Last week in New York, thousands of attendees visited retail's biggest trade show, NRF, and the massive event has left retailers with much to contemplate as they plan for another year of digital transformation, brick and mortar upheaval, and emerging technologies.
With the retail world in the midst of a massive transformation, NRF served as a place for retailers to talk shop about the old and the new, the innovations and the changes, the good, the bad, and the ugly. Many conversations centered around retail's biggest pain points — and which technology innovations retailers need to integrate into their businesses to improve the customer experience and drive the overall growth the industry needs.
As always, many critical topics were discussed at the event—far too many to dive into here—but below we will explore three takeaways gleaned from this year's show. Not surprisingly, all are centered around giving the customer a superior experience.
Omnichannel Must Become a Reality
How many years has it been since retailers started dreaming of real omnichannel marketing? Many, it seems. At this point, retailers must be sick and tired of hearing about omnichannel, but it's clear from NRF 2018 that omnichannel is far from conquered territory.
In the various keynotes and sessions at the conference, the general thought was, while many brands are making strides in their attempts to incorporate omnichannel, most are not quite there yet in terms of functionality. While they have begun to put the right technology in place — what seems woefully inadequate is the optimization of operations to support those things. While today’s leading retailers may have a store, a website, and a mobile app, having multiple channels is often confused with providing customers a true omnichannel experience. The holy grail of seamless customer communication across all of their channels has not yet been reached.
Omnichannel has been a major challenge for the industry. But retailers need to understand that they are only at the beginning of this endeavor. The bottom line is that the main driver for omnichannel adoption should be the desire to truly give the customer a wonderful experience, leading to further engagement and loyalty.
AI to The Rescue
Artificial intelligence has, once again, emerged as an over-arching theme at the show — and quite understandably. Like omnichannel, AI (as well as machine learning) is a term that has been talked about for years as kind of "cure-all" for customer centric retailers. In 2018, this is closer than ever to becoming a reality, and in fact many businesses (including ZyloTech) are at the forefront in helping retailers take advantage of this. For example, by processing massive amounts of customer data from multiple channels and sources, AI can help businesses recognize and predict behavioral patterns, including purchase likelihood, product affinity, lifetime value (LTV) predictions, and churn propensity.
The insight derived from these predictive analytics can be used to accomplish and improve things such as customer communication, marketing campaigns, and channel resources.
Data and The Customer Experience
Another major area of discussion at the show was the need for retailers to improve the customer experience, specifically around personalization—the idea that the customer feels that the retailer really understands them and speaks to them as if they know their needs, wants, and preferences.
Most brands agree that if they can communicate in an emotionally intelligent way with their customers, they will receive a higher level of engagement and loyalty (and ultimately revenue) in return.
In practice however, brands struggle with this—they have difficulty knowing exactly how to communicate which message or offer, to which customer, through which channel, at what time. It becomes so difficult that they default to mass emails, or just giving everyone the same discount, thereby cannibalizing profits, and delivering generic communication.
The cause is primarily a data issue. In theory, retailers have more data than ever before about their customers—their preferences, purchase history, spending habits, demographics, intent, and other attributes. In theory, that large amount of data should make it easy for retailers to truly understand their customers and deliver the best, most personalized, experience—whether online, in store, via email, or on a customer support call. We say “in theory”, because the reality is that shockingly few retailers are able to take advantage of the benefits that “big data” provides.
The problem here is that, for many of these retailers, this data lives in silos. The eCaommerce data is in one area, the in-store data lives somewhere else, the email team has campaign results data, someone else has social media data…you get the picture. So, when marketing does try to execute a really personalized, segmented campaign, they can’t do it without calling someone in the IT group, or a marketing data analyst to pull a report. Then they must wait for that report, plug it into a marketing execution tool of some kind, and fire away. By that time though, the data might be days, or even weeks, stale and is probably incomplete—leading to outdated promotions or irrelevant offers. Most retailers understand that, due to the huge volume of data coming from a wide variety of sources, machine learning and AI is needed to wrangle all the data into one consistent view of the customer.
A combination of AI and Machine Learning are the keys to an omnichannel customer experience. The sooner companies begin to adopt these technologies, the sooner they will achieve true personalization in their campaigns, and ultimately drive sales and increase revenue.