The National Retail Federation Retail ‘Big Show’ kicked off in New York on Sunday 15th January.
Paul Zahra, Australian Retailers Association CEO and QUT Professor Gary Mortimer, Chair of the Australian Retailers Association Consumer Research Committee were there to capture and share the latest retail insights.
Over almost four days, Zahra and Mortimer attended thirty industry presentations and conducted fifty store visits.
Two clear themes emerged to provide future direction for retailers – ‘high tech, high touch’.
The future of retail will be high tech
Academic research has consistently found consumers want to engage in smart retail technology if it expedites the shopping experience.
Retail tech firm, Trigo began with explaining how they were partnering with leading grocery retailers around the world to retrofit them into modern, frictionless, smart supermarkets. Those retailers included Tesco who announced the opening of three autonomous stores in November 2022 and Aldi (Nord) which opened its first AI-Powered frictionless supermarket in July 2022. German retailer REWE also expanding into ‘frictionless’ grocery shopping with Germany’s first fully autonomous store, after already testing two hybrid test stores in Cologne and Berlin.
HP m-POS technology presented ‘Queue Busting’ technology that enabled retailers to respond flexibly when stores are busy. Teams can simply grab an m-POS, transact customers purchases quickly, then return the m-POS to its cradle and return to the job at hand.
AI-enabled ‘Voice technology’ is also set to change the way retailers engage with their customers Research indicated 90% of US consumers use ‘Voice’ to connect with Sir, and nearly 80% use Google Assist. It is expected that customers will use voice while wandering a supermarket, asking where a product is located, or which brand of shampoo is on special this week, or even how to cook a new recipe. German retailer Schwartz Group is already working with Vixen Labs to roll out more complex and advanced AI, that can deal with a variety of languages.
Virtual queuing technology will give back customers’ valuable time. Rather than waiting at the paint counter for your paint to be mixed or at a pharmacy for your prescription, new technology will alert shoppers when their products or services are ready.
Retail tech companies, like ShopExp plan to help fashion retailers compete on convenience. Imagine being able to try things on without having to take your clothes off. The future of fashion retail shopping will be underpinned with Smart Mirrors and AR fitting rooms. Recently, H&M Group started rolling out a host of tech-enabled shopping experiences across its Cos stores in the US, including smart mirrors that offer personalised styling recommendations and virtual try-on.
Finally, companies like Firework discussed how new social media technology help retailers connect with the untapped US$20bn ‘Super User’ market segment. The pandemic saw a sharp increase in consumption of short-form videos as entertainment-starved consumers made a beeline for quick, snackable video content on social media platforms. Research presented ‘shoppable videos’ were achieving 22.4% higher conversion rates, 18.7% higher engagement and 6.7 times higher ‘click through’, than static social media posts.
The point of competition will be high touch
While consumers will demand more retail smart technology, they will continue to seek human engagement, and ‘high-touch’ will be the point of competition for many retailers.
A clear message throughout the four days was that technology will enable better consumer engagement. US luggage retailer Vera Bradley engaged Zebra Technologies to lift productivity, while engaging team members and meeting customer demands.
The technology was used to deliver ‘predictability’ to store teams in terms of inventory deliveries, communicating promotional pricing changes and other store operational tasks. Communicating quickly, clearly and giving teams sufficient notice, enabled teams were not being taken away from customer service roles.
Steve Dennis – President & Founder of SageBerry Consulting outlined the key principles of making the ‘remarkable retail’. Dennis suggested retailers ‘harmonise’ their teams. A customer may engage with different members of your team, so ensure the customers’ experience is consistent. Be ‘memorable’ by finding the very best people – suggested retailers can’t risk dropping their service standards. They should invest heavily in training, coaching and instore mentoring.
Executives from Toshiba suggested consumer expectations are quickly evolving, so retailers need to be intentional about the experience they deliver to create meaningful differentiation through continually delivering memorable moments for consumers.
Fashion retailers Boggi Milano, John Elliott and Jenni Kayne, all spoke about what separates the ‘best stores’ from the rest, and the steps required to build a modern premium store experience. Three clear themes emerged: firstly, developing exceptional store team, secondly a shift from ‘personalised’ to ‘personal’ and finally, unobtrusive technology.
Michelle Evans, Global Lead of Retail and Digital Consumer Insights for Euromonitor International reiterated to push towards ‘high tech, high touch’. Michelle suggested consumers in 2023 are demanding technology with a human touch. They want speed but also want an emotional connection, which enables consumers feel connected and appreciated. Something they have lacked over the past 3 years of the pandemic.
The level of ‘intrusiveness’ associated with technology will become a barrier to adopt and use and will distract from the store experience. Consumers are happy to purchase online with technology and use it to expedite their transaction, but they get ‘less comfortable’ when technology ‘intrudes’ into services.
Finally, Hamdi Ulukaya, CEO and Founder of Chobani and Founder of Tent Partnership for Refugees suggested retailers can play a critical role in helping refugees integrate economically into their host communities. He encouraged retailers to think beyond traditional philanthropy, to include refugees by engaging them as potential employees, entrepreneurs, and consumers. Retail is a diverse business, so it is reasonable to have a diverse workforce to serve diverse customers.
Image source: https://nationalretailfederation.smugmug.com/2023-Events-Public/NRF-2023-Retails-Big-Show/General-Event/