The Future: Converged Retailing
As consumers become more digitally connected than ever before, with product information and price comparisons at their fingertips, brand loyalty isn’t what it used to be. In response, the industry may be readying itself for a shift that puts consumers in the driver’s seat, dictating what they want, wherever they choose. “Retailers will have to offer a personalized, consistent experience across all channels to stay competitive and be willing to listen to each consumer’s preferences,” said Mike Webster, senior VP and general manager of retail and hospitality for Atlanta-based NCR Corp., a technology company whose assisted- and self-service solutions and support services address the needs of retail, hospitality, financial and other organizations around the world. Chain Store Age spoke with Webster about NCR’s interpretation of “converged retail” and how it has the potential to change the face of the industry forever. How would you describe “converged retailing?”
The intimate relationship between merchant and consumer is currently lost. Retailers are trying to connect with us via so many platforms, and personalization has faded along the way. Merchants try to push Web recommendation-predictions, but these are basically guesses. The future of the retail industry is going to move away from a business-to-consumer world and pick up a consumer-to-business model, where shoppers will be calling the shots and dictating their preferences. To do so, all channels will have to converge into one. This will allow the retailer to begin a transaction in one channel and add value in another.
Why is there a challenge with personalization right now?
It’s hard for merchants to create a consistent, personalized experience across various platforms. There remains a big focus on multichannel strategy, but multichannel is just another way to connect with the consumer, and it is inconsistent. Merchants often send different messages to different platforms. In reality, retailers don’t know that much about individual shoppers. Shoppers may be getting promotions about dog food from a pet retailer when they actually have a cat — the retailer only knows that they have a pet. It’s also a struggle for retailers to harmonize all of the fragmented data out there — from social media to the mobile world — to form a more holistic view of the consumer.
Merchants have to figure out a way to really engage each shopper to better understand their preferences and how they want to be served. In the future, consumers will instead be able to co-create with the retailer, so their presence can be detected in any channel and preferences can be met.
How would a shopper declare their preferences?
Sophisticated software from third-party providers can enable retailers to learn about each shopper on a personalized level. The retailer will ask simple questions via the Web, mobile device or at checkout in a store to hone in on their needs and wants. Shoppers don’t want to be inundated with unrelated promotions, so merchants can make their life easier. Soon, a whole profile can be developed about a shopper so the retailer could know that they prefer certain types of organic products for their six-month-old baby. In a store, a phone number or loyalty card could also be handed over so the cashier would know the shopper doesn’t want a receipt with their purchase (or wants the receipt printed in a certain language).
How will in-store technology reflect this change?
Digital signage can create a conversation with a shopper in a personalized, targeted way. Right now, it’s broadcasting a message, but in the next few years, shoppers will be able to interact with it by swiping a loyalty card, for example, that clues the technology into who they are. The signage, or even a kiosk, can also suggest items in the store that would match what they bought online last month.
How close are we to this reality?
We have already seen it in small pieces, but it’s probably the start to a three- to five-year journey. Personalization will be more prevalent in the next few years, and the results will be very powerful for those that take advantage of the strategy.