A record 27,000 retailers and technology vendors converged in NYC this week for the National Retail Federation's (NRF) Big Show. On the heels of a modest holiday retail season -- up only 3 percent year over year -- three keywords dominated in speaker sessions, exhibitor booths, and hallway conversations.
OMNICHANNEL
"Retailers must reinvent how they serve customers." - Mindy Grossman, CEO, HSN Inc.
Most retailers are structured to face the challenges of managing multiple store types, from traditional bricks-and-mortar to online and mobile. But those multichannel distinctions are fading for the customer. With smartphones comprising over half of all cellphones in the U.S., more and more shoppers are researching competitive prices while standing in a store -- a trend called showrooming -- and buying later, on their laptop or tablet. The term "omnichannel" has emerged to describe this seamless, connected, simultaneous demand from consumers.
Catering to this omnichannel experience requires an overhaul of thinking and organizational structure. The knee-jerk reaction is to drop prices -- or worse, to block cellphone signals in an attempt to isolate the walk-in customer -- but the opportunists are focused on delivering a better customer experience.
"The channel is irrelevant," says HSN CEO Mindy Grossman. "Technology enables us to create better intimacy." In addition to its home shopping television network HSN boasts live streaming video to online and mobile, one of the 10 most trafficked eCommerce sites at HSN.com, over 25,000 product videos, mobile apps for smartphones and tablets, a retail gaming portal, and 730,000 Facebook fans. Where other CEOs may have rested on the strength of its television network, Grossman has led HSN's transformation since 2006 into a massive content network across many platforms, all with the goal of engaging consumers wherever they choose to be.
Shopatron CEO Ed Stevens sees a future where all of a retailer's inventory will be exposed digitally. Showrooming isn't relevant for people who want their product immediately so Shopatron enables the full range of delivery options using their order management system, a hosted eCommerce solution. "You can live your life more fully if you aren't spending your time shopping," says Stevens. "We're focused on enabling consumer experiences that make a shopper an active participant in their own order. If I think I can save time by picking up my order locally, I'll do that. Or ship to my home."
PERSONALIZATION
"We need to use data to start treating people like individuals, not market segments." - Jill Puleri, VP Global Industry Leader Retail, IBM
As eCommerce, online marketing, and social media activities grow so do the databases managed by each retailer and the opportunities to create personalized customer experiences. In this expanding ocean of big data, retailers are relying on their technology vendors to make sense of it all.
Companies like FICO are helping to pave the way toward personalization. Feather Hickox, FICO's Director Industry Marketing, says their marketing solutions are focused on delivering "millions of individual treatments in realtime." Transaction data is highly predictive, as Amazon continues to prove with their successful recommendation engine, and browser behavior boosts accuracy. Hickox points to Macy's as an example, where their optimization engine decides to present a mass campaign to a site visitor -- their White Sale, for instance -- or tailored offers depending on the data they have on that particular consumer.
As with all other sources of rich predictive data, the auth-in is the key. Anonymous data can give aggregate insights but the value increases when retailers can go one layer deeper into personal data. But are consumers willing to give retailers access to their personally identifiable information? "Customers are incredibly savvy," says Hickox. "They know when they're opting in and when they're not. And it's on the retailer to deliver a value proposition that's enough of a draw."
Social media adds an additional source of rich behavioral data for retailers with millions of fans and followers on Facebook and Twitter. Analytics technology companies are building social recommendation engines to address this largely untapped potential, using permission social data as the source.
MOBILE
"In the next 3 years traditional POS will be dead." - Rob Garf, VP Product and Solutions Marketing, Demandware
A survey done by Demandware and the University of Arizona's Center for Retailing revealed that the top fashion shoppers leverage an average of 3.7 technologies while shopping. Although they represent a relatively small 22 percent of global shoppers, they account for 69 percent of all fashion spend. Mobile devices enable instant connection and influence and members of this group are twice as likely to use them while shopping than non-members.
Demandware's Rob Garf says this consumer is informed and time-starved. They invest the time to visit three or four information sources through their shopping journey so when they make their decision, the retailer better deliver. Long checkout lines with traditional POS systems and out-of-stock delays aren't tolerated. Garf predicts the shift toward driving in-store purchases through a retailer's eCommerce system -- the most robust source of information with complete stock -- will be the new model. "It's no longer eCommerce or mCommerce," he says. "It's Commerce."
SAP's Colin Haig, Program Principal, agrees. "Why should I have to line up? Checkout is painful." Their bring-your-own-device technology enables Sephora customers to checkout with their iPhone. "It's a full-blown mobile POS, not just a shopping list or scanning app," says Haig.
Disclosure: the author is CEO of Authintic, an analytics technology company building social recommendation engines for retailers.