4 Realities Retailers Face in 2017: Digital Transformation, AI and More
Retailers are grappling with a myriad of challenges in 2017, from shifting consumer behaviors to the explosive impact of digital transformation.
To remain competitive this year and beyond, they’ll need to embrace many new realities.
Already, retailers are growing more skilled at providing the right customer with the right message — and offers — at the right time to generate the best results across sales and distribution channels.
Both stores and online shops are growing more empowered with data and a more personalized understanding of customers, gaining better understanding of customer preferences, and better leveraging tools and technologies to become truly customer-centric organizations.
And yet, there are still obstacles to address and new paradigms to understand, as these five retail and ecommerce experts attest.
Digital Transformation Requires Trusted Data
“Digitalization is massively changing all businesses in 2017. Retailers, both B2B and B2C, will have to deal with changes in the way their customers buy, communicate and search for information about products.
“When organizations think about digitalization, they consider their marketing and sales processes, develop roles, analyze user journeys and optimize web sites. But after the first web projects they realize that they won’t be successful without clean, consistent and connected data.
“While digitalization is key, I expect that the focus in 2017 will be on connecting the dots between data, IT and business departments, like sales and marketing.” — Michael Fieg, managing director, parsionate, an IT and ecommerce consulting firm
Physical Stores Will Evolve
Many online retailers are discovering they also need a physical space to truly touch the customer. Brands will incorporate technology to create a connected store designing a personalized shopping experience for their customers.
“While physical stores need to change, they will not ‘rip and replace’ their technology infrastructure, but rather will experiment with flexible alternatives. Since labor is the largest controllable non-product expense, retailers will move from labor scheduling to labor flexibility including cross-training associates and managers.
“There will be a decrease in traditional brick and mortar locations but an increase in physical presence with non-traditional formats like pop-up stores and mobile stores. Few retailers will reach a state of unified commerce, but all eyes will be on the few trailblazers that take major steps in this direction.” — Kathryn Murphy, VP of Product and Engineering, Salesforce Commerce Cloud
AI and Machine Learning Will Revolutionize CX
“The biggest theme for 2017 will be leveraging the newest artificial intelligence and machine learning engines to help connect shoppers with the products they’re looking for. This evolution means that all of those engines will only run at their best with great product data.” — Brian Parks, Vice President of Sales, Edgecase, a provider of product data enrichment technology
“In 2017, customer experience will evolve into Contextual Experience 2.0. The introduction of new technologies, like machine learning, virtual reality, chatbots and speech recognition, will drive this evolution.
“Organizations must embrace these trends and understand what they mean for them and their customers. I recommend appointing dedicated leaders responsible for customer experience and empowered to start prototyping with these new technologies.
“Retailers need to incorporate a flexible technology framework that enables the organization to react in an agile manner, e.g. micro services architecture. As customer behaviors are changing, they can only be competitive when adopting a mobile strategy.
“Product content will be dominated by video and graphical media nurtured by rich customer data leading to true contextual experiences.” — Frans Stijnman, digital strategy and customer engagement, Osudio, a European digital agency
Retailers Will Become Experimental and Innovative
“2017 will bring about more experimentation on the part of retailers to ward off competitive forces. We already see big box retailers experiment with smaller digitized formats, and brands testing out shop-in-shop, pop-up store, partnerships, and other non-traditional retail concepts.
“Innovating the physical retail experience leveraging technology will be how stores survive, and connecting disparate data sources will be the intelligence that fuels it. The next phase will take advantage of the applications enabling The Internet of Things, specifically those that are voice activated, to weave retail into every aspect of people’s daily lives.”— Julie Barile, Director Digital Commerce, Sophelle, a retail consultancy