Technologies poised to change the future of holiday shopping
By Harriet Green, general manager for IBM Watson Internet of Things, customer engagement and education
Ready or not, the holiday shopping season is about to kickoff. Retailers are busy preparing their competitive strategies, forecasting anticipated customer trends and yes, even bracing for unexpected disruptions. In the U.S., the National Retail Federation expects that retail sales in November and December 2017 will increase between 3.6 to 4 percent for a total of $678.75 to $682 billion. What does this mean for retailers? With thoughtful preparation, success is possible.
Preparation is the key word because this holiday is different from what we saw in 2016. The change has been in large part driven the emergence of smaller niche brands. Powered by social media and influencer targeting, device proliferation, and the increased sophistication of data and analytics, these smaller companies are stealing customers away from established retailers.
This is not the first time entrenched retailers have been faced with new threats from emerging businesses and trends. The industry is very familiar with disruption. The key, as in the past, is for retailers to look past the solutions and strategies that got them to where they are today and instead, welcome an early adopter mentality to embrace the innovations that will define the next era of retail.
The path, however, is different for each retailer. For some, the focus may be on eliminating in-store inefficiencies to attract consumers who love to shop in store. For another, the focus may be on eliminating inefficient supply chains, non-competitive pricing, or complicated ecommerce web layouts.
How will they will innovate? They will embrace technologies and innovations such as artificial intelligence and cloud to introduce new ways to differentiate their brand such as:
Setting the right price with AI
One challenge many retailers face is being out priced by more nimble competitors, the main reason why dynamic pricing is so important. The concept of dynamic pricing isn't new, but coupled with new AI technology, it can give retailers greater control than ever. For instance, a dynamic pricing solution can factor in market demand, emerging weather patterns, social sentiment, competitor prices, inventory availability, time of day, and more. As a result, retailers not only gain a leg up on their competitors, but drive more traffic to their business and increase sales.
Skipping the lines with near field technology and blockchain
Thanks to groups such as Generation Z, shopping in the store will never go away. But these new consumers do have strict criteria when choosing where they will shop. For instance, they will not tolerate standing in long check-out lines. Thanks to near field technology, this season some retailers will deliver the ultimate holiday gift…no lines. That's right, customers will be able to walk out of a store with the items they want and retailers can automatically charge their digital wallet on the way out. Worried about your personal data? By adopting blockchain technology, retailers may actively and permanently track digital transactions, securing systems from errors, and reduce the risk of fraud.
Making performance issues a thing of the past
All shoppers have little tolerance for a site that's not performing. The issue can be anything from a coupon that was shared with loyal customers and is not being recognized at check out, or that some of the top Cyber Monday deals being advertised are not loading on the site. Whatever the issue, retailers usually don't find out until frustrated customers have already left their site and fled to the competition. With cloud and AI technologies, marketing and digital commerce professionals can follow their customers' journeys with their brand as they happen, identify these issues in real-time and then eliminate possible barriers of engagement to ensure a satisfied customer.
Weather proofing your business
If there is one thing that can foil the best preparations and holiday deals, it's weather. For example, in the southern U.S., The Weather Company is expecting a mildly warmer holiday season. As a result, retailers will likely see a less early spike in sales on days such as Black Friday, but more sales in the days that follow. Retailers in these regions should be prepared and plan promotions to match these warmer temperatures. Weather will also be integrated into supply chains, giving teams the ability to spot potential issues such as impending storms that are approaching key distribution centers. You don't want popular products to get snowed in right? By tying weather data into the supply chain, disruptions such as these will be a thing of the past.
The retail industry is used to challenges but those businesses that exhibit a willingness to embrace innovations will eliminate these new threats and set their course for years to come.
Companies: IBM Corporation