Despite dire predictions, the retail apocalypse doesn’t seem to have materialized.
“Retail has demonstrated resilience in 2018,” said Sucharita Kodali, vice president and principal analyst at Forrester Research. Kodali shared her insights on the “State of Retail Innovation 2019” at NRF 2019: Retail’s Big Show in New York City on Sunday, Jan. 13.
Despite an interest in innovation that can boost revenue growth, many retailers also seek to reduce costs — particularly IT costs.
“Everybody wants to innovate, but as inexpensively as possible,” Kodali noted.
So, as the forces around retail continue to push and pull, what innovations will retailers embrace in the coming year? Here are four areas Kodali pointed to as likely to see investment or interest in 2019:
Shopper Personalization and the Data Privacy Dilemma
Many shoppers, both online and in-store, are looking for more personalized shopping experiences. In order to deliver these experiences to customers, however, brands will need to leverage customer data, which can prove a sticking point for shoppers who are wary of handing over personal information and skeptical of how it’s being used.
While many consumers are ok with retailers having access to purchase information, most feel that other sources of information, such as social media, should be off-limits.
“It is incredibly important to continue to collect information, but in a way that is useful to retailers and is not invasive or useful to consumers,” said Kodali.
Moreover, 17 percent of consumers in a recent study by RetailMeNot reported that they don’t want any information collected or tracked.
“It’s important to recognize that and to make sure you’re not personalizing to those people,” said Kodali. “Often, as marketers, as retailers, we forget that consumers belong to different segments, and you have to adjust. That is the very heart of personalization.”
For this reason, data security has emerged as the No. 1 priority for retailers in the coming year.
“Data security is hugely important, not just because of the compliance needs of retailers and brands, but also because of the legislation and the requirements of everything from the California Consumer Privacy Act to GDPR, and probably a lot more coming down the pipe,” said Kodali.
Mobility Enhances the In-Store Experience
While the use of mobile devices in stores hasn’t evolved much in recent years — consumers still mainly compare prices, read reviews and research product info on their phones — shoppers have started using phones and other devices to augment their interaction with retailers outside of stores, at home or traveling to a store.
In particular, Kodali noted, shoppers are using store locators less and instead are zeroing in on locating products once they’re in the store.
“Consumers are using phones to support that store experience, and that’s part of the reason that the retail apocalypse didn’t quite happen the way it was projected to happen,” said Kodali. “Consumers are going back to the store, and mobile devices and investments in mobility actually have supported that outcome.”
With this in mind, retailers can still find a few points of opportunity with mobile. Among them: delivering frictionless feedback to store associates and the corporate office, real-time monitoring, and supporting self-service.
But key to enabling these abilities is to think beyond the consumer.
“It’s also incredibly important to think about that mobile experience with respect to how it supports your store associates,” said Kodali, noting that this can be associates in a physical store, staff at corporate headquarters, store operators, suppliers and a huge number of other employees that help to support the in-store experience.
Don’t Bypass Omnichannel Innovation
While the cross-channel path may seem well trodden, the truth is that the journey to a truly mature omnichannel experience is still very much ongoing.
“Even with things like buy online, pick up in store or endless aisle, there are very few retailers that have fully implemented them yet,” said Kodali. “As consumers continue to expect these solutions, retailers need to continue to invest in them.”
She noted, however, that despite expectations, it can often take years for brands to perfect the omnichannel experience for customers.
“It’s a journey, not a destination,” said Kodali.
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