Retail Being Reborn: A Detailed Discussion on the Retail Rebirth
Hi, everyone. Welcome to this week’s Feliciano live. We’re here with Dr. Manveer Mann. She’s an assistant professor in the Department of Marketing here at the Feliciano School of Business. Our topic today is Retail Being Reborn. We’re going to go through some questions, but as we progress through this interview, if you have any questions, feel free to ask. So our first question, Dr. Mann is how will the chore shopping shift?
The chore shopping is shifting as we know of it today is that retailers are really working on making it more convenient so that it is much more easier. It doesn’t take time and effort for us to do, for example, with delivery at your doorstep and also in some cases there’s, auto-replenishment based on how low you’re on a product. So really the push is towards making it even more convenient and also automatic.
So for those who just joined us, we’re here with Dr. Mann. She’s an assistant professor here in the Marketing Department of Feliciano School of Business. We’re talking about Retail Being Reborn. If you have any questions, feel free to ask them and well get to as many as we can. Our second question is will companies stop making standard products and shift to a customizable product approach?
Well, I don’t think that standard products will go away, but there is a trend of made-to-order products. And retailers are becoming sort of more open to using technology such as 3D printing modular design to give customized products. For example, a recent Deloitte report showed that customers are happy to pay for customized products and also happy to share data so that they can get more personalized products. Really, the idea is to provide unique experience and unique products. And there are a number of great examples in this, for example, there is an Australian retailer dress them that makes the glassware, which is made from sort of plastic that comes to the beaches and you go into the store and you order the kind of glasses you want, and while you’re there, they’ll assemble it for you and you get affordable, sustainable glasses. Another really great example is actually off a pop-up store that Adidas had earlier this year in Berlin, that you could go to this pop-up store. You could design a sweater that you like. There was a body scanner that would measure you. And then within four hours you have a sweater that’s ready and you can take home that it’s just unique made for you. So going forward, we will see more and more of those examples, but still standard products will not go away because chore shopping or convenience is still very important for our customers. But experience can definitely be delivered from customizable products and also processes.
So for those who just joined us, we’re here with Dr. Mann. She’s a Department and a Marketing assistant professor. We’re talking about Retail Being Reborn. If you have any questions, feel free to ask them. We’ll get to as many as we can. Our next question is can we expect the rise in robots that will significantly reduce the human interaction during our shopping experiences?
Yes, we are definitely seeing a trend of more and more robots in the retail settings, both online and offline. For example, chatbots have been around for a while and the adoption rates for chatbots has increased throughout the retail industry. And in addition to that in offline, and also sometimes in supply chain settings, we see more retailers using robots. For example, Amazon has about 45,000 robots in its warehouses. So that’s a significant number. And when we talk about Human-robot interaction, we will see more of that. For example, Target tested a robot Tally that does inventory in its stores, Marriott in California has a robot Wally, which does room service. You can basically ask while you to bring a bottle of water. There’s a phone call option there. So we see a lot of robots coming into the stores and also sometimes out of the stores, for example, Domino’s has this technology robot DRU, where it is testing driverless cars and drones to deliver pizza to the customers. So all across the retail operations, we will see greater adoption of robots.
So the next question is aside from tracking sales, what additional information can big data provide retailers?
Well, big data is very useful for retailers in many different forums, including personalization, predictive analytics, improving conversion, supply chain management. It can really be leveraged in both online and offline settings. For example, Walmart is using facial recognition to see how customers are feeling in the store, whether they’re happy or frustrated. And if they’re frustrated the sales reps get a cue to open up more checkout counters. And also in other forums, for example, the Amazon Go stores, cashierless stores also rely on technology and data to deliver better customer experiences. So really we will see more and more data usage to enhance customer service, to make operations much more efficient and productive. It is a key part of retail going forward.
How will augmented reality play a role in retail?
Augmented reality is another thing that is being explored by retailers. For example, at this years NRF Innovation Lab, there were quite a few technology companies that came up with really interesting AI capabilities that can be used in retail. For example, the Satisfi Labs is a conversational AI platform that is basically caters to creating chatbots a message experts that can answer customer questions at any point in time. And also some other very interesting technologies such as there was one vendor at this years innovation lab called provision, which creates these holographic 3D objects. So you could basically see a whole diagram of a Coke bottle that is in 3D and it’s floating. You don’t need any glasses to see it. So going forward, we will see that retailers are using AI technology in online and offline settings to really kind get the interest of the customer and engage and hopefully drive them to convert into a paying customer.
Okay. We actually have a live question, will brick-and-mortar stores go away? What will happen to them?
No brick-and-mortar stores will not go away. As far as the numbers say, we have not seen a decline. In fact, for every store that accompany closes 2.5 companies open a store. But brick-and-mortar stores will have to very clearly understand what their value propositions are either. It has to be very convenient shopping, or it has to be very unique experiences. Shoppers will continue to go to physical stores, not necessarily to buy products, but to experience shopping and experience products and lifestyles. So there is still going to be a very strong presence of brick-and-mortar in our shopping experiences.
Great. Our next question is can we expect the overall retail experience and become more powerful?
Yes, definitely. We can expect that based on the discussion that we had earlier, we are seeing this very big, strong movement of experience, how that is really shaping up our shopping behavior. So we will see that shopping experiences will become much more powerful, much more personalized and much more impactful as we move forward.
The next question is, can you provide examples of a business that is currently redeveloping their retail strategy?
Yes, there are quite a few examples. But for example, Nordstrom is a retailer that has been doing something that is pretty interesting with its retail formats. That also speaks about a general trend in retail. It is investing in its brick-and-mortar stores, but instead of opening the big almost 140,000 square feet stores, it’s opening smaller stores where the idea is really to provide customers with experiences in these stores, which it calls Nordstrom Local. It currently has three of them in California. They don’t sell any products. Instead, those stores are entirely to give customer experience in the form of there’s a nail salon there, you could get your dry cleaning done there. There’s wine and beer and coffee. And you could pick up items that you had ordered online, or you could get one of a personal stylist to order stuff for you while you’re there getting your nails done or getting a haircut. So we will see again, that more and more retailers will try to explore these options where they are really trying to provide unique and very impactful customer experiences and develop connections with their customers.
How effective our limited time pop-up stores
Well, limited time pop-up stores have also become a very popular in the retail industry lately. And we are seeing all sorts of retailers testing pop-up stores. For example, luxury retailer like RMS recently had a pop-up, which went through DC. It went to a couple other places like Nashville, places that it doesn’t have physical stores. And the whole concept behind that pop-up it was a laundromat looking store and you could bring in your older mess scarves, and you could dip tie them and sort of breathe new life into them. And you could pick them up at the end, after a couple of hours. So really the idea is to engage customers and sort of increase brand awareness.
So pop-up stores are being used to create customer engagement, create sort of more buzz about your brand. Another example is Nike, they had this pop-up stores in LA, Chicago, Toronto, where they were celebrating their fourth anniversary of Nike Air Max. And they were microsites that you could find about pop-up stores, they did not advertise. And then you had to go on some Twitter accounts to find the location of the stores. And if you were able to find a location or the store, you can go to the store and then there would be live performances. There would be art installations, and really it is about creating that connection and that relationship with the customer.
Great. Well, thank you, Dr. Mann for joining us and for all of you to join us on today’s session, we will see you at the next Feliciano live until then have a good day. Thank you.
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