Global Retail - a Sector Driven by Technology.
1. What have been your top three highlights of 2018 so far?
The customer, technology and collaboration.
There are no retail strategies or plans where the customer isn’t discussed. We are even seeing new roles appear in very influential companies - Nike recently created the position of ‘Chief Customer Officer’ to make sure that the customer stays central to the decision making process.
Technology is something no one wants to ignore but retailers understand that not all of them have it in their DNA so we are seeing more partnerships and collaboration between different companies. For example, Carrefour have partnered with Google to boost the omnichannel business with solutions ranging from voice ordering to in-store shopping. Together they are opening an innovation lab where Carrefour engineers will work alongside Google Cloud AI specialists in order to create new consumer experiences in light of new retail trends about consumer preferences. This is a great example of how non-tech companies can leverage tech companies to define their strategy and roadmap.
"Amazon has evolved Alexa…with the Echo Look they're able to give customers recommendations based on visual data collected by the device…which is pretty quirky for those who want to try the latest technology in conjunction with new purchasing channels!"
2. We predicted that technology would drive some big changes in global retail this year. Do you think we’re starting to see these yet?
Unfortunately, this has been slower than expected. What we are definitely seeing is how retailers that have embraced the digital era are growing rapidly and connecting with the consumer, while the more traditional retailers that can’t adapt to change so easily are suffering.
Technology can’t change things by itself, it is the culture that needs to change in the retailer. If you look at traditional retailers, their technology teams (IT team) are still very reactive and firefighting legacy systems. This is a stark comparison to the retailers born into eCommerce who have technology within their DNA and they can leverage this technology much faster.
3. And, if so, which big changes have been key? If not – why do you think they haven’t taken off?
Let’s start with the positives and the yes! And of course with Amazon and Alexa…it has now launched the Echo Look which gives customers style advice based on visual data it collects…pretty quirky!
Another great example of creating experience through technology comes from Argos, where now through the app you can access an Augmented Reality section for Lego. This allows you to see the model and zoom into intricate details before you decide to buy.
Retailers are really beginning to make the most of mobile as a key channel - connecting with consumers and making their transition from browsing to purchasing ever easier. See below for siz examples of the ideal in-app Mobile Payment Journey.
On the negative side however, House of Fraser is the latest example we have heard of needing to close down stores to survive - and that is despite all its efforts with tech leadership over the last few years.
"Through the Argos app you can access an Augmented Reality section for Lego where you can see the chosen model and zoom into intricate details before you decide to buy."
4. We revealed some quite shocking stats around data back in January. And with GDPR coming into full effect, there’s probably never been a bigger focus on data. How do you think this has changed Global Retail – and what changes are still to come?
As I spoke about in my previous blog, data has been the oil in the lamp of many retailers. And they were all looking to get as much as possible from their shoppers to basically somehow improve sales. There are three key considerations for retailers that will make them change their interactions with their shoppers.
Up to now, data hasn’t been always been managed appropriately, with retailers using email addresses as a marketing tool. Here comes the first GDPR regulation – CONSENT – now retailers need shopper consent to send them anything.
The second use of data is around personalisation and creating segments of shoppers to target products. Now retailers need to fully inform the customer and give them the opportunity to object to this form of contact. Depending on where the retailer is getting the data from it might have legal effects.
And lastly data security…retailers are going to have to invest heavily in their legacy IT systems to make sure that all security and protection standards are met. New security breaches will have bigger consequences with GDPR.
Left to right:
1. Marcado Livre – the largest marketplace in Brazil has a very neat way to present payment methods. And they show payment methods at the homepage to create trust and show security.
2. Douglas uses the Luhn algorithm to sense check card numbers, expiry dates and CVVs before sending for authorisation.
3. Amazon allows you to buy from product pages - skipping the basket page – in other words a whole step.
5. Are there any sectors within retail that you think eCommerce isn’t taking full advantage of? How do you think this could change?
I would say B2B companies, or as some call them, ‘B2B2C’ companies.
We are now working more closely with them from two angles. Firstly, as they set up a direct consumer approach online. This will allow retailers to understand their shopper better and have a direct interaction with them as well as greater control over the brand.
On the other side we are working with them to move away from the inefficiencies of the B2B purchasing journey, mainly at the payment stage. Most of the payments for B2B transactions are driven by the ERP system, which is not optimised to take a payment, hence they were relying on cash or cheque. Now we are working with many brands to help them through this complexity. We also assisting B2B companies with improving security and conforming to regulation of electronic payments to reduce risk and allow them to receive their money faster.
This is disrupting the B2B industry which is also being transformed by the digital era.
Left to right:
1. Amazon also gives you the handy option to 'slide to pay'.
2. ASOS uses Klarna (a growing payment method) as an advertisment to shoppers, encouraging them to 'buy now - pay later' on the homepage!
3. Canon reassures on security with a lock icon on the payment page.
6. Finally, what are you looking forward to the most in the second half of 2018?
It is still expected to be a tough year for retail. But, I am quite excited about the new innovations that tough times can also bring.
We will see more data usage at levels our human brain can’t understand, which is exciting! We are already piloting our Intelligent Payment product suite (Intelligent Account Verification, Global Account Updater, etc.), all based in AI and machine learning. We have a lot of global retailers waiting to try them - so I am looking forward to seeing the first results.