For the eighth year in a row, I attended this year’s NRF Big Show in New York City in mid-January. As usual, it was an insanely hectic, jam-packed event full of non-stop activity (see my LinkedIn post for a glimpse into the action). Now it’s time to review what most caught my attention at NRF coupled with my bold (and not so bold) predictions for in-store networks in 2019.
If I summed up NRF and predictions for 2019 in one line it would be:
"2019 is the year fantasy meets reality for retailers."
The days of chasing shiny object technologies is over. No, it doesn't mean retailers will stop innovating and stop looking for new technology. Technology must now transparently elevate, while simplifying, the shopping experience overall.
#1 - The basics of retail are back - with a twist, the proper marriage of retail and tech
Technology in the store has to be transparent to the experience. Technology for the sake of technology just doesn’t work. The best example of this used to be an Apple store, but the mantle has now been passed to Nike and their House of Innovation.
Nike successfully blends the basics of retail with visual design, energy, music, skilled associates, er, athletes as they’re called, and most of all the merchandise looks amazing. Most significantly, technology is everywhere in the store, yet never interferes with the shopping experience, only enabling and enhancing it:
- You can use the Nike app to call an associate to bring you the shoe you like in your size
- Use the Nike app to scan a bar code on a mannequin and immediately see the product info for all items shown
- Each floor in the store serves a different purpose for both merchandise and shopping function
- Scan and go checkout is available everywhere
- You can have a fully human interactive and guided experience or a completely app-based non-human experience and everything in between, satisfying almost everyone.
The stars at the Nike store are not the technology but the experiences they enable and the merchandise they serve to highlight. This is retail as it should be, but it is only possible with the right network systems and infrastructure.
#2 - What's old is new again in retail tech
POS modernization is a real trend, evolving into full-fledged order management systems from any device in the store an associate can touch, fixed or mobile. It’s surprising how many retailers are clinging to antiquated POS systems. A wave of upgrades is upon us. But this will require more than just a new terminal or mobile device and some software. Complete order management and unified commerce will require new systems and infrastructure to properly deliver the experience customers want.
Infrastructure upgrades may be the most critical element of anything retailers bring into their stores this year. This will be where battles for in-store customer experience are won or lost! From in-store Wi-Fi to the wide area network (WAN) that moves data in and out of the store – it’s critical for managing the massive influx of new applications in the store accessing data at your data center or in the cloud. No, gigabit Wi-Fi won’t solve this! Ultimately, every app must access data outside the store and the fastest Wi-Fi still has to contend with multiple wireless users and limited WAN bandwidth. The only solution is to deploy an application aware software defined network that acts as a traffic cop ensuring every app gets the access it needs, and every user gets the performance they demand. Customers won’t wait 5 seconds for an associate’s tablet to refresh – that will be a lost sale! For more info on this, check out this white paper by IHL Group on the hidden key to a transformative in-store experience.
#3 - Practical applications of AI, AR and VR
AI was everywhere at NRF. No one could have been prepared for this. The practical applications are now reaching all aspects of retail, although there still seems to be more proven ROI areas like supply chain, assortment management, and pricing optimization then there may be in-store applications. However, solutions like FindMine that help curate merchandise sets for similar, complimentary products, especially in apparel, are proving themselves worthy with the uplift in sales they generate both online and in-store. AI will be a break out star in 2019 for retailers.
AR is also proving itself with many solutions around NRF geared to both customers shopping in-store as well as associates helping shoppers via their own devices. AR works best for product types where you need to apply the product to something else, i.e. beauty products and apparel. For example, Sephora’s app integration of Modiface, which allows a user to virtually apply make-up and works quite well. AR will help power more personalized experiences and shoppers appear to appreciate these solutions the more they engage with them. Again, it’s category dependent, for example the ability to “see” furniture in one’s home or shoes on one’s feet through apps including IKEA and Converse, respectively. Expect to see much more of this in 2019.
VR on the other hand…Furniture seems to be where this proves out. Macy’s is deploying their VR applications to many of their furniture galleries and they’ve measured real-world uplift in sales where a customer planning to buy one piece, ends up buying a room full of furniture based on the quality of the experience. So far, this seems to be the only workable in-store application. Where VR holds promise is in training associates and Walmart is heavily invested in this. Otherwise, not expecting much from VR in 2019.
#4 – Personalization
This is the new digital expectation customers have everywhere they shop. It's become almost cliché to say that consumers want to shop anytime they want, wherever they are, however they want, through whatever channel they want. But it's true. And based on what we heard and saw at NRF this year, it's quickly becoming table stakes. Retailers have to get this right in 2019. Read more of my thoughts on this topic and what retail CIOs need to do in my blog on Retail Customer Experience.com.
We have fresh examples of personalization at Joann stores new concept store focusing on crafting in the store. It’s an extreme expression of personalization by letting you create in the store using items you can buy. Certainly, a far cry from the traditional, almost warehouse style format of most national craft stores.
AI will make its presence felt heavily in this space. Many vendors were showing AI-based solutions to enable and improve the quality of personalization. While we all point to Amazon's recommendation engine as being such a masterpiece, how many of us have shaken our heads at some of the items Amazon "recommends" for us? It often makes you wonder if you could trust Alexa with your shopping choices, doesn't it? A personal experience is what customers crave and they will reward retailers with loyalty if delivered properly. As I paraphrase one of my favorite retail marketers (nod to @Kim Lewis), “retailers spent decades trying to homogenize the shopping experience so every store would be the same, but now we've come full circle and need to return to personalized behaviors for demographics of one!" It's what customers want.
The Final Word
What all of these trends and predictions have in common is the need to get the underlying network infrastructure right. Without the backend processes and tools to properly deliver the experience customers want, in-store advancements are just fantasy. Application performance, however, remains a key challenge for retailers. 60% of retailers tell us application performance is their top business challenge.
Discover how an Ipanema SD-WAN can profitably support your POS, inventory management, guest Wi-Fi and business-critical applications, to help you achieve your customer experience goals while saving millions in network upgrade costs.
For more information on how Infovista serves the retail industry and optimizes your in-store customer experience, visit our retail resource page.