The annual NRF Big Show has come and gone! Our Founder and CEO Akhilesh Srivastava flew out this week from our San Jose headquarters to join over 40,000 retail professionals from 100 countries in taking over NYC. Building on his insights from the show we picked out 6 Top Retail Trends for 2020 that really resonate with us – because they are all key drivers of our Intelligent Delivery Platform (IDP)!
1. Artificial Intelligence
“Technology enables us to understand so much more – in real time – about our business. When you combine all the information we’re gathering…you can create really powerful experiences that improve the lives of both our customers and associates.”
– Mike Hanrahan, CEO of the Walmart Intelligent Retail Lab
AI was everywhere at the Big Show – from foot scanners that can find you the perfect fitting shoe to facial recognition payment software and everything in between. It’s obvious that everyone from tech companies to clothing companies want in on the returns AI can bring to the table. Technology such as facial recognition and body tracking will play a huge part in the future of shopping. This video from Evan Kirstel on Twitter shows a customer making a 14 second stop to grab a snack in what looks similar to an Amazon Go type store. Customers clearly want less wait time and more convenience nowadays, as well as seamless integration with their mobile device.
However, the future of retail is not limited to customer-facing technology. Supply chain Artificial Intelligence was also big this year, with Supply Chain Workshop tracks like “AI – The new currency in supply chain” and “The data driven supply chain: How technology is powering change” prominent on the schedule. Of course this topic resonates with us, since Supply Chain AI is at the core of all FenixCommerce products. We’re confident that the ML database we are building – of real-world, cross-carrier, estimated vs actual delivery performance across the thousands of transactions per day that flow through our platform – will provide an increasingly powerful competitive differentiator for our clients.
2. Customer experience/ personalization
Customer experience and personalization has been a hot topic for the past couple decades. However in the past few years personalization technology has both become more ubiquitous online and more critical to creating a true omni-channel experience. Technology such as Augmented Reality paired with a customer’s mobile phone or an in-store kiosk allows companies such as Rolex to display how a product will look on the consumer prior to purchase. Nike is using similar technology to allow 3D personalization with their shoes, so you can see in real time how the shoes will look as you change colors and designs.
We love this stuff, but the ultimate customer touchpoint – especially for online purchases – is when your product finally ends up in the customer’s hands. The improved experience our clients’ customers get from seeing clear, accurate order cut-off times and delivery dates provided by Fenix is one of our foundational value props.
3. Customer Data
“Retail is a massive generator of data: 40 terabytes per hour. What will we do with all that data?”
– Satya Nadella, Microsoft
Data is everywhere. Across the board, retailers at the NRF agreed that they want to collect more customer data. Unfortunately, they also agree they are not always sure what to do with it once it’s collected. Nadella has the answer for that too, noting that “retail will use it to know its customers, empower its employees, create an intelligent supply chain, and reinvent its business models.” Currently, companies like Amazon and Target use purchase history data to recommend products we might be interested in, as well as finding intelligent pairings that other consumers often purchase together.
At Fenix our goal is to use Customer Data to improve a less-obvious but perhaps even more impactful business area: our old friend the supply chain. By analyzing customer profile, behavior, and loyalty data already in most eComm sellers’ possession – along with other existing data like inventory levels by fulfillment location, negotiated carrier rates, and operational overhead – we help our clients lower shipping costs, optimize order flow, improve warehouse operations, and of course improve customer experience. And with 66% of supply chain leaders being held accountable to CX metrics, that’s becoming increasingly important across eCommerce organizations.
“Eighty three percent of consumers say convenience is more important to them now than it was five years ago.”
– NRF Chairman Christopher Baldwin.
Consumers want their items as quickly and effortlessly as possible. Acknowledging this, retailers are offering same-day in-store pickup as well as in-store returns from items ordered online – turning the retail store into a virtual warehouse. Retailers are also leveraging other technology, such as augmented reality, facial recognition, body tracking, and others to provide the quickest and easiest brick-and-mortar experience possible.
That’s great for the “atoms” side of the business, but convenience is of course critical to the “bits” side as well. With 64% of shoppers looking for shipping costs on the product page, 77% abandoning carts due to unsatisfactory delivery options, and 76% looking for multiple fulfillment options at checkout, it’s no wonder that FenixCommerce clients who use the IDP to eliminate all of these inconveniences see average conversion lift of 10%.
“Retail is waking up to waste in its system and consumer desire for change. 73% of Gen Z consumers are prepared to spend 10% more on items with sustainability cred.”
– Kiri Masters, founder of Bobsled Marketing
Sustainability was one of the most debated themes across the concourse. PSFK Founder Piers Fawkes said from the stage that “in every conversation, the word sustainability comes up.” The themes ranged from sustainable delivery & packaging, to circular supply chains and eliminating return waste.
Returns alone create 5 billion pounds of waste in landfills, and 15 million metric tons of carbon dioxide (CO2) annually. According to a report by Statista, more than 64% of customers returned their items due to inaccurate online descriptions or failure to match their expectations. Product visualization is paramount to decreasing the number of returns, and creating a more eco-friendly online retail experience moving forward. Enter – 3D and AR visualization software from companies such as Threekit, who’s booth at the NRF was overflowing with demos.
6. Employee Empowerment
“I think our role, leading big organizations, is to make sure our teams have the resources, the clarity and really a whole system and process around them to make the environment work, so they can feel successful.”
– Jon Furner, Walmart U.S.
Employee empowerment has been a big topic the last couple of years. With automation and AI, we are seeing fewer and fewer employees performing simple, mundane tasks in retail. The growth of technology has allowed managers to slim down the workforce and has given employees vast amounts of information at their fingertips. “Giving data to employees” Said Nadella at the Big Show, “is the single most ROI intensive thing you can do.” And with the retail apocalypse reaching its peak, it’s time for retail stores to invest in their frontline. Customer experience and customer acquisition will be the driving force of brick and mortar stores going forward – and frontline interactions are critical to customer retention.
Companies like H&R Block are empowering employees with over 60 years of tax data, using IBM’s Watson to help sort through it all and give customers the best possible experience while doing taxes. Not only does this make the whole trip quicker for the consumer, it also instills confidence in the workforce – confidence to make quick and agile decisions in the consumer’s favor. That being said, it’s obvious that when employees are armed with data we all win.
This is a driving principle behind the Fenix IDP as well; while its customer-facing delivery dates and low shipping prices are improving sales metrics, the backend is exposing the data that makes these improvements possible to the seller’s operations team. That translates to the ability to tweak shipping-related operational variables like order cut-off times, lead times, carrier pickup times, operating days/hours, and other parameters on a fulfillment location basis; you can even take a particular location temporarily offline or tack an extra buffer onto it to account for unforeseen issues like extreme weather.
The IDP also empowers operational employees through its reporting, which allows them to identify order hold-ups in real time and even to look at shipment data over time to uncover potential operational process improvement or ship-cost-reduction opportunities.
What do you think about these trends? Please leave a comment below and let us know.