Everyone knows that the retail industry is being transformed by digital, analytics and big data. Winning requires continual data-driven experimentation and transformation.
Shortened time from idea-to-app is a constant challenge.
Evidence of this “digital disruption” by category are mounting every day. Wal-Mart closes 269 stores as it retools portfolio to compete with online natives like Amazon.com. Macy’s said that it will shutter over 36 stores as store traffic declines faster than expected, and Finish Line said that it would close 150 stores by 2020. Gap, J.Crew, American Apparel, Sears and Kmart are all facing similar headwinds.
Starbucks CEO Howard Schultz laid out his thoughts on the future prospects for retail business, “three years ago we began to envision that there would be a seismic change in consumer behavior, and that seismic change was due in large part to e-commerce, omni-channel and smartphone shopping.”
It’s fascinating to watch retailers trying to shift tech/platform strategies to deal with digital disintermediation, showrooming, asset-light models, physical-to-digital channel integration, mobile shoppers, same-day delivery/fulfillment, programmatic targeting, online native models and now the new buzz.. virtual and augmented reality.
Several retailers have invested in Big Data and Hadoop platforms to mine massive volumes of structured transactional, operational data and unstructured data—web logs, clickstream data, geo-location data, social interactions and sensor data.
While most retailers understand the mega-shift and seems to know what to do….they are unable to execute consistently or effectively. A talent gap in many cases. A platform gap in others. Others are hindered by legacy IT systems or don’t have the necessary technology capabilities in place.
I think the digital induced pain is going to get worse in 2016 and 2017. Consumers will continue to diversify their retail activity across channels in search of the best value, forcing retailers to spread out their digital investments. This puts additional stress on execution and leadership.
At the Analytics Executive Forum, I facilitated a session on Omni-channel analytics. It struck me how every leading consumer facing firm seems convinced that mobile is becoming the dominant B2C interaction channel. Mobile is the gateway to insight based marketing and the “always addressable customer”….
Insight-based interactions – The company knows who you are, what you prefer, and communicates with relevant, timely messages, using the power of analytical intelligence to detect patterns, decode strands of information and create meaningful offers and value.
The “always addressable customer.” This is a consumer who fits the bill on three fronts simultaneously: (1)
- Owns and personally uses at least three connected devices; (2)
Goes online multiple times throughout the day; (3)
- Goes online from at least three different physical locations
The opposite of insight-based is “spray-and-pray” marketing – The company has very limited knowledge about who you are, forgets what you prefer, and tries to reach you with off-target communications that alienate you – based on fragmented data, poor data quality and inadequate integration, resulting in confusing, chaotic interactions. A good example: “I have 2 million frequent flyer miles with your airline and still do not get any recognition, respect or value from this loyalty.”
As companies architect new insight based mobile use cases I suggest that they look at what is coming next. With IOS 7, Apple is delivering several new features – Passbook, Beacon.
Retailers, banks and other customer facing firms/brands better pay attention. 100+ million iPhones are automatically getting this feature with the new OS upgrade making this a mega-disruptor in the coveted target segment everyone is chasing. Read more
MULTI-CHANNEL is simply having multiple channels through which you buy, market, sell, and fulfill.
CROSS-CHANNEL has the ability to see all of a customer’s information across all channels enables more personalized offers based on their brand relationship.
OMNICHANNEL weaves all the touchpoints of the products and services of the brand into a seamless fabric of all phases of the customer’s brand experience.
Which one are you?
Let’s face it – The old uni-channel retail model is dying in some cases and changing in others. E-commerce is driving nearly all retail growth. Digital customers want simple, consistent, and relevant experiences across all channels, touchpoints, mobile screens, smart watches and other devices.