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The Future of Retail: Insights from NRF 2020
Early this year, Salesforce’s Director, Retail Industry Strategy James Johnson headed to New York for the biggest event on the retail calendar, NRF 2020. Here, he shares what he learnt about the future of retail.
The speakers and learnings from NRF 2020 solidified four ideas for me, which – despite the event happening on the other side of the world – should be a priority for every retailer in Australia and New Zealand to know and act on:
- It’s not all doom and gloom for retail, with omnichannel leaders revitalising store experiences to delight customers – which pays off.
- Data availability and engagement expectations are changing the role of store and the instore team.
- Sustainability and trust are core to customer focus.
- Adaptation is part of surviving and thriving.
As retail continues to evolve, it becomes more complex – 7.7 billion people are touched by retail today, with USD26 trillion in global revenue.
While this is an incredible opportunity, it can also feel daunting — where do you start tapping into that vast market?
Let’s start by digging deeper on those four key takeaways.
1. Omnichannel blur revitalises store experiences
The retail apocalypse is not upon us. Yes, we’ve seen major retailers close stores and decrease their footprints. But generally, the nature of the physical store is changing, spurred by a need for greater connection between physical and digital experiences with consumers now traversing 7.6 touchpoints in the average shopping journey.
Further proof of omnichannel blur – stores that offered click-and-collect scored an 18 percent higher share of digital revenue in the five days leading up to Christmas than those that didn’t.
Despite having an infinite number of products available at their fingertips, eight in 10 shoppers visit brick-and-mortar shops to discover and evaluate new products. Being able to touch and feel products is still the top reason to head to a store, and 62 percent of shoppers walk out with more purchases than they intended.
So, despite headlines touting the end of brick-and-mortar stores in the era of e-commerce, physical touchpoints and in-person experiences still play an important role in the new, nonlinear shopper journey. Physical stores remain an irreplaceable mainstay, but the role of the store continues to evolve as shopper behaviour changes.
2. Data and engagement expectations are changing the roles of the store and staff
Every successful retail business needs to be built on customer data. But having data is one thing – using it well with customers’ consent is another. Being able to unlock data to tailor physical and digital touchpoints to your customers where they are is the key to creating lasting relationships.
This is changing the roles of stores – physical and digital – and retail workers. Every interaction needs to be relevant and personalised, whether it’s with a chatbot, in a store, or ongoing loyalty communications.
Overall in-store experience is now cited as the #2 reason to visit a physical store, and with shoppers able to buy products from third-party apps and websites, a brick-and-mortar store is one of the few places where brands and retailers can directly control the customer experience, deliver tactile interactions and truly differentiate their brand from the rest of the market. Retailers that don’t differentiate – that get stuck in the middle – don’t give customers a reason to shop with them.
This means, in many cases, employees in physical stores aren’t there to process transactions any more; their roles now focus on using insights to drive personal engagement and improve service – to differentiate the brand.
3. Sustainability and trust are core to customer focus
Shared values between the retailer and the consumer are the basis of trust, and more than half of shoppers say sustainability and ethical business practices matter more now than they did a year ago.
Customers crave genuine, meaningful relationships with brands, and that requires alignment on values.
A powerful example of an Aussie retailer showing the way on alignment with customers’ sustainability practices and beliefs is a Salesforce customer: Country Road Group. Country Road’s products include recycled denim and nylon, as well as traceable merino wool.
It’s Chadstone store, which opened last year, is a showcase of sustainable design and scored a 5-star Green Star rating from the Green Building Council of Australia.
In the fit-out, fixtures are a stone-like composite made from recycled yoghurt containers, fitting room accessories are made from recycled ocean plastic, the carpet was fishing nets in its former life, parquetry flooring is second-hand and the walls are clad in recycled paper.
As part of the sustainability push, Country Road has also partnered with fashion rental site GlamCorner.
4. Adaptation is part of surviving and thriving
Adaptable retailers will thrive now and in the future – meeting and exceeding customer expectations is key to success, and those expectations are continually changing.
Steve Kulmar, Founder of RetailOasis, shares six characteristics of adaptable retailers:
- Brand love: they build strong brand identity.
- Agility: that strong identity doesn’t hold them back from change though – these retailers move quickly and decisively.
- Consumer-led: the customer’s needs and wants are always at the centre, and every function of the business revolves around that customer.
- Omnichannel: no interactions are siloed – there’s not an in-store commerce team, and e-commerce team and a third-party team, because the entire business is omnichannel, always.
- Evolving: consumers are shifting and the adaptable retailer must constantly anticipate and quickly move.
- Betting big: they invest in many big plays simultaneously.
I’m excited for the future of retail – with consumers expecting the world and shopping elsewhere if we don’t deliver, differentiation is more powerful than ever and opportunities abound.
James Johnson is Director Industry Strategy for Retail at Salesforce. With almost 20 years global retail experience as a practitioner (Michael Hill, Colorado Group and Virgin), a consultant (EY) and technologist (Demandware and Salesforce), he understands the challenges that retailers face and helps retailers meet their customer’s needs by sharing insights, experiences, best practices and stories.