Innovation in the retail industry in 2018.

I see the coming year as a key 12 months in the history of UK retail. At a time when retail sales are unstable due to geopolitical issues and inflation is seeing price rises outstrip wage growth, it has never been more important for retailers to adapt and improve. The most important word in retail for 2018 should be innovation. Here are five things I see happening as retailers get smarter and use technology more effectively and efficiently.

1.The rise of the bots

There will be a proliferation of AI and chatbot adoption in retail as time-sensitive consumers want immediate answers to the more basic questions they wish to ask. This means positive perception of bots will increase in 2018 but the challenge for retailers is to consider how they personalise this tech to relate to their brand. When used for product searches, bots can generate greater levels of consumer data, which can then be harnessed to understand customers better. Analytics built around this give a true 360-degree picture of a consumer's habits wherever and however they shop. Retailers need to innovate at a pace relevant to younger generations. Doing so will ultimately drive top line numbers and gain them new custom.

2. A resurgence in customer service

Customer service is just one way to understand consumers better but we know from our recent Retail Redefined report that a common and important part of the retail experience for both Baby Boomers and Generation Z was good customer service. Using technology to augment this can assist with defining such a positive experience. At Retail Week recently, a lot of talk was around understanding the customer journey better. For example, look at the cross-sell and experience opportunity when someone places a click and collect order. Having the right in-store technology can tell employees what has been ordered, show past purchases, examine shopping histories and check consumer profiles allowing staff to offer help and advice accordingly, where appropriate and depending on what has been bought. It may sound easy but the execution is hard. However, such added-value boosts customer experience and drives loyalty.

3.Spending IT budgets more wisely

I regularly hear how every retailer is looking to cut costs. Technology, when put in place correctly, can assist with that without compromising a business's ability to operate. CTOs are rationalising the day-to-day IT lights-on service management piece while balancing their need to invest in digital and bring new innovations in-store. One of the elements here will be increasing the availability of Wi-Fi in-store, and wider store engagement. Younger audiences want to browse the internet while they buy and those brands who can meet what is such a simple and basic technological need will succeed in customer retention.

4.Increasing adoption of mobile and its payment technology

If you look at China, the use of smartphones to make purchases and payments is the norm. In the UK today, it's very much the habit of early adopters and that trend will continue and widen. The stats will all increase in regard to the number of consumers using mobile technology to shop or engage with brands, as the shift to mobile is driven by habit. This means asking different questions: Are your customers more likely to spend via mobile in the evening as they have access to more devices? How are they reaching you? What channels are they using? This is an opportunity for retailers to analyse those behaviours and exploit them. Truly understanding the analytics behind the journey on mobile and using it to inform decision-making on the front end will be key.

Mobile innovation needs investment to keep up with changing buying habits, especially as we see mobile as a sales channel that will proliferate.

5.Bricks and Mortar to become fashionable again

I personally think there's lot to learn from some of the checkout-free store experiences and trials starting to appear. It says to me that consumers increasingly want a rapid and frictionless experience, with as little interaction as possible. We all know that will be driven from endless data sets collected on consumer's behaviour. For me it's about relevance and giving the consumer the practicality to make the decisions on how to shop with you. You shop at a local independent because of the great advice and the personal touch. But do you need that service for routine purchases? Consumers also increasingly want to know more about the source of their clothes and food so perhaps this will be the year of true "brand-parency" and the instore experience and customer service element is a great way to drive that information and loyalty.

 

To find about how CenturyLink can help you with your technology and innovation in 2018, get in touch here.

 

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