5 Trends Shaping Retail and Why All Employers Should Care #NRF16 (Part 3 of 3)
By John Orr, SVP of Retail, Ceridian
In my last two posts, I discussed four of the five trends: interconnectivity; Omni-store; beacons and buttons; and Black Friday. I’ve saved one of the most interesting and exciting trends for last: Personalization.
Personalization has become a priority, and rightfully so. Within their workforce, retailers have a broad range of personalities and casts of characters. While many executives believe they are giving employees options to improve their overall experience, they are really limiting the choices to a pre-conceived set of options — this is not personalization.
In 2015, retailers realized the generational differences of Baby Boomers, Generation Y and Millennials, and how each group interacts in the workplace. The best retailers took this data one step further and analyzed how each employee group makes decisions which led to increased workplace satisfaction, tailored perks and improved operational functions.
As more retailers invest in technology that connects the dots (reference my post on trends one and two) and recognizes the unique needs within the workforce, we’ll continue to see improvements in the employee experience.
Retailers are taking this personalization trend and extending it to consumers. They recognize that customers expect more control over their options and a better overall experience — both in-store and online. Personalization can take a variety of forms: greeting customers as they enter the store; sending personalized emails; tailoring deals based on previous purchases; offering a recommended products section; or enabling the customer to put their own “stamp” on the product.
Personalization can impact the bottom line. According to an Infosys study of 1,000 U.S. consumers, 86 percent who have experienced personalization say that it has some influence on what they purchase. The study also found that 78 percent of consumers are more likely to be a repeat customer if a retailer provides them with targeted, personalized offers.
Failing to provide personalization may have the opposite result: the CMO Council reported that more than half of U.S. and Canadian consumers consider ending their loyalties to retailers who do not give tailored, relevant offers.
Therefore, we’ll continue to see retail investments in new shopping models that put a higher degree of control in the consumer’s hands. Here are some examples:
- Nordstrom has partnered with start-up Shoes of Prey to enable women to customize shoes online.
- Target’s Cartwheel app focuses on getting shoppers special offers on the items in their shopping lists.
- Mondelez, the maker of Oreos, lets shoppers design custom packages of the sandwich cookies on a new website, shop.oreo.com.
- Chico’s installed Tech Tables that allow shoppers to interact with a large digital screen as they browse through products alongside other shoppers in the store.
- Sephora offers a mobile app that guides customers through makeup application and the use of in-store beacons to push relevant information to loyalty members.
This trend certainly has its vulnerabilities — particularly in the area of data privacy. According to Dave Richards, global managing director of Accenture’s Retail practice, “Personalization is a critical capability for retailers to master, but as our survey shows, addressing the complex requirements of U.S. consumers is challenging because they are conflicted on the issue. If retailers approach and market personalization as a value exchange, and are transparent in how the data will be used, consumers will likely be more willing to engage and trade their personal data.”
By personalizing promotions, recommendations, and product-driven content based on prior shopper behavior, innovative retailers are creating engaging experiences for consumers both in-store and online.
Insight: Everyone — customers and employees — wants their preferences to be recognized and understood. It’s about creating positive experiences that lead to long-term relationships.
I’ll be watching for these five trends — Interconnectivity, Omni-store, Beacons and Buttons, Black Friday, and Personalization — as well as other trends at the Big Show. Stay tuned for future posts where I’ll share my insights from this event.
John Orr is the SVP of Retail at Ceridian. Follow him on Twitter at @John_Orr.