2019 will be the year that retail changes, if you ask TheCurrent Global. “The customer is just craving for evolution of retail, And they’re really craving for the retailers to give it to them,” the consultancy firm’s CEO and co-founder, Liz Bacelar, told FashionUnited.
Today’s consumer understands certain elements of the current retail landscape: e-commerce as a means of convenience, brick-and-mortar as the traditional method and new artificial intelligence technologies popping up as a means to keep retail innovative and aim to blend online and physical commerce.
Retailers are quickly trying to learn ways to integrate new data and technology into their channels to optimize the customer experience. “We see clients talking about it through the years, but this year there’s a sense of urgency for action,” said Bacelar.
She explained that the goal for today’s retailer is to created a retail space where customers walk in and immediately understand the brand’s mission and are marketed the products they actually want. And this all relies on retailers having a plan.
While consumers are craving an evolution within shopping, retailers are still struggling to determine the way forward to incite proper change.
Scott Emmons behind Neiman Marcus iLabs when he joined TheCurrent Global as CTO, as he realized that in today’s market, retailers are unable to evoke change using internal teams.
“I don’t think any retailer is purposely getting in their own way, every retailer is trying to do the right thing,” he told FashionUnited.
The corporate structure of large scale retailers is not designed for the evolution that retail needs. Emmons cited legacy systems, budget cycles and siloed decision making as hindrances to the innovation process. He said, “If you use just your in-house resources, you just keep repeating the same thing.”
“There’s a culture of excuses about how ‘we cannot get this done,’ ‘we don’t have the resources,’ ‘we don’t have the time,’ and ‘it’s never fast enough,’” Bacelar added. “Internal teams are never going to be perfect, the culture of retail will never allow that to happen.”
According to Bacelar, the day-to-day tasks required for retail operations interfere with the time needed for discovery and education on new technologies and retail innovations. She created TheCurrent Global as a way to dedicate an entire company to fostering the retail evolution.
And what is changing? Consumers have changed drastically - now more informed on what they want and ways to attain wants. The store is no longer inherently a place for discovery, as shoppers know about products before even entering. There are new ways to market to consumers of 2019, through making the store a place of discovery, feeding on the human instinct to search for an emotional connection and speaking to consumers as individuals, rather than parts of a whole.
In 2018, the integration of visual search tools to e-commerce sites was a huge step towards helping consumers find and buy products. Major retailers including Amazon, Ebay and Farfetch brought such tools onto their platforms, allowing shoppers to search using an image of something they liked and find a product to purchase through the respective retailer.
While visual search tools add ease to finding and purchasing a product, they don’t aid in discovery of new wants. Discovery is an area of opportunity.
“Amazon, the threat everyone’s afraid of, is a great place to go if you know what you’re looking for,” said Bacelar. “Amazon will never be a great discovery retailer. That’s the Trojan horse right there for everybody else, for them to fight to be counter to that. How can you always feed discovery, inspiration and emotion?”
A return to physical retail
In recent years, retailers invested most of their time and expenditures into growing e-commerce and differentiating themselves for digitally-native shoppers. Despite the drastic growth rate of digital retail, physical retail still generates the majority of revenue for most retailers. Emmons pointed out that in his last year with Neiman Marcus, it generated 38 percent of its total revenue from e-commerce sales - leaving over 60 percent of revenue attributed to physical stores.
“Physical retail is the future,” Bacelar said. “We, as humans, will always seek the past while moving to the future.”
Bacalar pointed out that despite today’s exponential curve of technology in which change is accelerating and technology is integrated into every single aspect of life, people crave analog. It encourages emotional connections and a break from digital. She said that “one of the most ultimate luxuries today is privacy and time,” and allowing consumers a break from digital allows this luxury.
What the customer experience actually means
“The biggest miss in retail right now is a misperception in what customer experience actually should be,” Bacelar said.
Retailers take measures to cultivate the consumer experience in both stores and online, vying to provide a comfortable space that will entice them to shop. However, TheCurrent Global sees that a common mistake made in retail is a customer experience that is more of a fleeting ploy than a long term investment.
“What [some retailers] actually want is a PR moment or an event, and the customer experience should be looked at as a relationship,” Bacelar said.
Emmons added that along with this, retailers don’t often realize that the consumer is not a persona or “cookiecutter,” and no single experiential solution is right for all shoppers. “They need to figure out ways to use technology, data and AI capabilities to personalize and customize the experience for each person when they walk in the store,” he said.
“And personalization addresses time, which nobody has today.”