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Retailers’ Tech Capabilities Still Fall Short

eMarketer – Today’s consumers are open to various types of retail technologies, and they are even warming up to others that were once seen as too creepy.

A recent study by BRP (Boston Retail Partners) and Windstream Enterprise found that many consumers would be more likely to shop at a retailer that offered tech capabilities like automated returns, as well as augmented and virtual reality experiences. But while interest is there—and retailers are aware of the impact it could have if offered—a good number of them don’t offer such capabilities yet.

In fact, while 68% of US shoppers surveyed by BRP and Windstream said they would be more likely to shop at a retailer that offered automated returns capability, just 8% of retailers said they offer this feature.

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Retailers can’t keep pace with consumers’ digital preferences

Chain Store Age – Consumers said digital influences up to 75% of their pre-store visits, and it’s leveraged in 46% of in-store shopping experiences. Yet, less than half of retailers deliver on the most important digital capabilities that customers desire, according to “Retail’s Digital Crossroads: The Race to Meet Shopper Expectations,” a report from Boston Retail Partners.

According to data, consumers are more likely to shop at retailers that align next-generation technologies to their digital preferences, and understand the impact. These customers are after more frictionless and relevant shopping experiences, however, in many cases, retailers still don’t offer the capabilities that impact consumers’ shopping preferences.

For example, 68% of consumers are more likely to shop a retailer that offers automated returns capability versus one that doesn’t. Yet, only 8% of retailers offer this service. Similarly, 65% of consumers want to use proximity-triggered mobile coupons, but only 8% of companies offer them. Smart fitting rooms appeal to 53% of shoppers, but only 18% of retailers feature them.

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BRP Report Shows How Digital Influences Shopping

Convenience Store Decisions – Consumers expect greater convenience and empowerment to shop the way they want and where they want. According to a new report from Boston Retail Partners (BRP) and Windstream Enterprise, rapidly evolving customer expectations and digital technologies are driving a major transformation in the retail industry.

“The Retail’s Digital Crossroads: The Race to Meet Shopper Expectations” report, based on research conducted by Incisiv, combines findings from surveys of 1,212 retail consumers and 60 retail executives to understand the effect digital has on the shopping experience.

“The digital divide in retail is growing, as over 75% of retail shopping traverses the digital realm, but less than half of retailers deliver on the most important digital capabilities that customers desire,” said Brian Brunk, principal, BRP. “Further, very few retailers offer the next generation digital technologies, like automated returns and proximity-triggered mobile coupons, that could significantly influence future purchase decisions. Retailers must transform and quickly close the digital gap to remain relevant with their customer.”

“Mobile devices and the capabilities they enable are the primary catalyst for the continued evolution of the customer experience,” said Ryan Grogman, senior vice president and practice lead, BRP. “The majority of today’s consumers research products and brands digitally prior to visiting a physical store and, once they are in the store, about half of them use their mobile devices to perform price comparisons, read product reviews, and even validate inventory.”

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Alibaba is piloting AI-enabled shopping experiences

Luxury Daily – Chinese ecommerce giant Alibaba has opened a concept store that offers shoppers and luxury retailers a look at a new frontier for fashion retail digitization.

Dubbed “FashionAI,” the pilot boutique harnesses artificial intelligence capabilities for a stress-free shopping experience. While it is only open for a few days, the store will act as a temporary testing ground for innovative retail formats.

“AI-assisted shopping brings the compelling elements of online purchasing to the physical store, creating a truly unique, personalized customer experience,” Laura Sossong, consulting manager at Boston Retail Partners, Boston. “Consumers who desire a meaningful in-store experience but want the added benefits of styling tips, convenience and individualized customer service are sure to embrace this hybrid offering.”

Ms. Sossong is not affiliated with Alibaba but agreed to comment as an industry expert.

“Predicting fashion trends is imperative for the success of luxury retailers, and in-store AI technology will allow retailers to glean invaluable insight into marketplace preferences and trends,” Ms. Sossong said. “By gathering rich reportable data on customer shopping choices, retailers can then predict trends, demand and inventory needs and shape assortment direction and strategy based on findings.”

“The plethora of insights created by AI will enable luxury retailers to make smarter merchandise planning and assortment decisions,” BRP’s Ms. Sossong said. “We are bound to see elements of AI technology being incorporated into the luxury space, particularly in high end markets where implementing AI will bring ROI by inducing further purchases.”

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CLOUD STRATEGIES: Proving Key to Personalization, Product Content Enhancement

Retail TouchPoints – The retail cloud business segment is expected to reach more than $28 billion by 2021, growing at a compound annual growth rate (CAGR) of 20.9%, according to research from MarketsandMarkets. As many as 70% of retailers say cloud will be a major factor in their business by 2020, according to a report from The Economist Intelligence Unit. But as more retailers jump aboard the cloud bandwagon, they should strive to gain a competitive edge with the technology that goes beyond the basic benefits of a cloud implementation.

This Retail TouchPoints Special Report will spotlight innovative strategies facilitated by cloud solutions that can help retailers achieve new business goals with speed and efficiency.

Many retailers already are leveraging cloud servers for business basics like POS processes, order management and fulfillment and communications across the enterprise. More advanced cloud offerings can help them:

  • Personalize offers even before the purchase journey begins;
  • Improve delivery and quality of product content offerings, especially as the number of SKUs they carry increases;
  • Unlock and unify customer data from disparate sources; and
  • Assist with in-store, mobile-powered guided selling.

ELIMINATING THE ‘SAFETY STOCK’ PROBLEM

Despite the introduction of cloud services, many merchants still haven’t taken the proper steps to give shoppers true “real-time” access to their inventory across channels. Many retailers still struggle with “safety stock” — additional quantities of an item held in inventory to reduce the risk that the item will be out of stock, according to Ken Morris, Principal of BRP.

“Let’s say I’m selling Tag Heuer watches — I must have a safety stock of two to account for this lag,”
said Morris. “If I have two or less items in a store, I have to tell corporate I have no items, because I have to account for the lag in updates to inventories between all the distribution centers and all of the stores. Although I may have two each in every store of 1,000 stores, it’s going to read as zero to someone trying to buy online and pick up in store.”

With a cloud service that incorporates data from all stores and distribution centers, retailers would be able to generate more accurate real-time stock numbers throughout the enterprise, without worrying about products going out-of-stock. Additionally, associates would be able to access this information quicker within the store, so they could assist consumers with real-time inventory data.

MOBILE APPS GUIDE IN-STORE SALES VIA SHOPPER DATA

Cloud platforms also can help retailers match products within the store to shoppers via guided selling. Morris described how an app recently designed for a BRP retail client offers guided selling in-store based on prior shopper behavior.

“Whatever they visited or put on their wish list or basket as they walked into the store, the app would guide them around to look at what they saw online and direct them with a Google map around the store,” Morris said. “This makes retail experiences way more relevant than most are today, especially because stores are changing. Having that data while the customer is in the store is key. To be able to affect the sale before checkout is what Amazon does every day online. They know who I am, they know what I buy, they know what I’m likely to buy and they help me through that sale.”

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Amazon’s “style assistant” offers guidance, product suggestions

Luxury Daily – Online retail giant Amazon is looking to become a key source of fashion inspiration and advice through the nationwide roll out of its style-centric Echo Look device.

Originally launched last year on an invite-only basis, the Echo Look uses machine learning and artificial intelligence to help consumers pick between outfits or add to their closets. The Echo Look has the potential to change the way consumers shop for fashion and interact with their wardrobes, opening doors for Amazon and its brand partners.

“Echo Look is a logical extension to integrate with Amazon’s commerce platform,” said Laura Sossong, consulting manager at Boston Retail Partners. “It’s the perfect complementary offering to stimulate incremental sales and create cross-selling opportunities for Amazon’s existing fashion pieces and Alexa technology.”

“Fashion marketers will absolutely look to leverage Echo Look’s Style Check function to boost sales and increase exposure to their brand offerings,” Ms. Sossong said. “The social component of the device will allow sharing of look books, raising awareness and demand for labels and trending merchandise across social communities.”

“Playing upon successful components of social media, Echo will bring outside influence and inspiration to a consumer’s closet,” Boston Retail Partners’ Ms. Sossong said. “It will promote social shopping by introducing shoppers to new style ideas and brands that inspire purchases.”

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Kennedy: ‘Lab’ developing ‘socially responsible algorithms’

Daily Gazette – I don’t mind that Netflix has me pegged as liking British police dramas or preferring series with strong female leads. But would I want my supermarket loyalty program to text me personalized product recommendations after I was “recognized” walking into the store?

Both are examples of using Big Data – our online clicks, visits and signups – to create algorithms that claim to know us and try to predict what we want. String algorithms together and you get artificial intelligence, or the science of making machines do things “intelligently” — that is, in ways that humans would.

AI, as it’s known, is top of mind with many retailers. Consultant Boston Retail Partners predicted last year that 45 percent of retailers will utilize AI by 2020, most to optimize their online interaction with customers.

Read Full Article: Kennedy: ‘Lab’ developing ‘socially responsible algorithms’

Fashion aggregators duke it out in a crowded market

Glossy – Google “Balenciaga sock boots,” and a line up of different retailers arrange themselves on the results page, all offering the same item for the same price. If you have the $995 needed to actually make the purchase, you’d be faced with options to buy from Nordstrom, Net-a-Porter, Farfetch, Ssense, Bergdorf Goodman, Matches Fashion, or Balenciaga’s own e-commerce site, in that order. Tweak the search — remove “sock,” for instance — and the same retailers show up again, this time in a new order.

Who ends up making that sale, and why, is a question marketers at emerging luxury marketplaces like Farfetch, Net-a-Porter and LVMH’s 24 Sèvres are fighting to solve. It’s crucial, since they’re largely competing on the same inventory, save a few brand or collection exclusives here and there.

Paid search drives business, but for these companies to move away from the expensive acquisition strategy, there’s more at work in the path to purchase than who appears first in a Google search.

“For this industry, it’s more nuanced than who can buy up the most SEO,” said Ken Morris, principal at Boston Retail Partners. “Luxury customers need to be taken care of and catered to, and there’s an different playbook to follow when it comes to both getting them in the door and keeping them there.”

“The luxury customer is not the average customer thanks to exclusivity,” said Morris. “There are savvy digital strategies behind sourcing potential customers by linking together lifestyles — people in certain clubs, yacht owners, travelers. You can sift through purchase histories across other industries and zero in, if you know how to use that data properly. It’s a matter of keeping track of these people, and then making sure the value of acquiring them is greater than the cost of doing so.”

“Taking care of the luxury customers you have isn’t a simple business. They need concierge, white-glove treatment and the people who provide it are the people who win,” said Morris. “This is incredibly important when you’re in a field where 20 percent of your customers drive 80 percent of your business.”

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Retail and Consumer Goods Analytics Study 2018: May the Best Insights Win

RIS News – Challenged at one end by digital behemoths and at the other by nimble, born-in-the-cloud startups, retailers and consumer goods companies are under tremendous pressure to deliver exceptional, personalized customer experiences that drive revenue and repeat business. The emergence of an analytics arms race has forced companies to find ways to expend their limited resources on technologies and applications they believe will deliver the most bang for the buck.

As retail and CG executives seek to build their analytics infrastructure, governance and talent pools, they must also rethink internal processes and shift their cultures toward an analytics mindset. And even as they gain capabilities, new market demands emerge that continually raise the bar ever higher.

But the analytics marketplace is also evolving rapidly, offering new capabilities such as artificial intelligence and machine learning, supported by cloud architecture, that carry the potential to turbocharge analytics programs. These not only discern data patterns more quickly, but sometimes even generate their own algorithms to further fine-tune output.

Comments from Ken Morris, Principal, BRP:

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“While advanced analytics are valuable for almost all areas of retail, they are most critical for replenishment and customer personalization,” says Ken Morris, principal at BRP Consulting. “Advanced analytics are necessary to predict inventory levels across channels that are complicated by omnichannel fulfillment.”

Although analytics is important to every aspect of retailing, “You can’t over-emphasize the customer aspect of analytics, as it is imperative,” says Morris. “Understanding what loyal customers like and what makes former loyal customers leave will tell you where you need to focus.”

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“Retailers are recognizing the value of centralizing applications in the cloud: speed of deployment, faster software updates, lower software, hardware and maintenance costs, and a realtime, single version of the truth,” says Morris. “Real-time visibility and access to product and customer information is critical to effectively executing cross-channel fulfillment services. Without real-time data, information provided internally and externally is out-of-date and, therefore, risks being inaccurate and out of context.”

Read Full Article: Retail and Consumer Goods Analytics Study 2018: May the Best Insights Win

The Role Artificial Intelligence in Improving Customer Experience

CustomerThink – We have all heard or read a lot about artificial intelligence. It is a controversial topic with many fearing that it may result in unemployment for humans. However, the big question is, what is artificial intelligence and what does it entail? Artificial intelligence (AI) is in other terms known as machine intelligence. This intelligence is demonstrated by machines which are programmed to perform tasks that humans would otherwise undertake.

The artificial intelligence history can be traced back to 1956 when it was first introduced as an academic discipline. Over the years, artificial intelligence research has been facing some drawbacks which relate to knowledge, reasoning, perception, and the use of natural language. During my research, I came across companies that are considered the biggest players in AI technology. These companies include Amazon, AlBrain, Anki, Banjo, Apple, CloudsMinds, Facebook, and Google.

However, one major thing I realized is that this technology is starting to replace humans in the business world. According to experts, AI has the potential to boost the economy but also bring a negative effect to humans in the job market. Companies have started relying on this technology when it comes to customer satisfaction, as we will discuss below.

In a recent study conducted by BRP Consulting, it was discovered that in the next three years, there will be a 45% increase in the use of AI by retailers. It is expected that retailers will use the technology to improve customer experience.

Read Full Article: The Role Artificial Intelligence in Improving Customer Experience