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The Future of Retail

This is a very short and rushed blog post, its just that I am currently at Marketing Week Live 2012 in London and having an experience that I really wanted to share.

When the folks from Collaboration Matters initially reached out and asked me to support an event they were planning for #mwlive2012 I have to confess I was rather sceptical. They wanted to create a new retail experience that blended the physical with the virtual;

  • To build a retail space within the #mwlive2012 tradeshow floor which integrated socialmedia (through various screens) into the retail experience.
  • To simulate the behind-the-scenes enterprise (but on full display) and demonstrate how an integrated collaborative system, like IBM Connections, could allow a retailer better interact-with and respond-to their customers.

As the day progressed (we have completed Day 1 of 2) it became increasingly clear that there was something really interesting in this model. That it could completely transform the relationship between retailer and customer. What was even cooler, is that many of these observations & suggestions came from event attendees; models, designers, marketers, buyers, and technologists. An eclectic group of people that would normally never get the chance to interact, let alone innovate together. I know as an IBMer, I don’t normally get a chance to talk with models or shoe designers ;-)

Just a few of the ideas/scenarios that were discussed during the event:

  • For the customer: you never have to shop alone! For the women out there you will know what I mean :-) There is nothing worse than having to buy a new pair of shoes or a dress without having a girlfriend there to share her opinion. Imagine a new shop experience where social media was integrated at every stage of the process; including allowing for high-quality photos to be taken and shared from the dressing room. So now you can have your friend, irrespective of where she it located, share her opinion in real-time on a potential new outfit or pair of shoes.
  • For the retailer: you don’t loose a client because they can’t make a decision! How often has a customer come into your shop tried on 10 pairs of shoes, but just couldn’t make that final decision without a friend giving their choice the thumbs up. They leave the shop planning to come back in a few days later with one of their friends, but just never get around to it. Or perhaps find somewhere else to buy the same product. It’s in your interest to give the customer access to whatever they need in order to make a decision.
  • For the customer: The shopping experience starts from desire and doesn’t end until the cash register goes “ding”! You get an integrated shoping experience that allows you to make the retail journey at your own pace. From the moment you get that party invitation from Mr. Dreamboat, through the discussion around what shoes will go with what dress, until you narrow down some candidates and are ready to start your physical shopping experience. And throughout this time your favorite retailer can provide appropriately-timed, relevent, and non-invasive feedback and suggestions. This interactive experience continues to the physical shop, where the shop assistant knows that you are coming to the shop and what you are planning to try on. And so on. A wonderfully decadent shopping experience. And who say’s the physical retail space is disappearing :-)
  • For the retailer: Your staff become a key part of the shopping experience you deliver! By engaging with external socialmedia through your involvement in the “retail journey”, you are gathering deep insights into the motivations and desires of your customers. However, you also have a hugely valuable resource within your enterprise… your staff. Through the enterprise collaboration system they can share their feedback (and those of the clients they are physically interacting with) and this can in turn be used to generate hugely valuable insights. Particularly when combined with transactional data, such as purchases. Adding in gamification in order to incentivize this feedback can generate massive value out of the knowledge resources you already have “untapped” within the enterprise.

And these are just some of the ideas that have been buzzing around the place! It’s been fun, fun, and more fun!

You can find some related information about the event on:

4 Comments to “The Future of Retail”

    
  1. richardstacy
    June 29, 2012 at 12:18

    Marie,

    Good observations. For me the most important is your referal to the customers’ journey and the fact that “your favorite retailer can provide appropriately-timed, relevent, and non-invasive feedback and suggestions.” As you said at the time, the big prize for the retailer (or brand) is the ability to reach back as far as possible into that journey. This is clearly a significant techy challenge, involving pretty high-powered analytics and customer contact technologies – especially in order to do this at any sort of scale. As a non-techy I tend to blindly dismiss the technological challenges and make the assumption that ‘the geeks will fix it’ – because they usually do.

    But as a non-techy I also tend to identify the social and behavioural aspects of making something happen – and these are also considerable. It is clear that social data presents huge opportunities for brands to know an awful lot about their consumers. But it is also becoming clear that consumers have not given permission to brands for them to know this. Consumers very rarely say “isn’t it fantastic that a brand knows me so well (almost like a friend) that they are able to reach out to me with exactly the right thing at exactly the right time.” Consumers will never see a brand as their friend (this is just a fantasy of marketing directors and Facebook). Therefore if brands try and behave like their friend or demonstrate they have a level of knowledge about them equivalent to that which is only shared with a friend, their reaction will be along the lines of “Go away – I don’t like brands that spy on my life”.

    Working out the terms of the ‘permitted relationship’ between brands and consumers and getting the intervention in the customer journey just right is a therefore very tricky business – both technoligically and socially. I suspect the social challenge will be greater. Brands need to learn new codes of behaviour – and key to this is recognising the boundaries. Conversations are defined by boundaries and exclusion. Just because you are talking about someone doesn’t grant permission for the person being talked about to enter that conversation or listen to it – often quite the reverse.

    At the end of the day, it may all come down to ownership of the data. The relationship between brands and consumers is changing and the question, in this new relationship where consumers have more independence, is “who gets to keep the data?”. Traditionally brands have had it, but in the future it could be that the consumers will have it, or at the very least demand custody of it.

    At this point I sense a longer blog post brewing about defining baoundaries and contact points in the new relationships between brands and consumers! Will alert you to it if I actually manage to bottle it.

    Anyway – good to have met. Have subscribed to your Ramblings and Ruminations.

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  2. Marie Wallace
    June 29, 2012 at 12:37

    A great set of observations Richard, I particularly like your emphasis on the “permitted relationship” and the “codes of behaviour”. In my opinion this totally hits the social challenge on the head. I have a particular interest in the whole area of privacy and despite being an analytics geek I frequently get uncomfortable with the potential invasiveness of consumer analytics.

    I believe the key will be transparency between brand and consumer. The brand needs to make it very clear what data he is sucking down about me and what he is doing with it. I also feel it needs to be more about opting-in and not opting-out. I need to choose which brands I want to share information with, and what I am happy for them to do with that information. If the reward outweighs the risk, then I am likely to be happy to share certain information.

    The brand also needs to appreciate that he isn’t my friend :-) They are a company I choose to interact with because I get a service or product from them, and they get money from me. Nothing more!

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    • richardstacy
      June 29, 2012 at 14:32

      I think you are right about transparency – but the danger is that this could end up being a bit like Gorbachev’s Glasnost (or was it Perestroika?) People are never satisfied with a little bit of freedom and ultimately this lead to the collapse of the whole system. If you make things transparent it may become apparent that there is no-way you can really square-off the risks and rewards scenario. Brands will never be able to offer sufficient rewards to offset the risks. What happens instead is that the brand that offers no risk (i.e. takes none of your data) then establishes the key competive advantage. Currently this is more likely to play-out at the level of the data-brokers (i.e. Facebook and Google) before it gets to the brands. I am convinced that what will sink Facebook will be something that does exactly what Facebook does – with the only difference being that it promises total user ownership of data. Such a competitor won’t generate the revenue that Facebook currently does – but it won’t need to because its revenue requirements won’t be linked to supporting a wildly over-inflated valuation. Facebook is only some geeks and some server space – these are not premium or scarce assets.

      Bit more on this here http://www.huffingtonpost.com/richard-stacy/facebook-google-lack-of-social-consent_b_1028683.html

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