Key takeaways from #NRF16
What’s next in retail: reporting from the frontlines of Retail’s BIG Show 2016.
January 21, 2016
Consumers want more than just a product from brands. We’re living in the age of the experience economy, and the stakes have never been higher for retailers to deliver memorable experiences that capture the hearts and minds of their customers.
At NRF 2016, we heard why industry experts believe that personalization, convenience, frictionless experiences, and value-alignment are the essential ingredients to win customers’ business and brand loyalty. We expect to see these key themes drive the retail industry in the year ahead.
Retail’s BIG Show 2016 in full swing.
Hyper-personalization is the next big focus for retailers—but the phenomenon didn’t happen overnight or by accident. It’s the confluence of various factors and innovations hitting the retail industry at once.
First, data availability and big data analysis tools have made it possible to process and analyze customer behaviors in near real-time.
Second, the mindset of the modern consumer has shifted. Many consumers are open to giving retailers access to their personal information, so long as they get a better experience in return. This “give and get” relationship enables retailers to deliver highly customized, emotionally connected, curated experiences.
Finally, retailers are understanding the importance and value of individualized commerce, going beyond group segmentation and demographics to understand each consumer at the moment of engagement, a different and arguably far more profitable way of doing business.
"Convenience" is subjective. To the inquisitive customer, the store associate needs to deliver convenience with information (e.g., product details and specifications, complimentary products, customer reviews, and use recommendations) to inform purchasing decisions. To paraphrase Sephora CIO Savio Thattil here at NRF, the associate must leapfrog the customer in product knowledge to drive added value.
For the customer on-the-go, innovations like self-checkout, mobile wallet, and on-demand delivery provide the ultimate convenience. This year at NRF, it’s clear that retailers must balance the art and science of customer segmentations and data analysis to meet their customers where they are.
Retailers are going beyond group segmentation and demographics to understand each consumer at the moment of engagement—a different and arguably far more profitable way of doing business.
In our increasingly value-based and sharing economy, retailers build trust through delivering reliable, repeatable, and reputable products and services through all their touch points. They create a frictionless experience by eliminating points of resistance and building trust in the motion of engagement. Retailers are also experiencing the shift to shorter, faster, and more frequent micro-moments of engagement across touch points that reach the customer where they are.
Digital has disrupted retail just like Uber has disrupted transportation. Uber has provided a frictionless end-to-end experience by removing barriers (e.g., providing the driver information and no-action payment), increasing trust of service through repeated satisfaction, and ultimately delighting the customer.
Retailers must build trust with their customers so that they feel secure sharing personal information, which then enables the retailer to provide frictionless micro-moments of customer engagement.
Our values drive our actions and behaviors as consumers. And likewise, a retailer’s values should help drive the actions and behaviors of its brand.
Retailers need to be firmly grounded in their values and beliefs, and understand how they align or vary from their consumers’ values and beliefs— and, in turn, how the brand/product affects customers’ emotions. Strong brands will inevitably delight some while repulsing others.
Whether the values are focused on price, performance, luxury, sustainability, local/community impact, or other factors that matter to consumers today, retailers should seek differentiation on the basis of values. Further, retailers need to engage in thoughtful conversations with their customers to ensure they have a values–aligned transaction.
As we reflect on NRF 2016, we’re excited about enabling our clients to thrive in the experience economy by operationalizing these concepts. Stay tuned for more—it’s going to be a busy year!