As it relates to analytics and the use of new insights based on data, I think the key challenge is the operationalization of insight and the adoption by business stakeholders who are aligned with the different stages of the shopping journey.In my experience data science and analytics teams need better ways to activate their work. Ensuring consumers experience the value of analytics at the physical store level first requires that employees who have those face-to-face interactions leverage new insights as part of their day-to-day work. Making the use of analytics as transparent as possible -- to either people or systems -- is where I think brick-and-mortar retailers should focus their attention. In many cases this is simply too hard, costly and impractical for many retailers struggling with slow to no growth and slim margins who at the same time are pressured to test, experiment and transform their businesses while forces like Amazon continue to disrupt the retail industry.There's no better argument in my view for adopting cloud solutions enabled with the kind of embedded AI that helps businesspeople realize the value of analytics.
I agree completely, but he’s also right about most retailers being risk averse and uncertain as to how to best leverage data and analytics to improve individual shopper outcomes. Over the past several years retailers have rushed to acquire a lot of Big Data and analytics technology without a clear plan for accelerating development and operationalization of business-focused use cases. There is an art to this process that hasn’t played out at scale in most retailers, but must if analytics are to help retailers execute profitable and differentiated in-store experiences.
I think it makes complete sense. This question reads like an “inside/out” approach. Consumers/shoppers don’t care about cross-channel anything. However, it’s clear that they do care about: “fast response time to the customer’s needs and issues (52 percent identifying it as being critical). That’s more important than even a knowledgeable staff that’s always at the ready (47 percent) and rewards for loyalty (42 percent).” Those statements represent the consumer’s perspective, an “outside/in” approach that is supported through cross-channel recognition.
This question varies depending on the maturity of the organization. Larger companies tend to be well down the path with the right skills and technologies, but often struggle because not enough business sponsors participate in the process. Smaller companies struggle to move beyond very simple analysis because the skills required to drive the analytics are scarce. In either case, my view is that the rapidly maturing market for more packaged approaches to Big Data analytics helps organizations involve critical business stakeholders at scale.In most cases, scaling value creation around Big Data is the hardest part and is why the market is sort of teetering. In practice, this means new Artificial Intelligence capabilities that are embedded in the processes and applications used by business people every day. It’s here that the value renders at scale and you create the type of people who appreciate and have interest in engaging in more custom analytical projects.
Gearing your thought process around the consumer’s shopping journey and how both acquisition and engagement programs support these is a good place to begin. Then consider the current source of first-party data and insights about your customers. Progressive marketers in many industries are breaking down the barriers between paid media and advertising, and direct consumer engagement through email, mobile and social channels. Developing creative marketing approaches like those cited here and enabling them based on a single source of consumer insights to power owned, earned and paid media programs is a best practice.
I'm sure Jet does a very nice job using data and analytics to understand their online customers' journeys and architect the experience to be be enjoyable. I do think however that the organizations that work on the e-commerce site probably have little appreciation for physical retail -- either from the customer's point of view or the store associate's. I sense a real opportunity to provide a better omnichannel experience if the workers behind the online and brick-and-mortar stores have a lot more formalized collaboration.
Whole Foods will become a test bed for all of what Amazon has been wanting to test in physical retail at scale. To really understand and scale ideas like Amazon Go, Amazon needs access to real physical retail businesses and this is a fast path. Amazon then has the ready platform and real estate assets to scale what works and continue their retail growth path by taking share from slow moving traditional grocery retail. It’s starting to get a bit cliché, but retailers like those in the supermarket space need to start thinking more like technology and information companies. Otherwise, the lack of other businesses to hedge against like Amazon has will result in wishy-washy efforts that don’t yield any gains and the outcome becomes inevitable.
Price is never going away as possibly the top consideration for most products and this technology will only reinforce this reality. It places immense pressure on retail to be super efficient and responsive and equal pressure on retailers to understand their customers. Some retailers will try to get out in front of price by proactively engaging their customers in a value-added relationship based on interests, life-stage or lifestyle. If they don't then it's too easy for a customer to transact with the lowest-cost provider.
Seems like it creates too much friction, process wise, to be a really high-scale activity. It's a good test however, and I would expect part of their goal is to simplify the experience based on what they are learning. That's as good an objective as anything.
Another way of looking at this is the cannibalization of in-store sales by e-commerce channels. That is the flip-side of the cost problem described here. It suggests to me that retailers need a finer understanding of how their individual customers want to transact with them and design a business around that which can adapt over time. I know that's very hard, but the future of retail seems all about greater specificity in terms of a market/demand focus that is powered by data and analytics.
I do think Walmart is the right company to lead this sort of initiative for the industry. They have the resources and ultimately the most business at stake. I think Amazon has really shaken the foundation of retail business models and this is an example of that. Amazon's forays into different businesses like self-service brick-and-mortar are mistaken as major bets on their part. Amazon have embraced test-and-learn and are willing to place bets and make the requisite investments (and they can afford it because they can hedge with businesses like AWS). That makes it really hard for traditional retailers to compete -- their legacy businesses are like a boat anchor on innovation. As a result, you see some like Target moving away from innovation to short-term ideas aimed at fixing what are really foundational problems. Retailers different from Walmart, with far fewer resources, should band together, work with NRF or otherwise figure out a method to collectively work on innovating. I don’t think Walmart’s core customers care, except in the event that the company starts to struggle like many retailers because innovation experiments that add value never see the light of day in the stores.
From my experience with customers, the problem is that advertising in a digital context has remained a separate function, budget and activity apart from the broader digital marketing efforts of retailers as well as consumer goods organizations. While targeting messages at select audiences is a benefit of digital ads over mass media channels, when it’s not stitched into a broader customer acquisition and engagement strategy you lose a lot of the potential benefits that extend into the dialogs and orchestrated marketing that is possible on the back end of converting an eyeball to a known consumer. The problem is that silos persist among paid, owned and earned media channels in many companies and needs to be resolved at technical and business process levels. This is challenging because agencies tend to control the dialog around media, while internal staff control direct digital consumer engagement. These groups need to work in unison.
I think they are both correct. The problem with technology is that it’s often positioned as the difference-maker by itself (remember the history of the CRM market and the challenges companies have with their Big Data projects). Instead, it takes the logical use of technology along with people and processes to make a difference in retail. From what I’ve observed, I think part of the challenge traditional retailers face is the distinction between the cultures of their e-commerce/analytics operations and their brick-and-mortar stores. The staffing of the groups, the pay scales and general work environments are so different that it’s hard to achieve the omnichannel benefits everyone is shooting for. I’d expect retailers who survive the current storm to do a good job of resolving these differences to create one face for the market. It will start with some combination of people and technology.
It's curious that they chose the toy department to use as the pilot. In my experience, shopping for toys is typically around a birthday gift for one of my children's friends. That being the case, I can't make the time for delivery since I'm buying the day before the party. I like the idea, but other categories like patio furniture might be better. I also don't think it's a completely useful solution to the out-of-stock situation since the reason shoppers most often visit the store is to buy at that point in time. Delivery later isn't very convenient unless it fits the category.
I think it's becoming a bigger problem as market trends accelerate (online sales) at the same time that investments in online channels increase. Anticipating growth, retailers are being let down by slowing in-store sales that offset gains in online channels. I think it's raising the issue of integration and working to architect the retail business as a unit, as opposed to operating stores and online separately. The places where integration is happening (click and collect, buy online/pickup in store, buy online/return in store) are not sufficient from a leverage standpoint. It highlights to a large degree how retailers are not using insights into the online to offline shopping journey to optimize their operations fast enough.