Why the future of retail is less ‘Minority Report’​ and more ‘Stand By Me’​

Why the future of retail is less ‘Minority Report’​ and more ‘Stand By Me’​

By Brent Franson | Industry Insights | 17 March, 2017

As an industry, retail isn’t doing enough to reach and inspire customers, at least in the way they want to be engaged.

It’s at this point we usually talk in light, polite terms about “missed opportunities” and “new paradigms.”

But let’s not fool ourselves. The future is coming. We can see it in the heavy disruptions that are roiling this space, from store closures to Chapter 11s. And we can see it in early concept stores like Amazon Go that blend elements of e-commerce with physical retail’s kick-the-tires appeal. Retailers need to be clear-eyed about the future and adapt accordingly.

The future of retail is identity-based.

The stores of the future will know precisely who walks into the door and who is in the space at all times. In sharp contrast, customer identity is currently pretty much tied to the point of sale (at best) – that is to say, we mostly know who is in the store only when they step to the cash register and offer a credit card, loyalty number, or email as part of the transaction process. That’s no longer enough when customers use online and offline channels to buy.

You need a single view of customers across online and offline in order to deliver efficient, personalized experiences – and to better attribute which marketing campaigns are inspiring people to visit and eventually purchase. There is power in knowing who comes in, who leaves without buying, who comes in and then buys online, who researches online and then buys in the store, how long they stay, etc. Without that data, it’s impossible to fully serve and delight customers whose expectations have been reshaped by technology.

But first, retailers must recognize and respect the intricate interplay of trust, relationships and value.

Customers must opt-in to a system where their identity is known as they shop – and their comfort level will grow but only given time. Rest assured – this is less Minority Reportand more Stand By Me. Instead of a Big Brother-esque twist on shopping, the paradigm really is a gentler one that’s focused on building enduring relationships by establishing connection, nurturing trust and offering something valuable to customers.

Amazon Go, the sexy walk-in/walk-out concept store, is a fantastic example of how this works. On Day One of this store’s live debut to the public, Amazon will know with 100 percent accuracy who is in there – and the magic will be how normal it will feel to those consumers. Why? They already know that Amazon understands who they are. They’ve previously shopped online, have an Amazon account, and will use the app to walk in the door and then simply leave with their purchases. These consumers trust the retailer based on previous positive experiences with the brand – and they value what they’re getting enough to make the trade: personal insights that are valuable to Amazon in exchange for the experience, convenience and personalization the retailer gives in return.

Technology for technology’s sake is not the answer

Retail has to think about using technology to drive value for customers – but only in the right way. If technology doesn’t drive better experiences, then it will be relegated to a niche category (potentially interesting but not useful at scale) or it will fail entirely. Think about 3D movies – at one point, there was speculation that all movies would be 3D. But guess what’s one of the most popular changes for moviegoers? It’s not donning a pair of 3D glasses; it’s settling in to a Barcalounger and ordering dinner before the previews begin. A simple recliner setup has reinvigorated the moviegoing experience – and it was really just through mixing in some old world comfort with technology. Conversely, Amazon and Netflix offer great experiences that happen to be powered by technology; although a veritable army of data scientists, developers and computer engineers were required to create them, customers just enjoy the end result of personalization as they buy online or binge watch Stranger Things.

Think of technology as part of the long game.

Let’s face it: we’re not yet driving toward identity-based shopping for proximity marketing. Consumers are not ready for a text message with a coupon while they’re standing in the milk aisle. Right now, this is just about getting the information that will serve as the bridge connecting online and offline. You’ll use it to shape marketing campaigns, improve targeting through offline behavioral signals, and better attribute visits or purchases to specific marketing efforts.

But if we take a big step back, it will also help us as an industry to build a foundation for tomorrow, when we are ready to offer consumers a highly personalized and interactive offline experience – and they’re equally ready to participate. Wi-Fi is one obvious way to begin. Shoppers’ phones are already interacting with store networks so using it to offer customers discounts, freebies and other incentives in exchange for email addresses is a logical and simple step forward.

How are you adapting your efforts for a future of identity-based marketing?

See the original article as well as other posts by Brent here.

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Brent Franson

Brent Franson

Brent is the CEO of Euclid Analytics.

More posts by Brent Franson