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While retailers grapple with offering multichannel shopping experiences, the industry’s next big hurdle emerges: data deluge.
Billions of connected devices and sensors coming online in stores — with customers and in products — create new challenges and opportunities for retailers.
To plan ahead, the industry is gathered at the National Retail Federation’s Annual Convention & EXPO, also known as Retail’s BIG Show, in New York City this week. Among the headlining speakers, Intel’s Steve Brown brings futurist thinking to an industry not historically known for leading innovation.
“Retail has an opportunity to completely transform itself using data,” Brown says. “It’s all about understanding your business and making decisions that are better.”
Brown says the next five years will further lessen the importance of shopping channels anyway.
“We’re moving to an era where the shopper really doesn’t care about channel — whether it’s physical, mobile or in their home. We’re moving to a post-channel world,” he says. “With all the excitement about omnichannel now, eventually it all just blurs seamlessly together.”
While the epic rise of ecommerce has transformed retail over the past 15 years, Brown says 90 percent of retail sales still occur in physical stores — but even that is changing.
Not only are shoppers’ platform and product preferences changing, but so are their expectations of brands.
“We’re seeing customers interact with brands in completely new ways,” he says. “But a lot of brands are really concerned, saying, ‘I don’t know how to interact with millennials, I don’t know what they want.’ ”
The key to unlocking this relationship lies in data.
“The retail sector needs to up its game,” Brown says. “Data is going to be used to understand shopping behavior like never before, and it will help redefine the value of the store.”
The old retail model of having a nice shop with nice things for sale won’t be thriving in five years, Brown says. The definitions of products must change.
“The value proposition of the store will not just be selling a product, but it will be wrapped in services and advice,” Brown says. “It’s about making sure the shopper trusts you and your brand.”
In the next few years, brands must add more value to their relationships with shoppers. The road map to building these relationships begins with data.
“Five years from now, every single decision made in retail will be made based on data and a true understanding of what is happening in the store and who the shopper is,” Brown says.
To better understand how retailers use technology to their advantage, CDW surveyed 312 retail business managers.
Andy Szanger, director of corporate sales at CDW, says that the CDW Retail Innovators Report reveals how leading retailers enhance operations and the customer experience using data.
In the survey, 33 percent of respondents said their ability to draw data from their organizations is a top priority. Additionally, 58 percent ranked deriving value from data as a top-three priority.
“Retail innovators are using technology within their organizations to go above and beyond to increase the customer experience, as well as increase bottom lines,” Szanger says.
In the survey, 90 percent also said they felt using data analytics would increase their sales, and of those, 62 percent said it would increase sales by 20 percent.
“The store of the not-so-distant future is one that really has access to real-time information and allows you to make offers and experiences for where your customers are right now, at this very moment.”
Learn more about technology’s transformation of retail.