The Retail Industry Is Facing New Disruptive Realities
By Stephen Wakeling, Phobio
The ubiquity of Amazon and recent announcement of the Toys ‘R’ Us closure offers a sobering glimpse of how the retail industry is radically shifting and transforming. Staying ahead of market trends and customer behavior is critical for any business to survive and thrive. However, retailers are facing new disruptive realities from three major influences: omnichannel experience, the growing Millennial workforce and innovative technology.
The Omnichannel Shift
Online retailers are changing how traditional brick-and-mortar retailers are going to market. The all-stars — Amazon, Google, and Apple — designed and established new customer expectations in retail. Over the last decade, these brands have been developing online experiences to create a competitive advantage over retail store locations.
Customers today don’t just want a flexible omnichannel experience, they demand it. It’s no longer viable to buy and complete transactions exclusively online or in-store. The flexibility to be able to start and end in any channel is a must. For example, customers want the convenience of buying a mobile device online and then being able to pick it up at a local store. They also want the flexibility to buy in-store but transfer the data stored on their old device at home and perhaps complete the trade-in online. Technology enables these omnichannel experiences and differentiates innovative retailers with the status quo.
Experiencing The Millennial Shift
Currently, 25% of the workforce is made up of Millennials. According to a ManpowerGroup study, this large swath is expected to comprise 35% of the global workforce by 2020. Millennials will not only change retail strategies and operations; they will heavily influence corporate culture and the technology and tools needed to conduct business.
In their comfort zone of smartphones, text messages, snaps, and tweets, Millennials seemingly eschew phone calls and email. Retailers must pay attention and evolve their approach to accommodate the changing times. The new way to navigate the workplace is through mobile devices, messaging apps and chatbots powered by artificial intelligence (AI). These enabling technologies allow employers to remain connected to the workforce and customers, and most importantly stay in front of market dynamics.
Better Employee Engagement = Better Customer Experiences
Giving employees a shared communication platform between business headquarters and retail locations provides instant access to success. Suggestions and collaboration are instantly initiated and fostered for a sense of shared identity and team building.
Synchronizing the physical and digital worlds provides customers with seamless omnichannel experiences that online pure players simply cannot match. According to a study conducted by Harvard Business Review, 73% of consumers use multiple channels during shopping journeys, which gives retailers an advantage. Further, customers typically spend 4% more in retail when using multiple channels, which justifies why omnichannel strategies not only are important to brands but to retail locations.
AI-Powered Chatbots
According to a study from Tata Consultancy Services, 84% of the companies surveyed see the use of AI as “essential” to competitiveness, while 50% view the technology as “transformative.”
Over the past 10 years, organizations have aggressively integrated point-of-sale systems and other platforms with the Internet, delivering omnichannel shopping experiences. Linking applications and systems has created robust knowledge bases that, when harnessed with AI and machine learning, can drive operational efficiencies, scalability and growth. Through chatbots, retailers can deliver instantaneous access to information in real time, powered by conversational language.
Chatbots are emerging in all areas of business, especially retail. Gartner reports that just over 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development by 2021.
The possibilities of chatbots are endless. They can be integrated with human resources systems, customer relation management applications, employee scheduling solutions and more to fetch information. Machine learning empowers chatbots to expand their knowledge base as more questions are answered. They can be configured to provide information related to personal schedules, policies and promotions.
Omnichannel shopping experiences, keeping pace with the needs of Millennials in the workforce (and as consumers), and integrating technology will enable next-generation retailers to flourish. Those that don’t will be chronicled as the next Toys ‘R’ Us.
Stephen Wakeling is a wireless industry entrepreneur with a 10-year track record of developing disruptive, technology-powered services. He is the co-founder and CEO of Phobio, a software development company that builds optimized software services to support wireless carriers and retailers. Phobio provides outstanding service and support to global retailers and technology companies, such as Apple, Verizon and Samsung.