Customer Experience Trends for the Future of Retail

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Technology in retail has reached an all time high and is continuing to grow in 2017. The Internet of Things (IoT), Virtual Reality (VR), and Augmented Reality (AR) have all began to make their breakthrough into retail technology. It’s needless to say that this technology is changing the customer experience.

IoT in Retail

The Internet of Things simply defined is the “internet working of physical devices, vehicles (also referred to as ‘connected devices’ and ‘smart devices’), buildings, and other items – embedded with electronics, software, sensors, actuators, and network connectivity that enable these object to collect and exchange data.”

IoT is everywhere! If you own a smart phone, then you are using IoT on a daily basis. With the new trend of mobile wallets and near field communication (NFC) payments, retailers are beginning to use IoT in their stores to enhance the customer experience. With wearable technology and NFC payments, retailers can provide more payment options for the customer and a smoother transaction process by allowing the customer to pay via smartphone or wearable device such as an Apple Watch.

Moving toward an age of paperless transactions, it’s crucial for retailers to accept mobile payments and offer digital interaction with their shoppers via IoT. Virtual and digital communication and transactions are something that shoppers are going to be looking for in 2017, and it will have a huge impact on the overall customer experience.

VR and AR in Retail

2016 has proved to us that virtual reality and augmented reality will change the way people shop and in turn, transform the customer experience in retail. Shoppers will no longer need to physically travel to a store to experience the way something looks and feels. While VR and AR are definitely related, the two are used very differently in retail technology.

If you are active on Facebook or another social media platform, you may have notices that many people have received a pair of virtual reality goggles during the holiday season (seriously… a lot of people). Overall, these goggles are used to play video games or experience virtual realities like riding a virtual roller coaster or exploring a virtual jungle. In terms of retail technology, virtual reality could possibly be the new way people do their shopping.

How will this change the customer experience? How will this change omnichannel retail?

Think about when you are shopping online, but hesitant to make the purchase because you’re not sure if the pants you are purchasing will fit you, or because you don’t know if the lamp you’re looking at will go well in the living room. With the rise of VR, ecommerce retailers will be able to create a virtual store and connect the shopper with the physical product, without the shopping ever needing to leave their home. Sounds crazy, right?

Now let’s talk about AR. In 2016, Pokémon Go! took the world by storm by introducing one of the first successful augmented reality games for smartphones. We quickly learned how the game could affect retailers, and retailers quickly learned how to take advantage of the game by offering discounts and special promotions to their customers who were playing.

As technology continues to advance and VR and AR becomes ‘the norm’, shoppers will expect a more technologically advanced customer experience. We can already see this trend with the growing adoption of online retailers and mobile payments. Now the question is: what can SMB retailers do to keep up with this advance in technology? How can they continue to keep the customer satisfied?

SMB Retail Technology

While the rise in retail technology will have a huge impact on the overall customer experience, there are ways SMB retailers will be able to better the customer experience for their shoppers in 2017 that won’t require a virtual reality store.

One very simple way SMB retailers can use technology already available to them to ehance the customer experience, is to create an omnichannel shopping experience for their customers. Engaging customers beyond the transaction is key when creating the ultimate shopping experience. This can be done through the retailer’s website, mobile app, etc. According to nChannel, two-thirds of shoppers will check prices on their phone before making a purchase in a brick and mortar retail store. For this reason, SMB retailers need to make sure that they are engaging customers both in-store and online in order to keep their shoppers satisfied.

Enhancing the Customer Experience

In this age of new technology, omnichannel retail, and being able to basically purchase anything you need online or on your smartphone at your convenience, there is an increased pressure being put on SMB retailers to keep their customers satisfied in-store. The important thing to note is that shopping is no longer just about making the purchase, but it is about the entire shopping experience, whether that is a virtual reality store, or superior customer service.

In order for SMB retailers to keep their customers satisfied, they must first understand their audience and their needs. If a retailer’s target audience is a middle or older-aged crowd, creating an app for a virtual store may not be appealing. For this same audience, increasing customer service reps in store or sending mailing coupons might be more efficient. With every audience comes a new strategy for providing the best customer experience.

 

Star Spotlight with Vend

Vend with Star

What does Vend do?

Vend is America’s leading retail POS software, inventory management, ecommerce & customer loyalty platform for iPad®, Mac, and PC. Vend has customers in over 150 countries and prides itself on providing seamless point of sale solutions for retail, food and beverage, coffee shops, and more. Vend’s ecommerce and sales operations features make it easy for retailers to provide the perfect shopping experience for any customer whether in-store or online.

How is Vend working with Star Micronics?

Vend works with Star Micronics’ printer peripherals to bundle a sleek, yet reliable point of sale solution for any retailer. With certified support for Star’s TSP100 and TSP650IIBTi desktop printers, SM-S220i portable printer, and all-in-one mPOP™ peripheral, Vend offers solutions for large or small retail environments. Vend has also recently added support for Star Cloud Services’ free digital receipt solution and customer engagement tools. Star Cloud Services, along with Star’s AllReceipts™ digital receipt app, allows retailers to offer their shoppers the option to claim a digital copy of their receipt and gives them the ability to later engage with their customers through the app.

How is Vend working with the new Micro Receipt?

Star Cloud Services recently released a new feature called the Micro Receipt. The Micro Receipt allows retailers to print only the AllReceipts QR code on the paper receipt, saving up to 80% on paper compared to the original. While only the QR code and optional store name and time stamp will appear on the paper receipt, once scanned within the AllReceipts app, the customer will have gained access to the full, itemized receipt in the app. Vend is the first to integrate the new Micro Receipt, allowing their retailers to get a longer lifecycle out of every Star Micronics printer.

“We think there is great potential to introduce this new solution, specifically the Micro Receipt, to our customers,” says PE Perruchot de la Bussiere, General Manager of Channel and Business Development for Vend. “With this innovative solution, we will be able to work with resellers and find new customers together.”

The Rise of Experiential, Discount, and Specialty Retail

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In 2016, we have seen major shifts in the retail industry and consumer buying patterns. We’ve seen the largest Internet-based retailer in the world (Amazon) open brick-and-mortar stores, and we have seen “big-box” retailers closing stores. Clark has named just a few:

  • Macy’s plans to close about 15% of its locations amid challenging retail environment.
  • According to the Dallas Morning News, JCPenny CEO Marvin Ellison said the department store chain plans to close some of its roughly 1,000 stores soon.
  • CVS, America’s leading retail pharmacy, plans to close 70 stores early this year.
  • Mall-based retailer, The Limited, closed all of its nearly 250 stores across the country on January 8, but will continue to have an online presence.

Shift in Consumer Buying Patterns

With the closing of many department stores and “big-box” retail stores, we see that discount retailers such as T.J. Maxx, Marshalls, and Ross are thriving. Consumers are now realizing that many of the products or goods that they typically shop for in department stores can be found for a cheaper price either online or in discount stores. This shift is being largely influenced by the millennial generation. For retailers who do not fall into the “discount retailer” category, the key to competing is improved store data. This means creating a way to better track customer data in order to provide unique and authentic shopping experiences for each customer.

The Millennial Consumerscan_shop_featured

According to Forbes, there are eighty million millennials in America alone, and they represent about a fourth of the entire population, with $200 billion in annual buying power. This means that the buying patterns of millennials are having a direct impact on the retail industry and brick and mortar stores.

While millennials are commonly targeted as the “self-entitled” and “lazy” generation, it has been found that they are extremely price sensitive. Meaning, millennials will take the time to search for more affordable options (usually online or by using their smartphone) before making a purchase. Based on a survey performed by Accenture, 41% of respondents said they have practiced “showrooming” – the act of examining merchandise at a nearby retail store and then shopping for it online to find the lowest price.

It’s no question that the millennial generation is very unique. Retailers have struggled to understand the buying patterns and the interests of this generation for quite some time now. Unlike the Baby Boomer or Gen X generations, millennials tend to be less influenced by advertising and promotional content, and care more about the authenticity of a brand. Millennials best connect with people over logos. The fact that millennials are less likely to go for the “brand name” over a cheaper option, is largely impacting the way retailers must market themselves and their brand. The recent closing of Macy’s and JCPenny stores speaks volumes when compared to the popularity these stores held with previous generations.

Specialty Retail Steps Up

Specialty retailers are businesses that focus on specific product categories. It isn’t the product they sell that determines if a company is a specialty store, but rather the breadth of their product offering.

As we see more and more large retail stores closing, we see specialty retail continue to thrive. Brick and mortar retail is becoming less about shopping and more about the customer experience. With the rise of retail technology such as IoT, virtual reality and augmented reality in retail, consumers are entering brick and mortar stores with the expectation that they will walk away with more than just their purchase, but with a valuable and unique shopping experience.

With the generation that values experiences over items now holding such high buying power, retailers have to make an adjustment to their previous selling strategy. Retailers are beginning to take advantage of IoT and artificial intelligence to create a more personalized shopping experience. Specialty retail is thriving because it has been much easier for SMB and specialty retailers to create these personalized experiences, because they are more likely to have repeat customers, making it possible to establish a certain level of customer loyalty. “Big-box” retail stores have a more difficult time creating a unique customer experience, simply because their audience is too large, and too diverse to maintain a valuable relationship with the customer.

For retailers to survive in this age of discount and digital shopping, it is essential that retailers do not just sell goods, but that they sell an experience.