By Kevin Cundiff
Seems like the holidays were just yesterday, right? Wrong. Believe it or not, we're already into the second half of 2016.
The first half of the year boasted big changes for the retail industry, with beloved brands like Target completely redesigning their store, and the convenience of dollar stores entering the online space. Along with these changes came a few trends that helped shape retail for the first half of the year, and will continue to encourage industry evolutions into the future.
It's hard to ignore the buzz around chatbots entering the retail space, but make no mistake: this trend isn't all talk. Many well-known brands are looking to AI to help with their business' customer service.
Customers value a timely response to service questions above any other customer service aspect, according to a survey by Interactive Intelligence. And many brands have realized they can boost response times by utilizing chatbots to assist such inquiries. In fact, this tech can even make suggestions for products that might fit the customer best.
Makeup retailer Sephora is jumping on the chatbot bandwagon by offering makeup tips and reviews via their AI helpers. Clothing brand H&M is also utilizing the technology to make suggestions for shoppers, including recommended outfit choices.
Move aside, apps and beacons—you've got some competition. A few brands are increasing their in-store tech in big ways, increasing customer satisfaction and building brand loyalty.
Both Lowe's and John Lewis now offer in-store 3D models that allow shoppers to create a replica of their home to 'try on' various colors, patterns, and finishes to find the perfect fit, decreasing returns and unhappy customers.
Rebecca Minkoff is also helping consumers make the perfect purchase via their new eBay store. It offers a comprehensive customer experience backed by smart mirrors that let shoppers request fitting rooms, order drinks while they shop, and even change the lighting in the dressing room. Connected walls detect each item in the room to provide suggestions on other items the customer might want as well.
While these in-store tech innovations may seem like the future, that future is now. Retailers should take a cue to improve their tech game beginning in the back half of 2016.
Floundering high-end sales
The year began by delivering a major blow to high-end retailers. This ‘high-end rRecession,’ as dubbed by Morgan Stanley analysts, has hit popular retailers like Nordstrom and Restoration Hardware. As customers seek purchasing options that allow their money to go further, high-end retailers are becoming less appealing to shoppers. For example, customers are turning to lower-end equivalents like Nordstrom Rack as a means to make similar purchases at a lower cost.
So, what does this mean for big box retailers carrying big-ticket items like furniture and appliances? These retailers should keep an eye out for changes in their market and adjust accordingly to keep customers happy. Ready or not — these trends are already here. Adapt early and often to get ahead of the game for the remainder of 2016 and beyond.
Kevin Cundiff is VP of Retail for Fortegra Financial Corporation, a Tiptree Financial Inc. company.