Retaining customers in today’s ever-evolving world of retail isn’t easy. Even large retailers are struggling to deliver the type of seamless and exceptional shopping experience customers crave. But technology is having a transformative effect, creating new retail experiences that provide customers greater convenience and personalization. With new experiences, however, come rising expectations.
To keep up, retailers are being forced to make considerable tech investments or risk losing out to competitors who can. But how do you know which technologies to invest in? What should you prioritize today, and what can wait until tomorrow?
At IRCE, Brendan Witcher, principal analyst at Forrester, discussed the top tech investments for retailers in 2017 and shared the results of his annual survey. He asked industry professionals which technologies matter, which ones they plan to invest in and which ones they plan to implement.
Number one on his list was personalization – a topic that’s hot right now and has been for several years. According to Witcher, 89% of industry professionals say they are going to invest in personalization this year.
Why the continued focus on personalization? Why are 9/10 professionals making it a top priority? Because 77% of consumers have chosen, recommended or paid more for a brand that provides a personalized service or experience.
That number is huge and can’t be ignored.
And it’s not simply online that consumers are expecting greater personalization. Witcher’s survey found that this is the first year where in-store personalization has become a top priority. In fact, it was this focus on in-store personalization that pushed personalization to the number one spot on his list.
As more and more consumers shop online and are exposed to deeper, richer personalization, the more they will come to expect it everywhere else. Whether you’re multichannel or online, the need for personalization is real and the desire will only continue to grow.
The Omnichannel Experience
When it comes to online and offline shopping, the lines are beginning to blur. The multichannel experience is slowly giving way to the omnichannel experience, and as such, omnichannel investment is number two on Witcher’s list.
While it has been more popular in recent years, companies are not just focusing on omnichannel fulfillment but also engagement and a holistic view of the customer. They’re interested in providing better tools for the in-store experience.
Admittedly, the number of retailers investing in omnichannel might be small now – according to Witcher, only about 10% of retailers are focusing on it heavily. But it’s growing. Remember: The retailers who are focusing on omnichannel right now are the ones with the greatest number of customers – those who are now becoming accustomed to buying online and shipping to store or vice versa.
Such high-volume retailers are creating the new norm, setting a new standard for what customers expect, and this has a ripple effect. It begins to dictate the shopping experience for everyone else. As Witcher explained during his IRCE presentation, “Every time a customer is exposed to an improved shopping experience, their shopping expectations are reset to a new higher level.” Even now, there are shoppers today that have never known a world where shopping online wasn’t an option.
Witcher predicts the focus on omnichannel and subsequent investment in omnichannel will increase to about four times its current size within the next 12 months.
Despite being a common technology for some time now, analytics still managed to place third in Witcher’s list of top tech investments, proving once more how important data is to businesses big and small.
But Witcher explained how it’s actually real-time analytics that companies are after – those that help businesses operate in real time. He gave an example of a visual merchandiser wanting to move products from one position to another. Rather than moving the merchandise and waiting weeks for a report to analyze the impact, companies want to know beforehand what the impact will be.
Put simply, companies are looking to take the guesswork out of what they do and invest in predictive analytics – analytics that will help them make important business decisions and predict the best outcome based on their goal, be it an increase in topline revenue, customer retention or engagement.
Simmering Not Sizzling
Not every piece of technology caught the attention of marketing professionals. While the three above are seeing greater adoption and investment, Witcher’s survey found that the following technologies are simmering rather than sizzling this year.
Digital Store Investments: Not a lot going on here, according to Witcher’s survey. While the digital storefront is picking up, it’s slow-moving at the moment. From robotics to RFID, most of the investments here are in their very early stages, but we’re getting there.
Mobile: This one might surprise folks, but dig a little deeper and it’s not surprising to see why investment in mobile is down. Companies have been investing in mobile technologies for years, so we’re beginning to see that investment die down. However, as Witcher points out, just because investment is down does not mean spending is down. We’re now seeing a shift in resources (dollars) from technology to actual resources and labor.
Chatbots: Part of the wave of “new tech” chatbots are still very much in their infancy, at least in terms of investment – and that investment will continue to grow. It’s not hard to see why. According to Witcher, 52% of online shoppers are very likely to abandon an online purchase if they cannot find a quick answer to their questions. Marketing professionals are not willing to place their trust in chatbots just yet, especially when sales are at stake; however, chatbot technology is gaining traction. Watch this space.
Artificial Intelligence: While there’s no doubt AI will play an important role in the future, for now, investment from marketing professionals is low. That’s not to say companies don’t have a budget, but the emphasis is on other aspects right now.
The Not-So-Hot List
Rounding out Witcher’s survey are a list of technologies currently stagnating or seeing very little in terms of investment. They include the Internet of Things (IOT), self-checkout, social selling and AR/VR. But while these technologies aren’t commanding budget dollars now, that doesn’t mean they won’t be important in the future.
Just look at AR/VR. We’re only now starting to understand its potential use cases, especially as it relates to creating better, more personalized shopping experiences. I’m sure we’ll see more coming from that space as we realize those opportunities.
The Human Element
Technology will continue to play an integral role in reshaping how marketing professionals connect with consumers and how retailers achieve their goals, but being a good marketer and connecting with customers in the digital age also requires being more human than ever. The most successful marketers will be those who use technology to address and solve customer pain points in a meaningful way, not those who add new innovations just because they can.