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Written by: Anthony T. Laudico and Kim Mckesson | SpencerStuart
Over just the past two years, the Shoptalk retail conference in Las Vegas has grown from 3,100 attendees to 8,400 — an increase of more than 170 percent. The event’s focus has also evolved to keep up with the shifting retail landscape, which — despite dramatic changes — is still growing: Retail saw 3.5 percent growth in 2017, which outpaced the GDP’s growth rate of 2.3 percent.
This year’s four-day conference centered around the future of retail and how technology will transform the sector to meet the demands of the consumer. With that in mind, here are five key issues retail leaders should keep on their radar:
1. The customer experience is key
Increasingly, customers expect a cohesive, personalized experience, so retailers need to focus on providing a seamless, integrated customer journey. Manifestations include fast, on-demand delivery, and a bricks-and-mortar presence that organically integrates mobile and provides easy checkout. It’s a difficult balancing act, but successful companies will merge the accessibility of digital with the comfort of personal interactions (hence the increasingly popular term “phygital”).
At Sunday’s keynote discussion, a conversation about Amazon Go, the checkout-free grocery store that the online titan recently opened in Seattle, centered on the fact that the shop is — at its core — a convenience store. The shop illustrates the growing trend toward expediency and solving the pain point of checkout, as companies such as Macy’s and B.J.’s Wholesale Club are also moving toward mobile checkout in their stores.
2. A tailored, data-enriched physical presence is the new trend
Several notable chains have closed (Toys R Us being the latest), but other heritage brands have repositioned themselves as “classic” and — along with start-ups such as Allbirds or Outdoor Voices — are leading the charge to create personal shopping experiences. Macy’s is increasing its private brand stock from 29% to 41%, for instance, which gives the company more control over its supply chain and helps ensure a more curated experience. Meanwhile, startups are creating a more modern, engaging approach with fewer locations, but augmenting the personal touch with data insights. This has become the new goal of a bricks-and-mortar presence: to create an emotional response by using customer data and a tailored approach to consumer preferences.
3. Technology will continue to evolve
Fifty percent of shopping will be carried out by voice and 45 percent of purchases will be made on mobile devices within two years, according to Michael Haswell, the director of business development, retail and shopping at Google. As voice technology expands, however, customers will want increased personalization and the opportunity for more complex engagement (i.e., a smart speaker that recommends a dinner menu, rather than simply helps create a list). Similarly, a barrier to seamless online clothes shopping is the wide variability of sizes, so it would be beneficial for clothing companies to create a way to incorporate augmented reality to provide accurate sizing. The bottom line: To fully incorporate technology into their strategic vision, companies need to consider where tech could take them rather than just respond to existing opportunities.
Related: Finding New Revenue Streams in Digital Transformation
4. Demand will grow for tech-savvy leaders
To stay abreast of trends, leaders need to be nimble and create cultures of innovation where people can move faster to improve speed to market. Indeed, the breadth of leadership skills has expanded to include digital and online, omnichannel, data and analytics.
Some organizations are responding by creating partnerships among the chief technology officer, chief information officer and chief digital officer, where responsibilities are divided in a traditional way but the team operates within a highly collaborative culture. However they achieve this goal, retailers need to focus on finding strategic leaders who are able to manage complexity and make decisions with incomplete and ever-changing information. They also need to find the talent required to translate and execute a large-scale technology agenda — in many cases, retailers will have to look outside the sector for leaders with specialized expertise, considering sectors like hospitality, financial services and high tech.
5. Diversity in retail continues to be a focus
In an environment that’s increasingly sensitive about diversity, 30 percent of Shoptalk’s speakers were women. This parallels the rise in female directors on U.S. retail boards , which increased to 23 percent from 21 percent the previous year. Notably, organizations that don’t commit to improving gender diversity not only risk losing out on a vast talent pool, but profits: According to McKinsey research, companies in the top quartile for gender diversity were 15 percent more likely to have financial returns above their respective national industry medians.
Conclusion
Clearly, it is not news that companies need to adapt to an increasingly digital environment. What is new, though, is the combination of a personal element with high-tech insight to personalize the consumer experience. Customers now want — and increasingly, expect — a bespoke experience in retail. The brands that can provide this are the ones who will succeed in the coming years, while those who are slow to adapt will be left behind.