses that can deliver added value instantly.
Seamless Omnichannel Experience
With the emergence of mobile as the preferred customer channel for commerce, the line between online and in-store shopping is increasingly blurred if not disappearing. As a result, brands must rethink the entire omnichannel experience to feel as seamless and frictionless as possible.
Jeff Pearson, senior vice president of e-commerce and marketing at LIDS Sports Group, summed it up nicely by explaining: “I like using the words ‘unified commerce’ as opposed to ‘omnichannel’ ... Today’s customers want to be able to shop what they want, research what they want, buy what they want, anywhere and at any time.”
In order to meet these expectations, retail brands must redesign customer experiences to reduce the barriers between the physical and the digital worlds. The end goal: remove friction in the customer journey.
Rich Customer Conversations
According to Jim Lyski, chief marketing officer of CarMax, conversational AI technology might just be the long-awaited glue of omnichannel. He told me: “The more complex the customer journey, the more you risk losing customers. Chatbots help the process stay fluid and remove friction.”
With a hybrid use of AI and human assistants, brands like CarMax can now unlock rich customer conversations at scale, 24/7/365. I believe the ability for brands to continue the dialogue with customers over a period of time is the future of customer engagement outside of the four walls of a store.
Each month, a whopping 8 billion messages are sent between businesses and customers on Facebook Messenger alone. Customers increasingly expect businesses to be available via text message, which forces brands to rethink their communication strategies. At the end of the day, customers want access to businesses and services whenever they want and wherever they are -- and that increasingly means in messaging apps where they spend most of their time chatting with their friends.
Data-Driven Personalization
The more brands open up communication channels with their customers, the more they can learn from these interactions and get the right data to further personalize experiences. Grégoire Brasset, vice president and general manager of Lacoste Canada, told me, “The future of retail is about creating a customized experience through product personalization and specific customer considerations.”
Global brands are sitting on large amounts of data but only a handful are actually leveraging it to its full potential. Peter Weedfald, senior vice president of sales and marketing at SHARP Home Appliances, believes this is a huge untapped opportunity and offered a unique perspective: “CRM stands for ‘consumers really matter.’ Unfortunately, most companies are spending millions on CRM and are still doing a lousy job at personalizing the customer experience with data.”
I think he’s right. One-to-one personalization is the real promise of data lakes if leveraged properly. When a brand’s data is organized in a way that is easily accessible for both store associates and virtual agents (AI), the degree of personalization in the experience can augment exponentially -- and so does customer satisfaction.
Bringing The Human Touch Of In-Store, Online
Despite the high expectations, AI and data alone are not the answer. Even the most technology-driven retailers believe humanity should still be at the center of interactions.
By leveraging new technologies like AI to augment store associates -- not replace them -- retailers can give their team the superpowers they need to provide exceptional customer service.
In the end, the future of retail is just like its past. It’s about putting the customer back at the center of everything. In my experience, thinking about people first almost always leads to more profits. Sometimes, customers only want to have a simple conversation.