The tailing off of the e-commerce boom will continue, making an omnichannel retail strategy imperative. Brick and mortar retail will get a boost from this, but these days stores can do more with less. The latest technology ensures that the transition between online shopping and in-store shopping is seamless. Here is an overview of the latest innovations presented at the American retail trade fair NRF 2023 in January.
Access and get started
With its ‘5G Edge Cashierless Checkout’, Verizon relies on an express shopping experience and the convenience of an autonomous checkout. Using computer vision and machine learning, every item that customers touch is recognized and logged (and removed again when it’s put back on the shelf). A digital receipt for the purchase is sent within two minutes of leaving the store. The idea is that people walk through the store and don’t have to interact with sales staff, self-checkouts or stand in line.
While the Amazon Go concept was arguably the pilot, Verizon’s sophisticated camera technology is more streamlined, accurate, and cost-effective for retailers. That’s what James Hughes, Managing Principal at Verizon Enterprise Solutions, said about FashionUnited at the show. In pre-launch testing, Verizon found it reduced transaction time by half, increased transactions by 78 percent, and increased revenue by 138 percent.
‘Buy Now Pay Later’
‘Buy Now Pay Later’ will continue to gain traction in the apparel industry, helping consumers shop without worrying too much about their current bank balance. Square and Afterpay merged a year ago. According to Paige Fitzgerald, director of business strategy and partnerships at Afterpay and Cash App, speaking at NRF, fashion and beauty are Afterpay’s bread and butter.
Alternative payment plans are an opportunity to connect with Generation Z, known as the ‘Generation of Realism’ who, as digital natives, have little tolerance for friction. They are credit averse, having experienced significant financial crises in their lives, from the aftermath of the 2008 recession to a global pandemic and the current looming recession. “It’s about bringing ecosystems together to connect merchants with shoppers,” says Fitzgerald. “Customers come to the app to find merchants where they can use ‘Buy Now Pay Later’.”
According to data, despite the looming macroeconomic turmoil, Black Friday and Cyber Monday rebates have sparked some enthusiasm among people, and Gen Z are particularly resilient and unwilling to cut back on spending. Content consumption by Gen Z members is forcing retailers to present themselves in new ways. One of them is expanding their omnichannel approach to include what is also known as ‘conversational commerce’. Seamless integration between mobile and retail is key to meet customer expectations. This leads to an increased demand for shopping via apps like Siri, Alexa or Cortana, which are firmly integrated into people’s daily lives, both during working hours and during free time.
Shopping via SMS or chat
Retailers mainly sell their goods through four channels, but they are increasingly expected to be everywhere. Youtube, TikTok and Instagram are the most important right now, but Arianne Parisi, SVP, chief digital officer at JD North America, told the NRF audience that retailers need to think more long-term: “Test new channels and learn about them,” she advised, “but stick to the channels that fit your brand. It’s not always about the return on investment. Separate the commercial expectation from the need to participate,” she advised.
Google Business Messages aims to eliminate the frustrating loop that customers often find themselves in when chatting with bots. Their new technology allows conversations to stay open for 30 days and the conversation history is easily accessible. Google estimates that if the dialogue continues up to and beyond the moment of conversion, customers are 77 percent more likely to make a purchase, leading to relationship building.
Customer retention is almost more important than acquiring new customers, and retailers should increase their efforts to retain their loyal customers. Acquisition is costly, so rewarding and encouraging positive spending behaviors from existing customers is an important strategy. Loyalty programs that are effective in omnichannel engagements can appeal to younger people. Automation will play a key role this year and brands should look hard at personalized marketing, such as sending out birthday discounts. Partnerships are important and strategic alignment or leveraging partnerships can increase a brand’s exposure to existing customers and help reach new ones.
Live shopping gives sellers the opportunity to showcase their products and customers the opportunity to learn about products, ask questions, comment on them and ultimately buy in real-time while being entertained. According to Arianne Parisi, SVP, chief digital officer at JD North America, live shopping is a way to bridge the gap between in-store and online. A hybrid of Instagram Live and the home shopping network model, events that are successfully marketed can result in widespread awareness, discount promotions that are only valid for as long as the live stream lasts, and the shopping experience can be a highly engaging social experience.
This article was previously published on FashionUnited.uk. Translation and editing: Barbara Russ