What should retailers and customers expect to see take off in 2019? Kylie Gleeson-Long, ANZ managing director of dunhumby believes voice search, data monetisation and a new approach to customer experiences will shape the future of the retail industry.
Online global giants such as Amazon are equipped with extensive knowledge of where their customers shop and when, what they buy and what they are searching for. They are harnessing data science to customise their offerings and move into physical stores with unique customer insights and customised experiences.
Local grocery chains such as Coles and Woolworths are also increasingly investing in their data ecosystems and hiring data scientists to help them to interpret and analyse the massive amounts of data on their customers’ buying preferences and shopping habits. This transactional data once collected and analysed provides an untapped revenue stream for areas such as market research and advertising.
As the utilisation of data science grows, in 2019 we will likely see more hyper-localised offerings, greater personalisation and a revamp of loyalty programs as retailers begin to action their data insights.
Experiences Will be Prioritised Over Price
Discounts alone won’t cut it in today’s retail landscape. Customers are demanding more and more premium products and bespoke shopping experiences and are willing to pay for it as long as they see value. They are looking for hyper-personalisation: imported products specific to their demographics; multiple ways to pay; various channels of communication and engaging promotions.
Heading into 2019, we will see consumers increasingly prioritising experiences over price, and large chain grocery stores like Woolworths are beginning to listen to their data and using the insights to innovate their digital offerings.
Big retailers have realised that customers care less about how much something costs and are willing to pay more for convenience and customised experiences, such as Coles’ ‘Click & Collect’ offering. Brands turning everyday chores like grocery shopping into experiences, both in-store and online, will demonstrate ongoing value to their customer-base in 2019.
Loyalty Points Will Become Passé
Moving into 2019, retailers will need to rethink their approach to loyalty. Loyalty programs are struggling to keep pace with the growing needs and expectations of today’s modern shopper. The evolution of loyalty has meant the need to shift from a focus from “earning and redeeming” to consistent and proactive customer engagement across all touchpoints.
Customers are now demanding loyalty programs and initiatives that provide instant gratification and memorable or premium experiences. Whether they are searching for product information, making an online purchase or browsing in the store, customers want to be recognised and have their needs reflected in the offerings and services provided. Loyalty should be recognised with and without a physical card or offer, however, we know that brands often struggle with measuring the ROI of such programmes.
Voice Assistants Will Become a Key Customer Touchpoint
The convergence of chatbots and virtual voice assistants has the potential to transform the retail experience, turning voice assistant technology into a customer service functionality and major loyalty builder. Think of the amount of data about customer preferences you could also retrieve from these devices.
For example, does Gloria Jeans know what percentage of its customers prefer low fat milk? Imagine a scenario where you wake up in the morning and Alexa reminds you of a sale or unused rewards points at Myer. In the US, many retailers have already started reaping the rewards of voice assistant technologies as customer touchpoints. Pizza Hut, for example, was one of the first few companies to offer voice assistant supported deliveries via a partnership with Alexa announced around two years ago.
Next year will only be the tip of the iceberg for this technology to really infiltrate and flourish in the local market over the next three to five years
Retailers Will Turn Data Into Dollars
Online behemoths such as Amazon are successfully taking the learnings from their transactional data and applying it to building physical stores with optimum range and layout. Retailers need to do the reverse—learn from their data to inform their existing category layouts.
Retailers have a treasure trove of transactional data, such as purchase history, waiting to be tapped into. There are vast opportunities to sell this data to create new revenue streams via advertising, market research and business intelligence.
Global online giants like Amazon have moved very quickly to create revenue streams out of their data, but in 2019 we’ll likely see a lot more of this from not just retailers, but other industries as well that rely on customer data insights. Yet retailers are in an especially strong position, because transactional data about what people buy is valuable for a lot of other businesses.
Customer data insights are now being controlled and accessed by customers themselves, with thanks to newly introduced General Data Protection Regulation (GDPR) laws. With data portability a new reality for customers, organisations will be looking into progressive ways for customers to take control of how their data is being used, in a way that is mutually beneficial for the customer and the business.
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