The future of retail: P1

<span>The future of retail: P1</span>
IMAGE CREDIT:  Quantumrun

The future of retail: P1

    The year is 2027. It’s an unseasonably warm winter afternoon, and you walk into the last retail store on your shopping list. You don’t know what you want to buy just yet, but you know it has to be special. It’s an anniversary after all, and you’re still in the doghouse for forgetting to buy tickets to Taylor Swift’s comeback tour yesterday. Maybe the dress from that new Thai brand, Windup Girl, would do the trick.

    You look around. The store is huge. The walls are glowing with oriental digital wallpaper. In the corner of your eye, you spot a store rep staring at you inquisitively.

    ‘Oh great,’ you think.

    The rep starts her approach. Meanwhile, you turn your back and start walking toward the dress section, hoping she’ll get the hint.

    “Jessica?”

    You stop dead in your tracks. You look back at the rep. She’s smiling.

    “I thought that might be you. Hi, I’m Annie. You look like you could use some help. Let me guess, you’re looking for a gift, an anniversary present maybe?”

    Your eyes widen. Her face brightens. You’ve never met this girl and she seems to know everything about you.

    “Wait. How did—”

    “Listen, I’m going to be straight with you. Our records show that you’ve visited our store around this time of year for the past three years now. Each time you bought a pricy piece of clothing for a girl with a size 26 waist that’s usually young, edgy, and skewing a bit towards our collection of light earth tones. Oh, and each times you’ve also asked for an extra receipt. … So, what’s her name?”

    “Sheryl,” you answer in a shocked zombie state.

    Annie smiles knowingly. She’s got you. “You know what, Jess,” she winks, “I’m going to hook you up.” She checks her wrist-mounted smart display, swipes and taps through a few menus, and then says, “Actually, we just brought in some new styles last Tuesday that Sheryl might like. Have you seen the new lines from Amelia Steele or Windup Girl?”

    “Uh, I— I heard Windup Girl was nice.”

    Annie nods. “Follow me.”

    By the time you exit the store, you’ve bought double what you expected to (how could you not, given the custom sale Annie offered to you) in less time than you thought it would take. You feel slightly weirded out by all this, but at the same time extremely satisfied knowing that you’ve bought exactly what Sheryl will love.

    OVERLY PERSONALIZED RETAIL SERVICE BECOMES CREEPY BUT AMAZING

    The story above may sound a bit stalkerish, but rest assured, it may become your standard retail experience between the year2025 and 2030. So how exactly did Annie read Jessica so well? Let’s consider the following scenario, this time from the retailer’s perspective.

    To start, let’s assume you have select, always-on shopper rewards apps on your smart phone, which communicate with store sensors immediately upon stepping through their doors. The store’s central computer will receive the signal and then connect to the company database, sourcing you’re in-store and online buying history. (This app works by allowing retailers to find out customers’ past product purchases using their credit card numbers—securely stored within the app.) Afterwards, this information, along with a fully customized sales interaction script, will be relayed to a store rep via a Bluetooth earpiece and tablet (or a wrist-mounted display if you want to get super futuristic). The store rep will in turn greet the customer by name and offer exclusive discounts on items that algorithms determined to be of the person’s interest. Crazier yet, this entire series of steps will take place in seconds.

    In particular, these shopper reward apps will become powerful tools for retailers with bigger budgets. They will use the apps not only to track and record their own customers’ purchase, but also to access the customers’ Meta buying history from other retailers. As a result, the apps thus can give them a broader view of each customer’s overall buying history, as well as deeper clues on each’s shopping behaviour. Note that the meta buying data not shared in this case are the specific stores you frequent and brand identifying data of the items you purchase.

    Finally, retailers who can afford massive square footage (think department stores), will also have an in-store data manager. This person (or team) will operate an intricate command center in the store’s backrooms. Similar to how security guards monitor an array of security cameras for suspicious behaviour, the data manager will monitor a series of screens tracking shoppers with computer overlaid information showing their buying tendencies. Depending on the historical value of the customers (calculated from their buying frequency and monetary value of the products or services they’ve bought), the data manager can either direct a store rep to greet them (to provide that personalized, Annie-level care), or simply direct the cashier to provide special discounts or incentives when they cash out at the register.

    By the way, in case you’re wondering, everyone will have the apps I mentioned above. Those serious retailers who invest billions into transforming their retail stores into “smart stores” won’t accept anything less. In fact, most won’t offer you sales of any kind unless you have one. These apps will also be used to offer you custom offers based on your location, such as souvenirs when you when you walk by a tourist landmark, legal services when you visit a police station after that wild night out, or discounts from Retailer A right before you step inside Retailer B.

    As for who will be making these apps—these Air Miles cards for tomorrow’s smart everything world—they will most likely be those existing monoliths like Google and Apple, since both have already established e-wallets in Google Wallet and Apple Pay. That said, Amazon or Alibaba can also jump into this market, depending on the right partnerships. Big mass market retailers with deep pockets and retail knowledge, like Walmart or Zara, may also be motivated to get in on this action. Finally, there’s always a chance a random start-up might beat everyone to the punch.

    THE RISE OF THE CUSTOMER EXPERIENCE REPRESENTATIVE

    So that Annie girl, even without all her tech-enabled advantages, seems a lot sharper than your average store rep, doesn’t she?

    Once this trend of smart stores (big data enabled, in-store retailing) takes off, be prepared to interact with store reps who are vastly better trained and educated than those found into today’s retail environments. Think about it, a retailer isn’t going to invest billions in building a retail supercomputer that knows everything about you, and then cheap out on quality training for store reps that will be using this data to make sales.

    In fact, with all this investment in training, working in retail may not be such a dead-end job anymore. The best and most data-savvy store reps will build a steady and loyal group of customers who will follow them to whichever store they decide to work at.

    IN-STORE AND ONLINE PURCHASES BLEND TOGETHER

    In-store shopping during the holidays or other seasonal sales events blows. Statistically, it’s been proven to be the worst thing ever. Have you seen Black Friday YouTube videos? Humanity at its worst, people.

    Aside from dealing with mobs, the thought of waiting in line for 30–60 minutes just to cash out will no longer be acceptable to tomorrow’s on-demand conditioned customer. For this reason, stores will gradually add “Buy it now” QR codes (or next gen QR codes/RFID tags) to their product stands.

    Moreover, customers will also be able to use their smart phones to make a one-click instant purchase of products they can find in-store. The products will be delivered to their home a few days later, or for a premium, nextday- or sameday-delivery will be available. No muss, no fuss.

    The savviest stores may even use this system to replace cashiers with digital receipt checkers/security guards/door greeters. Imagine it. You walk into a store, you spot that new hipster mug sweater you’ve been looking for everywhere, you buy it with your phone, you confirm your purchase by waving your phone over the digital receipt checkers/security guards/door greeters’ tablet (through a wireless NFC interface), then simply walk off while re-curling your thin moustache between your thumb and forefinger.

    These in-store instant purchases will not only drive impulsive buying behaviour for larger purchases (and hence generate massive amounts of actionable customer data), but they will still be attributed to each store the mobile sales came from, encouraging store managers to actively promote their use. What this means is that shoppers will be able to buy products online, while in the store, and it will become the easiest shopping experience ever. This is the beginning of the next trend in retailing and why you’re going to have to read part two of this series to learn all about it!

    RETAIL SERIES:

    Why eCommerce won’t kill hanging out at the mall – Future of retail P2

    Climate change spurs a DIY anti-consumer culture – Future of retail P3

    Next scheduled update for this forecast

    2021-12-25

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