The Future of Shopping1

eBook

eBookTHE FUTURE OF SHOPPING

Introduction 2

Chapter 1: The Latest Buzz Word in Retail...Omnichannel 3

Chapter 2: The Future of Shopping: A Reality 6

Chapter 3: Forget Millennials what about the iGen? 11

Chapter 4: Future of Online Shopping: Bricks vs Clicks 16

Chapter 5: Summary 19

1The future of shopping is a hot topic for retailers, covering a broad spectrum of ideas and trends. In order to do the subject justice we are writing and publishing the Future of Shopping eBook.

Each chapter will focus on an a different aspect of retail and will consider the implications on both retailers and consumers, starting with the latest retail trend of omnichannel strategies.

INTRODUCTION

2

1WHAT IS OMNICHANNEL?

Ultimately, omnichannel removes online vs in-store thinking and focuses on creating a cohesive retail strategy across all platforms from mobile, call centre, online and in-store to create the optimum customer experience.

CUSTOMER BEHAVIOUR AND WHY OMNICHANNEL IS SO IMPORTANT FOR RETAILERS

In the past customers have been in one of two camps, either sticking with in-store or online shopping. Now, however, people very rarely stick in one camp when shopping and a large amount of customers will do a mixture of both to purchase just one item.

For example, when purchasing a pair of boots, you may start with some online research, then pop into a store to try them on to make sure you have the perfect fit, then check real time prices online via your mobile, to discover the same same boots are on sale with a competitor. You may check with the cashier if they offer a price match promotion but are informed that in-store can not compete

with any online prices. So you decide to order the boots then and there on your mobile which includes free next day delivery. Resulting in a happy customer but not a sale for the in-store retailer. This is just one small example of many where a customer is engaging on different channels to make one simple purchase. If a retailer can consistently target and create a joined up user journey then all efforts will result in a sale and ultimately customer satisfaction and brand loyalty.

ALL YOU NEED TO KNOW ABOUT THE LATEST BUZZ WORD IN RETAIL...OMNICHANNEL

3

WHAT DOES OMNICHANNEL MEAN FOR RETAILERS?

Retailers need to take customer service seriously in order to be competitive. Customer choice is in abundance and customer brand loyalty is in decline. Retailers need to set themselves apart in order to be successful.

Retailers need to invest time in their omnichannel strategy, align their customer experience across every touch point available and remain consistent. Customer shopping behaviour is changing and retailers need to adapt and even preempt customer expectations in order to beat the competition.

No more online versus in-store, now it's all about collaboration and providing the best service via every customer touch point.

WHY DO RETAILERS NEED TO IMPLEMENT OMNICHANNEL STRATEGIES?

Historically businesses would create a divide between online and instore business. This created division and even competition within the same organisation. Instead of focusing on the main goal, making a sale for the organisation, it would be league tables of performance for online versus in-store.

Many organisations still work this way. For example, Thomson holidays have a completely different price and service if you visit a

store, call or visit the website, all of which operate separately like three competing businesses. This creates a confusing shopping experience for customers and tension between departments.

Retailers need to breakdown the walls of division between departments and create a collaborative environment, where all channels are cohesive and support the main objective.

4

AMAZON IS EMBRACING OMNICHANNEL

Amazon's new strategy to trial AmazonGo has gained attention recently. They do not have the history of competing with their own store before so they can start from scratch and implement an omnichannel strategy with no baggage. They have created a user journey that combines the online shopping experience seamlessly with their new in-store offering. Customers already have their Amazon accounts with payment details set up and ready to go. They utilise mobile technology and in-store technology to add items to a customer's account automatically to create a self-service experience with no check outs.

Creating a streamlined customer journey by implementing omnichannel strategies will result in unparalleled customer experiences and ultimately success for organisations, just like Amazon.

5

2THE FUTURE OF SHOPPING: A REALITY

This chapter we look at how the once futuristic view of shopping, is becoming a reality.

THE FUTURISTIC SHOPPING EXPERIENCE

It used to be that the shopping experience seen in films such as The Minority Report, was something that only existed in sci-fi movies. We see shoppers passing advertising and billboards which adjust their marketing message to each unique person by scanning their eyes.

The technology for facial recognition scanning and retina scanning is increasingly becoming used within many industries outside of high level security. Unlocking your smartphone with an eye scan or fingerprint has become commonplace in such a short amount of time.

The software infrastructure also already exists for online shopping. Data gathered from tracking online consumer behaviour is automatically processed and fed back into automated marketing strategies such as remarketing ads. Visitors to websites who don’t complete the buying cycle can be followed by remarketing ads, showcasing the exact product they were viewing, with possible discounts to entice them to return and purchase.

Combining the seemingly futuristic eye scanning or facial recognition technology with online style marketing strategies no longer looks so far fetched.

This is just one of many new technologies that are affecting the future of shopping, below we look at what else is coming our way in the not too distant future...

“HELLO MR YAKAMOTO! WELCOME BACK TO THE GAP, HOW DID THOSE ASSORTED TANK TOPS

WORKOUT FOR YOU?” Source, Minority Report.

FACIAL RECOGNITION SCANNING

FINGERPRINT SCANNING

FINGER VEIN SCANNING

RETINA RECOGNITION SCANNING

6

PUSH NOTIFICATIONS AND BEACONS

A beacon can push notifications to phones or tablets associated with the app. A beacon can be placed in a specific location and when a visitor reaches that location, the app will deliver content to the user such as vouchers, discounts or suggestions. This allows for content to be delivered on a micro-local scale, either by recording visitors on a general scale for a true customer journey, or sending promotional offers to users stood in front of a specific product.

Whilst this relies on users already having the stores own app, with a rise in savvy buyers, with the right offers and discounts customers will happily subscribe to newsletters and apps to ensure they don’t miss out on the best offers.

AMAZON BRICKS AND MORTAR

Amazon is the elephant in the room when it comes to retail. Willing to lose money on products, such as the Kindle to ensure they can capture the eBook market, it was a shock to most when they opened a brick and mortar book store. What’s even stranger is the analytical concept of the store. The stock is less chosen by employees with handwritten notes recommending their favourites, but to do with algorithms and analytics.

“HIGHLY RATED- 4.8 STARS AND ABOVE”“BOOKS WHICH READERS FINISHED IN THREE DAYS”

7

Nevertheless, Amazon are putting their valuable data into practice, and whilst it may seem strange now, no one thought Amazon was going places in 1994. By not just focusing on the digital retail space, but also on the instore interactions, Amazon are looking at aligning customer online accounts with a bricks and mortar experience.

DATA DRIVEN SERVICE

Technology can eliminate checkout lines with POS kiosks or mobile apps, capture transaction receipts, express returns and even give call centers full access to purchase and complaint history to tailor offers. Digital technology, like that available in the form of tablets, can provide sales teams the kind of information normally required by close friends or partners.

This data works in the same way that cookies or remarketing ads work. Retailers can ensure they only show you what you are interested in, increasing the likelihood of a successful sale.

NO NEED TO CHECK-OUT

We’ve gradually advanced towards contactless payments and even paying with digital watches, but now there is a growing interest in check-out free stores. Seen most prominently in Amazon’s conceptual Amazon Go store, there are others who are also trialing the new concept.

Wheelys 247 is a store which claims to be the original check-out free retailer. Integrating a POS app into their systems, customers use their mobile phones to make their purchases, meaning the store is both staffless and check-out less.

By eliminating overheads for retail, stores are able to run at a much lower cost, but staffless is most likely not the future for traditional retail. Customers still expect a level of service, which is possibly why the check-out free stores are traditionally supermarkets, designed for quick and hassle free shopping.

“DOES THE CUSTOMER PREFER TO BE SPOKEN TO OR LEFT ALONE

WHAT WAS THEIR LAST EXPERIENCE LIKE- ANY FEEDBACK

WHAT BODY/SHOE/HOME TYPE DO THEY HAVE?”

8

DRONES

And yet again, Amazon get a mention. Whilst Amazon have managed to shorten the time taken between clicking order and receiving your purchase, not many retailers have managed to follow suit. The cost of offering next day, or even same day deliveries, is difficult because of traffic congestion, distance and if it's a single order of a dress costing £50, the cost of delivering a single item to the depths of the countryside will eat into profits.

Drones appear to solve these issues, and Amazon have been working with the UK government to deliver small parcels and examine the viability of the solution.

However, current legislation bans drones being flown within 50 metres of a building or a person. This is fine if you have a giant field behind your inner city office to pick up your replacement stapler, but as for now, it’s not a solution.

9

3INTERNET OF THINGS

The rise in connected devices, from central heating to lights, it’s unsurprising that the Internet of Things is never far away from a conference discussing the future of technology. From cars which instantly update routes using google traffic alerts, to smart fridges which can order groceries when supplies are running low, we are becoming more connected than ever before. Our inanimate objects are getting smarter, and so are our shopping habits.

WHAT DOES THIS MEAN?

As a society we have very high expectations when it comes to service. We want the ease of online shopping, with the personability of instore. We have created a world where our information has created a curated service online, and now, we can expect the same level of service instore too. This is important for retailers to remember and start planning for the future by implementing omnichannel strategies especially if they are going to attract and retain the iGeneration.

The next chapter in the Future of Shopping eBook will focus on the iGeneration and how to meet the next generation's expectations in shopping.

10

3INTRO

So far we have covered the latest buzz word in retail...omnichannel and looked at what a futuristic shopping experience may look like in terms of technology. Now we consider our future audience...no I am not talking about millennials...that's old news...we are looking further afield to focus on Generation Z also referred to as the iGen.

Retailers can no longer solely focus on millennials as the future but need to think even further ahead and consider the expectations of future customers the iGen, especially with an estimated $44 billion in annual spending generated by Generation Z.

WHO ARE GENERATION Z?

Generation Z also known as the iGen, are born after 1995, have grown up with access to the internet, typically thought of as being comfortable with technology and rely heavily on social media for the majority of their socialising.

TECHNOLOGY IS A PART OF IGEN

Children as young as three know how to use Mums smart phone and Dads tablet to play games and stream content. The University of Iowa published research that suggested 90 per cent of modern children had a moderate ability to use a tablet by age two. They are so accustomed to the interaction of a screen that human interaction may seem more alien.

Young children are being exposed to technology at such a young age that brands can already take advantage of the content children are absorbing. Children already have incredible influence over household purchases by affecting their parents buying behaviour. This influence will only continue to grow until they have their own personal purchasing power.

FORGET MILLENNIALS WHAT ABOUT THE IGEN?

11

When these youngsters grow up they will be fluent in the digital language with voice control being commonplace. Early 2017 saw, a 4 year old boy using Siri to call an ambulance which saved his Mums life. The boy used his Mums iPhone, using her thumb to unlock the phone then asked Siri to call for help.

A SOCIAL VOICE NOT TO BE IGNORED

As they grow up the iGen know how to use technology to their advantage, they are social media natives and have a voice and a social following not to be ignored. They can either become a brand advocate or brand adversary, but it can be a thin line between the two. Sharing life experiences via social platforms is second nature, checking in to where they are meeting friends can promote the trendiest hangout. However, they can be quick to highlight dissatisfaction and if a brand does not respond in an appropriate or timely manner this can escalate quickly and go viral. For example, when Fedex delivery driver was caught on camera throwing a parcel over a fence and breaking the contents, the situation quickly went viral racking up nearly 9 million views on youtube forcing Fedex to issue an apology and offer compensation.

On the flip side, one small tweet can create a massive tidal wave of positive brand endorsement, no example demonstrates this better than #NuggsforCarter.

12

It all started with a tweet from Carter Wilkerson a 16 year old boy to Wendy’s, asking how many retweets to get a year's supply of chicken nuggets. With a response of 18 million the game was on to reach the astronomical target. With support from Google, Amazon and Ellen Degeneres, #NuggsforCarter has now reached 3.2 million retweets, has its own emoji and dedicated website with novelty t-shirts the sale of which raises money for charity.

All this achieved with no marketing budget but a social media presence and a playful response to customer enquiries. The cost of a year's supply of Wendy’s chicken nuggets would total $400, positive social media impact...priceless!

HOW DO RETAILERS PREPARE FOR THE IGEN?

We are only just beginning to scratch the surface of understanding iGen and its impacts on retail but we do know that they already have influence on purchasing decisions. This influence will only continue to grow until they have full control over their own purchasing choices.

It's important for retailers to start planning for the change ahead and develop their omnichannel marketing strategies to successfully target the iGen. Part of this comes down to research, what are iGens shopping habits, how do they consume data and experience content, how will this continue to develop over time and what new platforms and devices will become available.

Ok, so no one can completely predict the future and know what the next big social media platform or technology trend will be, but retailers have to react quickly to be in the right places at the right time to target the iGen. For example in 2014, 25 per cent of 13-17 years old left Facebook with other channels such as snapchat having a significant increase in users from that age range.

For the iGen there will be no divide between in-store and online shopping and retail stores need to adapt to create a more social atmosphere, as shopping becomes more recreational rather than essential, with the majority of purchasing happening online.

13

WHAT WE KNOW ABOUT THE IGEN

The iGen has a preference for shopping online and there is a growing trend for ‘comparison shopping’, whereby young shoppers visit many sites looking for the best price before committing to a purchase. Even when they are in store, they compare prices online via their mobile, which highlights the importance for retailers to focus on omnichannel strategies. They are savvy online shoppers always looking for the best deals or discounts and have become accustomed to never paying the full recommended retail price (RRP). Research has also shown that the iGen process information at a much quicker rate, often being able to engage with up to five screens simultaneously, but this makes it a challenge to gain their attention and to keep it.

The language of the iGen is also developing and mostly involves emoticons and emojis, giving users the opportunity to make personalised conversations with hidden context. They also communicate with imagery through platforms like Pinterest, Instagram and Snapchat, which can also leave room for interpretation.

14

DON’T TREAT THEM LIKE MILLENIALS

Ultimately, the only way to successfully reach the iGen is by not treating them the same as millennials. They are savvy shoppers always looking for the best deals, they multi-task across a number of screens at any one time, have shorter attention spans, prefer to consume data in bite sizes and in an image format.

Appealing to their ideals, communicating in their language, in their style at the right time and in the right places will gain the attention and the spending of the iGen.

VISUAL, VALUABLE & QUICK!

15

42016 was the year of retail bankruptcy, from BHS to Austin Reed, retailers didn’t seem to be doing well and 2017 doesn’t seem to hold much promise for things to change. In April 2017, several retail stocks hit new lows, including Urban Outfitters and American Eagle. Ralph Lauren has recently announced the closure of its flagship US store on Fifth Avenue. The future of the bricks and mortar store is looking precarious.

It’s not that people aren’t buying from these brands anymore, it’s just that customers prefer to buy online instead of instore. The US will see online sales reach around $394 billion in 2017 alone. Retailers are seeing their traditional structure being greatly impacted by the internet and online shopping.

But it's not only traditional retailers seeing the impact of the world wide web, Blockbuster shirked its online lending library to focus on a traditional library model, and were made obsolete by online streaming services such as Netflix, Amazon Video and Hulu.

But it’s not all plain sailing for online shopping. While online retailers aren’t concerned with costly overheads such as prime retail space in busy shopping centres, they instead have new concerns brought about by shipping costs.

Whilst brick retailers were safe in the knowledge that when shoppers want an item now, they were the best bet, as the downside to online shopping was the time from click to delivery, but with the rise of next day or even same day delivery, consumers don’t need to leave their house to go shopping.

FREE SHIPPING: THE BANE OF RETAILERS

Amazon, Target and other large corporations can afford to offer free shipping, and absorb the cost of delivery, smaller retailers struggle to do the same.

Customers have come to expect free shipping even when there are apparent costs such as “Spend over £20” to achieve this. They expect the services that they receive from behemoths such as, Amazon, from all online stores.

FUTURE OF ONLINE SHOPPING: BRICKS VS CLICKS

16

However, even some large retailers such as Saks Fifth Avenue, say it's more expensive for them to do home delivery than to have them shop in store. Direct to home supply chain cost is three times higher than a bricks and mortar model. And our environmental impact of ordering one off items or even returning them undercuts any environmental savings made by ordering online.

BRINGING ONLINE BACK INSTORE

Bricks and mortar sales are seeing web-influenced sales instore. Consumers are utilising their smartphones to research a product which they then proceed to buy in store. This method of shopping is expected to reach $1.3 trillion, around 38% of all retail sales.

Retailers can embrace these web-influenced sales by creating an omnichannel strategy which will complement the physical and digital, instead of pitching the two against each other, thereby lowering costs and increasing sales.

17

Whilst retailers are seeing new technologies greatly impacting their traditional model, technology if implemented well can greatly increase sales. Self-service POS terminals can save costs of cashiers, creating staff available to help customers increase their purchases before reaching the exit point.

The retail experience is changing. No longer do consumers wander around shopping centres buying on impulse. Now we shop with knowledge of what we are looking for and are unlikely to shop on a whim. The face of retail is changing, but the stores need to change as well to adapt to the new shopper.

No industry is moving so quickly and fluidly as retail, but retailers need to move as well to meet their clients expectations.

THE SAVVY SHOPPER WITH A LARGE SOCIAL FOLLOWING WHO IS LOOKING TO TURN THEIR

PURCHASE INTO AN EXPERIENCE.

18

5Many industries are seeing technology impact their traditional structure, but none more so than the world of retail. The future of shopping is a hot topic for retailers and we have covered a broad spectrum of ideas and trends to consider the implications for both retailers and consumers.

Over the past few chapters we have looked at the following topics:• Omnichannel• Futuristic Shopping• Future generation- the iGen• Online shopping, bricks vs clicks

These areas all have one thing in common, technology. From omnichannel to the iGen, all aspects of retail are having to adjust their methods with the increase of technology. With online shopping now providing price comparisons, and the iGen looking for an experience with their shopping, retailers must adapt.

The future for retailers isn’t a gloomy one, it’s an exciting time to be part of the retail industry as it adapts to the future shopper, whomever they may be. With online retailers moving towards bricks and mortar, and online shopping being done instore, it’s safe to say that anything goes with retail.

SUMMARY

Want to learn more about how Self-Service iPad Kiosks and Tablet Enclosures can support

your Retail Omnichannel strategy?

UK: +44 (0)1202 892863

USA: 1-888-858-9778

sales@imageholders.com

Get in touch today for your FREE consultation

19

UK: +44 (0)1202 892863USA: 1-888-858-9778 (USA)sales@imageholders.com

42c Cobham Rd, Ferndown Industrial Estate, Wimborne, BH21 7QG.

www.imageholders.com