The Future of Retail

Date:   Tuesday , October 20, 2015

We live in an exciting time. The pace of progress in technology far outstrips the pace at which we are coming up with ideas of its applications. Hence the endless stream of exciting startups that come up with new and innovative ways of applying the technology and changing the way we live our lives. Exciting times indeed.

There are however a few things that seem to take forever to change and are at contrast to everything else that is happening. Take for instance the retail industry- arguably one of the oldest and most established industries. For years, things have been done on a certain way, and the adage \'if it ain\'t broke, don\'t fix it\' seems to be a recurring theme in this sector. Innovation meets inertia, and the result is often slow, sluggish progress. But as Bob Dylan said, \"the times, they are a-changin\". The technology innovation and competition to traditional brick-and-mortar is forcing traditional retailers and even supermarkets to sit up and take notice and start thinking about changing the way we have thought of retail.

In particular focus is on the astronomical adoption of the smartphone. In eight short years since the first iPhone was released by Apple (some people may argue that smartphones existed before that, but let\'s not go there for now), 75 percent or more of the phones sold in the market are smartphones. More importantly \'connected\' phones. Last year, mobile overtook desktop as the #1 way to access the Internet. Retailers have started to realize both the power that is in the hands of the consumer to research before they buy, and their own ability to reach the customer proactively with personalized recommendations.

In the mid to late nineties as the reach of the internet exploded and e-commerce seemed to be engulfing the world, the birth of Amazon, eBay,, and countless other imitators, seemed to suggest that brick-and-mortar is dead. Now, almost 20 years later, brick-and-mortar retail still accounts for more than 90 percent of retail sales. Long live \'the store\'!

Humans are social animals, and as much as the convenience of online shopping is enticing, our very nature thirsts for interaction and exploration. So what does all this mean?

There is not a minute in our daily lives that we are separated from our personal devices (looking at my kids, it seems like a minute is a long time to be separated from the phone!). This presents a huge opportunity for retailers to stay connected with customers in ways never before thought possible. However, it\'s only those retailers who can figure out how to keep the interaction personalized and subtle that will win the race to being effective retailers of the future.

Dealing with promotional emails from e-commerce sites or retailers has become a job in itself, and people setup email accounts just to manage that. Clearly, mass promotion is at best annoying, and given the pace of our lives, hardly effective. It seems so 2000s. The future is about personalization. It\'s about, \"just let me know of things relevant to me\" at the right time and place. Doing this was unimaginable a decade ago. Only a good friend could judge your mood, intent and based on their intimate knowledge of your personality. Just imagine your local supermarket doing that with your shopping needs. Understanding your personal preferences, shopping cycle and budget and suggesting (and notifying) items you may be interested in. Not in an obscene, \"in your face\" way, but in a \'friendly\' manner, with your best interests in focus.

With the advent of big data platforms and cloud technology, processing massive amounts of data in short order and deriving insights into individual shopping behavior and then proactively suggesting products and services is now a reality. There are a few exciting startups that promise just that.

The other big revolution in technology that is quickly showing up in all aspects of our lives is low-energy devices. These can be worn, stuck and plugged in, just about anywhere. They can operate on a battery for several hours, some days and still more that can last years. They are showing up in watches, wearables, thermostats, light switches, beacons and a zillion other devices. Beacons in particular have tremendous potential in the retail setting, mostly because they carry the promise of providing context.

Combining context with personalization is an extremely powerful proposition for retail. In conjunction with mobile, they represent a marketer\'s dream- the ability to reach a shopper with relevant messaging at the right time and place. There is a world of opportunity out there for retailers and startups that can find the right balance by combining these trends, and here is the best part. Everyone wins. The consumer gets a great experience, the retailers have the tools to understand their business and connect with shoppers and the brands can reach shoppers at the point of purchase.

The future of shopping is closer than you think!