Faced with continued uncertainty, where should retailers focus their tech investment?
The last 12 months have ushered in a new wave of uncertainty for retailers. Already grappling with challenges created by Amazon’s near relentless drive to dominate the consumer wallet, retailers find themselves faced with a new level of unpredictability at the hands of political forces including Brexit and Trump. In this climate where the only certainty is uncertainty, where should retailers focus?
At eCommera, we brought together three experts - economist Alex Hamilton of Retail Week, psychologist Kate Nightingale of Style Psychology, and futurologist Matt Gee of Isobar – to discuss this hot topic.
A key area of discussion was around whether – and where - brands and retailers should be investing in emerging technologies. Although all of the participants were quick to agree that 2017 will not be the year of virtual reality, despite myriad tech predictions to the contrary, they highlighted three emerging technologies that retailers should consider investing in.
1. Artificial intelligence
For our futurologist Matt, one of the key technologies for retailers to bear in mind is artificial intelligence, because of its potential positive impact on both the business side – in terms of driving efficiencies through things like warehousing and predictive stock control – and the customer experience.
Matt continued, ‘Based on my behaviours, based on my interactions - whether that's with humans or machines - I'm going to be able to have curated a much more individualised type of experience, which is more relevant for me, delivered at a time when the context is right. This means moving from a kind of broadcast to dialogue. So I think artificial intelligence is going to have a huge transformative change for the good.’
2. Augmented reality
For Matt, another key area that retailers should consider is augmented reality.
‘Virtual reality is interruptive as a platform in that you stop what you're doing, you put the headset on, you're at your environment. But that's not a natural behaviour that we're doing every day as we're going about our business. You select time to do that. Whereas augmented reality is actually giving us an enhanced version of what we're already doing, probably through a smartphone - we've seen Pokémon Go as an early example of that type of behaviour being something that people are engaging in - and we actually have the data points already. How can we make an experience of what we're already doing richer by using augmented reality?’
But how might the likes of Pokémon Go apply to retail? Matt continued, ‘So if I am in a shop and I like an item, I can just put my phone over it and it'll give me all those details immediately for example. Or I see something you're wearing, and I think oh that's nice, I'd like to see if there's something like that.’
3. Dynamic pricing
For our economist Alex, dynamic pricing is one of the key emerging developments for retailers.
‘Price is king and dynamic pricing, which is personalised pricing essentially - for me that's the logical next step when it comes to personalisation. If you look at Jet.com in the US, they were bought by Walmart recently, and when you add a certain mixture of goods to a basket, it gives you a price based specifically on those goods. I think that's an interesting first step into that.’
So how can retailers respond to the many tech trends emerging? Our key advice is to avoid getting caught up with tech trends. Instead, focus on your customer and put them at the centre of any discussion around new technologies. Amazon famously puts their ‘customer’ in the room at meetings. While an empty chair may not be the right approach for every business, make sure you are thinking customer first and not getting distracted by the allure of new tech.
Watch video highlights from the debate and download a full report here.