By Brian Walker
CEO & Founder, Retail Doctor Group
One of the biggest core concerns about the evolving customer is how we are going to market to the next generation. 10 years from now, it’s the millennials and the generation after them who are focused on a few key things that will make marketing difficult without AI:
Privacy: There is a growing movement of young people who want to get off social media. They don’t want to do these streams of updates. They prefer a small group, a trust group, a private-messaging group with just a handful or two of their besties. They don’t want to be on public media and so they escape social media by keeping their privacy settings locked and their groups invite-only. They register a “fake” email where they collect retail spam, so marketing is out of the question. Every young person knows how to do that nowadays, and also how to dynamically change their emails as their needs change.
As new laws come in, you can’t communicate with them that way, anyway. Every form of marketing will have to be trust-based and privacy-based for you to be able to talk to these customers. You need to get to know them, not just offer them a “Click the button if you want to receive this email” option.
The “overwhelm of change” is what’s driving this, but also the overwhelm of constantly needing to be connected, switched on, tuned in. Turning on privacy turns off everything unwanted, period.
People now value their privacy. That’s not to say they didn’t before, but privacy has now become more attached to trust than it was before. Take Apple Pay, for instance. The reason Apple Pay is so popular is because with them, it’s not just about the transaction fees; it’s all about the data, too. Data is the new oil, as everyone’s been saying for years.
‘The Era of Antisocial Social Media,’ an article featured in Harvard Business Review tells how young people just weren’t available on social media anymore. Marketers were dumbfounded and didn’t know how to connect.
This is just a precursor to what we’re going to see: a huge change in everything that we’re doing. Some of the massive changes have been accelerated, specifically because of pandemic times.
Twilio is a company that created an app that has about a 94% market share of the identity-verification space. Every time a user gets sent a text message to verify their identity or an in-app purchase notification, it’s powered by Twilio. And when Twilio surveyed their connected users about by how many years Covid-19 had accelerated the schedule of their digital communication strategy, 96% of those surveyed agreed they’d been accelerated by 6 years.
The remaining 4% said 10+ years.
Technological changes in the retail space
Brian Walker, CEO of Retail Doctor Group, agrees. “We’re moving into a world where the physical asset might not be the primary means of communication and we are going to be seeing much more augmented reality and virtual settings, such as the remote classrooms of today. Hospitals, education, and retail spaces will see a decrease in parking requirements as autonomous cars become the norm.”
Rispin agrees. “A lot of science fiction movies and books had already predicted what I call “robo-vehicles” a long time ago.” And which industry will robo-vehicles change? “Every single industry in the world,” says Rispin. “It will even change the insurance industry, because who is going to insure a driver when there is no driver?”
“It will change logistics, forever.” Rispin continues. Really slow driverless delivery trucks navigate hectic Chinese traffic every minute of every day, but they haven’t hit or killed anyone. They’re doing incredible things there. “Think about tourism, about even owning a car anymore.”
Rispin works with all the big car manufacturers. “They’ve all got programs, and VW is the latest one. The VW Group has admitted they’ve got a program called Project T, and their 6-month strategy is to catch up to Tesla. But I can tell you that Tesla will not sell you “a car” in the next 5 years. They’ll sell you a “car plan”, so the vehicle moves from ownership to rental effectively.”
“The goal here is to have a monthly service or subscription fee that gives you access to the Tesla network. You’ll have an app that’s similar to the Uber app: You’ll hit the button and your vehicle will arrive. Your end-user licence agreement or EULA will have some sort of clause that if you buy a Tesla and join any kind of car sharing program, it must be the Tesla car-sharing program. It can’t be somebody else’s program if you own a Tesla.”
Brian Walker refers to this as the autonomous revenue model, where you’ll use your ride-share contract to get to your local shopping centre with your own vehicle, and then start earning money on that vehicle by using it for ride sharing with other Tesla owners who are all doing the same thing with their own vehicles. By the time you’re done in the shopping centre, your vehicle will be back waiting to take you home, instead of filling up car parks wherever you go.
“Elon Musk said this would be our reality by 2025. He’s an optimistic guy that gets people moving and inspired to make big changes, and I appreciate him for that but I think (in looking at how far behind we are in the IoT) that 2030 is probably a better estimate for autonomous revenue models like these,” says Rispin.
The question is, will people even still be visiting shopping centres in person anymore by then? “The whole retail experience is set to change in ways we have yet to imagine,” says Brian.
The future of retail space
Indeed. Shops will change. The future of retail seems to lie more in temporary or pop-up shops, but located within shopping centres, shopping districts, and buildings that offer really unique shopping experiences. Take Gillette, for instance, who sponsored a space created unique experiences within that space for their customers.
For one month, Gillette went back to more traditional shaving techniques and they featured packages for Father’s Day that included the straight edge razor and their own razor, challenging dads everywhere to try the Gillette difference that won’t cut you. They [Gillette] had all sorts of goodies and things, beard treatments and so on that customers could try. But here’s the best part: they had no inventory.
“But you could scan any product and have it added directly to your shopping cart. They’d send it directly to your home or have it bundled and waiting for you in just a few minutes at the front desk. It was a brand-activation space, and I think that’s what we’re going to see much more of in the future,” says Rispin.
Emerging business and brands in the retail space
Having a truly integrated system is key. The biggest shift in marketing when it comes to retail, wholesale, shopping malls, or digital communications is data. Adobe recognised the opportunity in big data when they began to understand that the future of retail lay not in selling their once-off standalone product from a shelf, but rather in creating a service that many others could not rival. A trillion+ data points collect information in-store, online, at points-of-sale, through pop-ups, and at other sales points where shoppers may make a purchase.
Adobe? Who would have thought?
Other brands making big investments into the future are Google, Uber, and Amazon. “It’s fascinating to watch how brands like these are investing across industries,” notes Dr Walker.
“The biggest investor in ecommerce anywhere in the world right now is Amazon, but they don’t like sharing their hard-earned data. However, Adobe has access to their data through the adverts run on Amazon’s e-commerce platforms.” says Rispin. “When triggered, Adobe gets data sent to them. So, they know what products consumers have shopped or browsed. Amazon has an API feed that will show you hot products by the hour, every hour.”
“An integrated system will give you a consistent customer view,” continues Rispin. “Customer analytics from Adobe during Covid-19 indicate that consumers spent over $34 billion during Black Friday Cyber Monday (BFCM) weekend alone. That’s more than 20% year-on-year growth! How can it possibly be done in a Covid year?”
Despite the massive unemployment that Covid-19 caused, sales were off the charts since March 2020. Data indicates a $52 billion difference, just in America. The biggest growth since the shift to online? Home and garden.
The Fourth Industrial Revolution is already well on its way, and retailers are only just at the beginning of it. The future of retail is going to be experiential, inspirational, and a point of consummation.
Change management and how retailers can adapt to the future
Retail needs to accelerate beyond the beginning of the Fourth Industrial Revolution. To do that, “Retailers need to focus on data, and the best resource for this is Adobe Analytics,” says Rispin. “If you’re only doing Google Analytics, look at Adobe Analytics. A free trial can integrate your entire customer journey in a single view, with customer flows like you’ve never seen before.”
Rispin continues, “Imagine you had web logs of your customer’s journey across your property, the delivery system, in-home, browsing and more all at your literal fingertips? If you’re held back by the scope of implementing integrated systems, you need a reverse mentor.”
Reverse mentoring brings in graduates who need to intern as part of their commerce degree, their business degree, or their IT degree. They’re hungry for commercial experience and will turn up free of charge in most cases. With some universities, a small fee per hour, or a starting fee, may apply.
A reverse mentoring program will help you deploy all those systems that you thought you would never be able to implement yourself. Dispel the fear amongst your staff and get it done in weeks, not the months or years it would have taken you. You will be amazed at what young people now know about your brand. Accelerate the knowledge gap with reverse mentoring programs.
The future of retail looks a lot like the future of your home, actually. Your AI will wake you in the morning, playing only the news you want to hear. Your 3D printer will run off the clothes you want to wear for the day. Your AI of choice will then run through your schedule and let you know what your clients are wearing for the day. It will schedule your tasks and chores, order groceries and pay the bills before your autonomous car picks you up and takes you where you need to go.
Many millions of customers are already doing this. They’re geared for the future and expecting you to be, also. So many of these connected customers turn up to shops and are disappointed because that shop is just not ready to receive their business in the customer’s preferred format. They’re “backwards”, unable to return something from an online order back into your inventory or enact a store transfer automatically.
“This is what consumers are demanding now,” concludes Rispin. “This is the future of retail. Are you ready?”
This blog post forms part of a podcast series on The Future of Retail, listen to the original podcast here, and be sure to subscribe for more in-depth views and information on all things retail.
Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected partner member of the global retail expert’s alliance Ebeltoft Group. As an Internationally renowned retail expert and experienced retail speaker, Brian understands what makes retailers and brands successful. Want to learn more about the future of retail? Contact us on +61 2 9460 2882 or [email protected].