Retailers across the world face an unprecedented pace of change. From how they acquire customers to how they structure a supply chain to how they think about the in-store experience – retail is quickly evolving to meet rapidly shifting customer expectations.
Some analysts and even leaders in the retail industry find these changes threatening, hunkering down for the “retail apocalypse.” No, this is not an apocalypse; rather, retail is experiencing evolution.
Change is good – it inspires betterment and fuels market growth. Retailers today have the opportunity to pioneer a new landscape: a highly personal, customer-centric retail world deeply rooted in technology. Powered by customer data and aided by machine learning, brands will discover new models and create new retail experiences that are deeply personal and distinctively human. This is not the end of days for retail; it is a new dawn.
To get there, retailers are evolving and adapting their approach to challenges new and old. Solutions will be a mix of technology, AI and human touch across the industry, in unique ways. PwC recently analyzed tech-driven approaches to retail, and in our findings, there are particular opportunities that will revolutionize retail.
- Soon, retailers will really know customers as individuals. Retail was an early adopter of data analytics, and brands often ask customers about preferences, many times using back-end data to learn more about interests and behaviors. Collect, analyze and apply insights gleaned. But that model is too slow for today’s consumer. Savvy retailers are tracking in real-time what customers are interested in and when and how they are buying goods. Soon, data paired with artificial intelligence can help retailers start anticipating needs well before the consumer’s own needs have fully emerged. By really knowing them, brands can forge real connections and an authentic relationship. If the notion of AI once made you squirm, it might now make you stand up and cheer. Artificial intelligence means less manpower on menial practices and more freedom for retailers to incorporate empathy, purpose and creativity in their business strategies. Humans get to be the difference makers.
- Stores are no longer just places, but experiences. The feelings retailers try to evoke from customers through marketing and products is now coming to life in stores. Stores are not warehouses; they are environments to entertain, educate and discover. Stores are soon to be home to dynamic experiences that build loyalty and affinity. The store of the future doesn’t have walls – virtual reality breaks them down and can help companies continually evolve and create a new experience over and over again. Stores can be open spaces to convene, to build community. And consumers will come – only 10 percent of core retail sales are online. Consumers aged 18–24 are more inclined to socialize at malls and shopping centers (44 percent) at almost double the rate of consumers overall (22 percent). People go to retail locations, and that will not change. The in-store experience of tomorrow will be shaped by data, improved by AI and made personal by humans.
- Retailers get to dramatically improve the single worst facet of the customer experience – or eliminate it entirely. The checkout line has seen little improvement over the last 100 years. Our recent analysis further highlights consumer frustrations with waiting in the check out line. If everyone from healthcare clinics to taxi cab companies can eliminate wait times, so can retail. Google just rolled out its Google Pay app for Android, creating a frictionless pay experience for its users. Mobile pay will likely be a mainstay for the retail store of the future – our research shows that 42 percent of U.S. consumers and 95 percent of Chinese consumers use mobile payment. Retail leaders like Apple and Wal-Mart are broadly experimenting with different self-scan and pay technologies. Amazon is piloting its revolutionary concept of removing the check out process entirely through intelligence embedded in the store, checking you out while you shop. These are all changes that retailers can really get behind because no one wants the last impression to be a bad one.
Retailers have more change, knowledge and tools to get the job done. Soon the industry will have the ability to focus more on the good, and weed out the disjointed, bulky and disappointing. As humans, focus can turn to the things that make a retail brand great – the purpose, the people and the customers.