As an observer and avid reader about the ever-changing retail and technology industry, it is hard for me not to form opinions of where our industry is going. Following are my thoughts on the trends I see impacting asset protection and retail professionals this year and beyond.
The Internet of Things (Iot) Is Here to Stay.
IoT will further our hyperconnected world in many aspects, particularly in retail. Interaction with technology will create a more personalized experience for the customer, who will shop using augmented reality and interactive smartphone apps. Retailers will need to continue to invest in IoT in order to stay connected with their customers. As early as 2018, 88 percent of early adopters of IoT in retail reported that IoT helped them gain increased insight into customer preferences. For example, IoT devices fitted with RFID technology can be used to create smart shelves, which can improve inventory management by automatically tracking inventory and sending alerts to managers if a certain item is running low on stock or will expire soon. This is just one example of how IoT devices can help retailers make more efficient decisions in their inventory management to avoid oversupply, shortage of products, and theft. IoT devices will also become a growing part of store associates’ equipment, so they can better serve the customer. These devices, such as mobile devices outfitted with intuitive apps, bring inventory management data from the warehouse directly to the store associate to increase the retailers’ understanding of the customer.
Brands Will Continue to Evolve with Technology.
Though well-known brick-and-mortar stores have closed their doors and many others have filed for bankruptcy, this does not mean the end for other retail stores. Many retailers have already begun adapting to a more digital age, focusing on having a smaller brick-and-mortar footprint and improving their customer experiences both in store and online. Brands are investing more into social media marketing after recognizing the impact of social media on customers’ decision-making. Big-name retailers, such as Sephora and Samsung, have also expanded into experiential retail to target millennials, who tend to prefer experiences over products, to create compelling reasons for shoppers to visit a brick-and-mortar store.
Retailers Need to Create an Immersive Customer Experience in Order to Handle the Generational Difference in Customers.
In 2019, millennials have surpassed baby boomers to be the largest living generation in the United States. Nearly all millennials own a smartphone, and nearly half of them make purchases on these devices at least once a month, with almost a third doing so once a week. The growing millennial and Gen Z populations want a more convenient and accessible shopping experience, and they are more than willing to provide some personal information to retailers in order to have a more personalized customer experience. However, as the digitization of shopping increases, retailers need to protect customers’ private data to maintain and further increase trust in their brands.
Retailers Will See an Increase in Cyber Attacks, and How They Respond Will Be What Saves Them.
With the rapid growth of data breaches and other cyber attacks targeting major organizations, retailers need to acknowledge this threat in their cyber-security protocols. In 2019, data breaches targeted many major retailers, including Macy’s, Poshmark, Planet Hollywood, Kay Jewelers, Marriott, Adidas, Saks Fifth Avenue, and Panera, whose customer data became compromised in these attacks. Implementing basic security measures, such as strong passwords for IoT devices and encryption, is the simplest way to deter a cyber attacker from targeting your store. Having response plans in place is another way to alleviate the impact of a cyber attack, should one get past your cyber-security measures.
Big-Box Retailers Are Becoming More Competitive with Amazon.
It is obvious that Amazon has redefined retail for the twenty-first century, from the birth of its digital assistant Alexa to the launch of Amazon Go, its chain of automated convenience stores, in 2019. But it is important that instead of becoming distracted by Amazon’s technological developments, retailers compete by offering a superior customer experience. Though Amazon dominates the online shopping market, it cannot compete against other big-box retailers like Walmart, whose large physical footprint has maintained its status as a household name in the United States. Retail sales still heavily favor brick-and-mortar in the US, with 85 percent of transactions still taking place in stores.
Retailers Need to Make the Checkout Process More Seamless.
Most retailers are a ways away from completely cashierless stores, but customers still expect digital or contactless payments, such as Apple Pay, Android Pay, and Samsung Pay, to be more widely accepted to make checkout faster and easier for them. Other checkout evolutions, such as self-checkout, “scan and go” checkout, and cryptocurrency, all tie back to ease of checkout for the customer. As we enter 2020, more retailers should introduce digital payments to their systems to improve the customer experience.
We Will See a Greater Focus on the Store Associate Experience.
With all these technological developments, many retailers have been caught up in preserving the customer experience while ignoring their own store associates, which is just as important. As IoT devices and other technology are introduced into retail stores, associates’ roles are changing rapidly. Customers expect store associates to be able to quickly provide information about inventory and create a personalized shopping experience. Retailers need to invest their resources into training and equipping store associates with the resources they need, such as intuitive technology and training in digitization, so they can evolve with their customers’ needs.
Technology is not here to eliminate us; it’s here to make our jobs and our lives easier. Though there has been a period of adjustment in the past few years, retail will continue to evolve with technology. As retailers, your responsibility is to focus your efforts on improving the customer experience using the new tools at your disposal.
Tom’s column is featured in every issue of Loss Prevention Magazine. To subscribe to the printed version of the magazine and enjoy other great content, visit losspreventionmedia.com.