2012.25 | PSFK Future of Retail Report

If you haven’t had a chance since its release a couple of weeks back, be sure to take the time to review the 2012 Future of Retail Report from PSFK.  Every year it provides some new insight into leveraging technology in the retail environment.  The summary report has some great ideas, and I’m sure the full presentation (chargeable) has lots of additional details.

This year’s report incorporates a number of videos on the Slideshare site.  Be sure to watch them – they provide a quick and simple window into pieces of the shopping climate we are moving towards inexorably.

The report is divided into two segments:

The New Brand Champion – including details on Shopper as Affiliate, Crowdsourced Product Range, Shopper-to-Shopper Service, and Shopper Designed Deals.

Retail on Demand – including details on Service with an opt-in, Auto-curated Shopping, Shopper Coaching,  Bespoke at Scale, and Fit with a Click.

In reading the report, I’m struck by a few thoughts.

In past years, retail competition was a fundamental exercise in driving out cost.  More recently, consumer facing organizations are looking for novel ways to differentiate themselves and ways to provide a unique customer experience – one that the customer decides on from various options.  All of the ideas in the report provide an opportunity for retailers to go down that path.  It will be very important to consider how all of these ideas mesh with all of the other channels in a retail organization.  It’s already a challenge to provide a consistent user experience across web, mobile, tablet, and store.  These ideas only complicate the question of what a channel is.  Retailers need to work hard to keep tabs on who is using these channels and how they impact the total customer experience.

It is also important to understand that the implementation of these ideas are fundamentally driven by the infrastructure put in place to support them.  These are not just one time purchases of a ‘solution’ that an organization can purchase off the shelf and ‘turn on’ and watch the money come in.  In order to leverage many of these ideas, retailers would need to build teams to develop them and teams to run them into perpetuity.  Without the investment in resources, including incredible people who STAY and run the program, the ability to excel with them is limited.

These ideas also highlight the increasing importance of subject matter experts for retailers.  If you look at many of the ideas, they involve customers obtaining a more personal experience with the retailers – turning to them for advice on what to wear, how to fix things, what option is best.  Without a staff of knowledgeable people, some of these tools could serve to highlight a serious gap in an organization.

A few comments on the report subject matter:

Shopper as Affiliate:  Passing commission fees to regular consumers is a great idea.  Challenge will be around using it in the right segment and not diluting a brand too much.  When it comes to clothing, customers don’t want their friends to buy exactly the same outfit.  At the same time, providing the human element by allowing regular people to set up their own boutiques is great.  While shopping algorithms for online bookstores try hard, my experience is that they show a narrow genre based on purchases or what others have bought that you buy, having a person who is a genuine book lover curate a set of books that they love provides customers the potential of the thrill you get when you find something  unexpected and the opportunity to reward someone for it.  Think of the App Store for Apple.

Crowdsourced Product Range: Great idea to involve customers in what they get.  MyStarbucksIdea and others have been doing the same thing for some time.  Important to have some great people working through these ideas.

Shopper-to-Shopper Service:  Pairing regular consumers with someone shopping for products provides that buddy you take with you to buy golf clubs perhaps.  Once again depends on the product and how well this fits.  Personality can come into this as well.   Would be important to pair the right people.  Generally subject matter experts (SMEs) are willing to share their knowledge.  What a great way to help retailers outsource SMEs or find SMEs to be part of their organization – a hole that is always there to be filled.

Shopper Designed Deals: While I like the idea of customers suggesting what they want to pay, this idea is very much a function of the audience.  Value based consumers could make this challenging.

Service with an Opt-In: I agree with providing personal details to retailers if they use it to provide me better service.  Four Seasons Profile Guests remember what paper you like to read and ensure it’s at your door.  This is a platform that could be constantly be extended.  Sizes of clothing, and reminders important dates like birthdays and anniversaries could be kept on file.

Shopper Coaching: Getting customers invested in a brand by getting them more deeply involved is brilliant to ensure a lifelong wallet share.  It also helps recruit those SMEs.

Auto Curated Shopping: I’m always torn with algorithms to suggest things that people would like.  It’s rare that I’ve found anything I LOVE that an algorithm has shown me.

Bespoke at Scale: I’ve seen Nike and others kick this around for years.  Being able to provide customized solutions online makes lots of sense as long as the offers are what people want.  Ironically the number of choices available seem to be going down as organizations go the Apple route and offer you any colour you want as long as it’s silver.

Fit with a Click: Another solution that has been played with for many years.  I’m still not sold that these solutions are 100% effective.  Especially for women with the unique fits and looks provided.  The way things hang is truly hard to show.

All in all, a really fascinating roundup of ideas.  Once again read the report, and look for places where these could work for your organization.  Realize that none of these solutions is a panacea, and none of them should be used in an identical way by any retailer.   Having the technology option isn’t unique.  Using it in a way that is relevant and fresh is unique.

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