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RETAIL PERSPECTIVES FOR 2016

Web-to-store will become the norm

It’s impossible to imagine what retailing will be like over the next ten months without mentioning web-to-store This is because the three key conditions for generalizing the process have finally materialized! First of all, consumers are asking for it. Mobility is now a fact of life and has become resolutely cross-channel: it mixes Internet with the brick-and-mortar store for purchasing and/or finding out information. And the combination of physical entities and digital means is precisely the core of web-to-store. According to the latest Mappy/BVA barometer, 43% of Web users have already taken advantage of this service, and 85% plan to do so in the future! Next, in the name of “dual awareness,” a growing number of retailers are learning to appreciate what web-to-store really means. They have come to realize that implementing this service is both an undeniable competitive advantage and a significant economic driver. This is shown by the latest Fevad report, where 58% of store owners noted that this system led to an increase in turnover on physical sales in stores.

Finally, technology is up to the challenge. Today, distributors have access to tools that give them a precise, real-time view of available stocks in the store and in the warehouse and from suppliers. Because knowledge of stocks is thorough and up-to-date, web-to-store access is no longer for the behemoths of distribution only.

The curtain falls on Big Data in retail

Long in fashion, Big Data is no longer a favorite with retailers. The reason? Most certainly the realization that accumulating data without using it quickly becomes a sterile operation. So, we no longer talk about Big Data, but merely…data! It’s a way to leave marketing hype behind and return to the concrete customer relationship and sales, because the question that worries retailers is the following: “How can I digest all my data in a way that will make decisions easier, enrich the customer experience and improve my responsiveness?” The answer to this question is pending because data science experts, who are described by the Harvard Business Review as the “sexiest” professionals of the twenty-first century, are increasingly rare.

More storytelling for a better customer experience

In 2016, points of sale will double their efforts to reinvent the customer experience.

But they will be reinventing it with storytelling, a technique as old as humanity itself! The sales area will be used less as a place for exhibiting articles and more as a real theater where items will be arranged according to a veritable scenario. Will we see the generalization of compartmented points of sale along the lines of Public Factory, the New York store with a sales area shared by several brands? Or will stores be inspired by Stories, another American retailer that regularly offers a series of different products based on different themes? It’s too soon to tell. However, what is certain is that stores with digital features (virtual reality) and supported by the social networks will be a strong trend among retailers in the coming year.

The rush to manage customer commitment

In 1919, a British geopolitician said: “Whoever controls the heartland controls the world-island; whoever controls the world-island controls the world.” We can adapt this theory to retail in the following way: “Whoever manages the commitment phase manages the customer.”

After having subcontracted the customer commitment and marketing of their products to retail stores, industrialists and brands now seem determined to take charge of things themselves. They will do this in three ways. First, by opening up physical stores, pop-up stores and other corners belonging to brands. This has long been common practice in the clothing area (Lacoste, Nike, Adidas, etc.) or in personal care (Yves Rocher, l’Occitane, etc.) and will rapidly spread to other sectors. Consider, for example, the initiatives implemented by Maille. The company has opened its own shops in Paris, London, Sydney, Chicago and Portland. The goal is clear: get close to the customer and make your products stand out from the competition! Next, there are crowdfunding platforms, which have the advantage of creating a direct emotional relationship with consumers. A favorite of young companies from the video game world (Infinity Battlescape) and dedicated to innovation (Peeble watches), this driver could be used by other industry players. Finally, Twitter accounts belonging to brands and dedicated to instantaneous management of the customer relationship are being generalized.

The emergence of “Instore Analytics”

After acquiring tools to measure and analyze the behavior of online consumers, retailers now face the challenge of reproducing this performance in brick-and-mortar stores. Concretely, the idea is to use new technologies (camera, Wi-Fi, etc.) in a coordinated way to anonymously collect information related to consumer behavior and purchasing. How do they move around the sales area? How can the moment they pay be pinpointed? And more specifically: how can shopping cart abandonment be measured in the store, along with ROI from a marketing campaign?

These types of initiatives have begun to spread in other countries. As an example, the Coop grocery store in Italy has installed 44 Kinect sensors (Microsoft) to understand and analyze how customers move around the store. Dune London in the U.S. has also opted for new equipment. This American brand specialized in shoes has developed an extensive technological arsenal to measure commitment in its store. All signs are pointing to the imminent emergence of “Instore Analytics” in France.

Rehabilitation of the IT Department

Formerly the guardians of the customer relationship, marketers have noted a change in the wind. The time when the customer experience was limited to visiting the sales area and receiving flyers or emails from the store is long gone! In the current era of digital omnipresence, mobility, Big Data and the Internet of Things, knowledge of customers and the enhancement of their experience – the two are obviously related – requires real technological expertise. And inside the company, who has this technological mastery if not the IT Department? Because of their technological limits, marketers can no longer claim exclusive management of the customer experience. The year 2016 will be notable for the (forced?) collaboration of marketing and IT departments. Will this be the final step before the latter eject the former?

By Christophe Kühner

VP Field Marketing and Communication at Generix Group

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