The analyst firm IDC recently published a new research report titled “IDC FutureScape: Worldwide Retail 2016 Predictions.” In a recent webinar the author of the research, Leslie Hand, VP of Retail Insights at IDC, made these ten predictions for the global retail market in 2016:
1. By 2016, 75% of born-digital retailers do not even consider omnichannel commerce platforms that aren’t cloud-based and fundamentally mobile
2. By 2018, recommendation engines and forecasting will converge on personalisation and machine learning, creating a foundation for collaboration among merchandising and digital marketing
3. By 2017, 85% of customers expect one click-away commerce and fulfilment from all retailers — and those retailers will beat peer revenue growth by 200 base points
4. By 2017, 90% of the top 100 global retailers will have enabled multifactor payment authorisation in-store, with NFC finger prints and contactless payments playing a major role
5. By 2017, digitised “brick-and-mortar” stores will provide retailers with new sources of data to convert 50% of shoppers from casual to loyal purchases through digital experiences
6. By 2016, 40% of the top 100 global retailers will encrypt all customer data in flight and at rest, declaring “Trusted Data certification,” with a 25% gain in competitive wallet share
7. By 2017, fully integrated omnicommerce platforms get selected two times more than platforms that require “custom” integration between store, online, and mobile commerce capabilities
8. By 2018, operationalising omnichannel will require omnichannel commerce, IoT and social convergence, and retail laggards will close ten times more stores than peers to stay in business
9. By 2017, the next wave of omnichannel retailers invest in fulfilment “your” way, driving dozens of retailers to make new supply chain analytics, planning and execution investments
10. In 2016, 10 large retailers will complete inside-out assortment planning with outside-in experts to exploit gaps in competitors’ assortments and maximise price and profitability
At least half of these retail trends involve omnichannel. In particular, just think about the implications of some of these predications:
- Retailers that were born online have a fundamentally different attitude to the way they plan and manage their business. They realise that new business ideas can be launched in the cloud or via the app store
- Within the next year, all retailers need to make significant improvements to their supply chain
- Laggards who drop behind on omnichannel strategy will be closing stores at TEN TIMES the speed of those who meet customer demand
Each of these ten IDC predictions should be a wake-up call for modern retailers. The customer relationship is more engaging today and requires far more planning than when there was simply a need to offer a post-purchase customer service channel.
Business as usual Is not possible In a world of Customer Experience change
A recent Deloitte study of 1,200 Chief Information Officers (CIOs) found that there are really just three different types of information leader within organisations today:
- The trusted operator, who focuses on supplying cost-effective reliable infrastructure
- The change instigator, who takes the lead on new business transformation and change initiatives
- The business co-creators, who spend their time driving business strategy and using technology to dramatically change and lead the business
I think this is fascinating and I’m sure you can think of technology and information leaders who fall into all three of these groups, however it was interesting to see that Deloitte advises all CIOs that they should flow between the three areas during their career. You can’t be a success just by sticking to what you know for an entire career.
I think that if we focused our attention solely on the kind of technologies that are supporting the customer experience then only the second two could survive right now. Providing the experience that customers expect has changed faster than possibly any other area of business in the past 6 or 7 years – there really is no idea of business as usual because each New Year brings new trends and technologies that need to be adopted.
Omnichannel has been one of the key technologies at the forefront of change, firstly because customers demanded that they could communicate across multiple channels. So multichannel support was offered and then by knitting together the way these channels function an omnichannel was created.
But now there is a situation where designing your customer interface to be consistent across online, in-store, and on any channel can create greater revenues. The improved customer experience does not just keep customers happy, it creates more cash for your business.
In 2016 I believe areas like Robotic Process Outsourcing will be extremely important, meaning that the leader responsible for the customer experience does need to be fully conversant with emerging technologies. At the recent Engage Customer conference in London the first keynote speaker appeared on stage with a robot – not just any robot, but one that could have a normal conversation and with the ability to read your facial expressions. The robot knows if you are happy or sad!
Businesses are being transformed by technology. Where they are refocusing around the customer experience it is going to require the change experts and co-creators – there is no business as usual in 2016.