Retailers to Explore Analytics Topics at NRF


Like so many long-running vertical industries, retail experienced a big disruption, first from the internet and the rise of ecommerce and digital-first competitors entering the market, and then from the rise of consumers carrying mobile phones -- their own little comparison shopping tools that fit right in a purse or pocket.

Next week, both the digital-native retail companies and long-standing brands with deep roots in brick-and-mortar stores will converge on New York City for the 106th BIG show -- NRF's Annual Convention and Expo. And analytics will be at top of mind for many of the 3,300 retail companies attending the show.

And while some companies will likely be interested in checking out new developments in machine learning, virtual reality, and other leading edge technology being applied to the retail vertical, others are likely to still be getting their arms around the challenges of understanding consumer behavior in an omni-channel environment -- physical store, web store, mobile, and maybe other channels, too.

How can retailers track consumers across all these channels in order to really better understand consumer behavior? How can they apply advanced analytics to this behavioral data? How can they leverage all this to improve sales, customer service, and the customer experience?

Those are the questions that will be at top of mind during the Retail's Big Show, as it is called, next week. And they aren't questions that retailers can put off until the next big rush is over, according to Brian Kilcourse, managing partner at RSR Research, a technology consultancy for the retail vertical and a former technology executive at retail organizations.

That's because consumers are already enjoying the conveniences enabled by advanced analytics and even AI at other competitive organizations.

"If chatbots become commonplace, and they make reliable recommendations to consumers, then consumers will assume that chatbots will be available everywhere" Kilcourse said. That puts pressure on laggard industry players that haven't put the investments in their technology. And these are more likely to be those retailers with deep roots in brick-and-mortar stores -- companies that are still investing in integrating all their siloed data. They haven't gotten past last generation's challenges yet.

(Image: Rawpixel.com/Shutterstock)

(Image: Rawpixel.com/Shutterstock)

"A classic example of this kind of consumer demand is mobile phones," Kilcourse said. "It started with the launch of the iPhone, and then Android in 2009, and we went from low penetration to everyone needing to have one yesterday. The same will be true of AI. Retailers still have not recognized that the pace of adoption is not determined by their boards of directors. It's determined by their customers."

Kilcourse expects a big push for AI in retail in the years ahead.

"It could be exciting. And it could be frightening for retailers," he said. It represents the next generation, and in many cases they are still struggling with the last generation."

Jessica Davis, Senior Editor, Enterprise Apps, Informationweek

Jessica Davis has spent a career covering the intersection of business and technology at titles including IDG's Infoworld, Ziff Davis Enterprise's eWeek and Channel Insider, and Penton Technology's MSPmentor. She's passionate about the practical use of business intelligence, predictive analytics, and big data for smarter business and a better world. In her spare time she enjoys playing Minecraft and other video games with her sons. She's also a student and performer of improvisational comedy. Follow her on Twitter: @jessicadavis.

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Re: Chatbots
  • 1/24/2017 9:12:49 AM
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The choices given or even being foisted on retailer now seems overwhelming. It should be interesting to see how quickly new tech is embraced by the large guys and how the smaller retailers cope to surive alongside them. "It could be exciting. And it could be frightening for retailers," are probably the watchwords for the coming days.

Re: Chatbots
  • 1/20/2017 2:38:12 PM
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Thanks for your reply, Jim... I mostly agree with your comments. But especially since brick-n-mortar retailers have taken such a hit from the Web (and continue to do so), their approach needs a drastic overhaul.

One mall management company here in LA, Westfield, is taking the interesting tack of spending $800M on its Century City property. The centerpiece is a new food court that will include Mario Batali's famous Eataly franchise.

This isn't exactly the approach I was advocating, but it does show they're trying to offer shoppers something they can't get on the Web (bolognese so authentic you'll weep).

Re: Chatbots
  • 1/20/2017 12:30:27 PM
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@Terry. I agree that consumers will select retailers by price, but only to an extent when it comes to the average consumer. Rather than going for the lowest price, I think they tend to shop for a low price (lower than what they see somewhere else) offered by a retailer that they are familiar with or is convenient to them.

It might be different for those people who have always shopped strictly by price (going back generations, not just in  the digital world), and price becomes a bigger factor as we move up to big ticket items. However, the low-priced retailer who turned you off five years ago because of poor service, obnoxious sales rep, or poor quality isn't going to get you back simply with the lowest price.

Another consideration when it comes to brick and mortar stores is the impulse buy. How many of us compare price on those things that we see when we are walking through the store and think, "Hey, that's cool"?

Yes, price is important, but plenty of "human" emotions and considerations come into play too. The irony is that a smart retailer can use technology to make the most of those emotions, using smart signage, beacons, etc.

Re: Chatbots
  • 1/20/2017 10:12:51 AM
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Retail is a cutthroat business where retailers and consumers both are hyper-focused on price. Valiant, old-school retailers attempt to distinguish themselves on superior service (Nordstrom, and uhh, Nordstrom) but most consumers go where they can get it most cheaply (usually online).

What if some leading edge retailer instead focused on creating more of "a retail experience"? It seems to be what Maryam is suggesting in changing the look of stores (start with sledgehammering fluorescent lights!), but also the technology that accompanies a shopper.

The problem, of course, is this sort of experience won't be cheap. It's not going to have the ubiquity of a Rite Aid or Radio Shack. But brick-n-mortar retail is long overdue for a major reboot... if only they big players will take a crowbar to their wallets and make it happen.

Re: Chatbots
  • 1/20/2017 9:52:41 AM
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@Maryam. One mistake that we all make in evaluating the progress of tech adoption in any industry is that we focus on what the organization should adopt and use successfully. When it doesn't go smoothly we blame either the tech team or the execs, all of whom we believe should "know better." However, retail is a perfect example of where the real challenge is in implementing technology at the ground level, in the stores. One big factor in tech resistance of course is the front-line sales force.

They have worked in stores or overseeing stores for 30 years, and they have been successful. (Their string of commissions prove that). They will bend a little, accepting online coupons and loyalty cards, for example, but their approach to displaying product, approaching customers, checkout, etc., has work for decades, and they aren't eager to change. We can say that they should change, but it isn't our checkbook they are putting at risk if change doesn't work. The organization has to make change less risky for them individually.

Another area of resistance is in the customer base. Even today's digital natives who are comfortable online sometimes want to walk into a store and get a familiar experience. The less tech savvy people are even more likely to want some of that traditional feel. How much tradition do we drop and how quickly? No easy answers, and certainly no answers that serve every type of retailer and every type of consumer.

 

Re: Must change
  • 1/19/2017 2:57:18 PM
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PC, I have to agree with you on that point. The traditional is a known reality, while the improved process becomes comfortable after proving itself, some times over and over again. Over time, the avalanche overwhelmes all resistance.

Re: Chatbots
  • 1/19/2017 12:14:18 PM
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While it could create opportunities I think retailers have to crawl before they run. Simplistic things like texted coupons/ offers to their consumers, simplified returns, and in-store, tablets would make the experience an improvement by leaps and bounds. The decline in retail is due to the fact that almost every store looks the same way it did 10 years ago. The dressing rooms are the same, the experience is the same, and consumers expectations and behaviors have changed. Retailers need to get their stores in line with consumer shopping expectations.

Chatbots
  • 1/18/2017 10:35:22 AM
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Chatbots would allow retailers to have a sales person in every users home.  It might be good for retailers that have a more complicated product or that needs to be more individualized.  

Re: Must change
  • 1/17/2017 5:07:29 PM
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@tomsg -

Sounds like we're discussing two types of issues.

In the first case, the manager is well-calibrated and the data analysis less so. The manager rightly chooses to stay with what works. In the second case, the manager still thinks he knows, but clearly he is choosing against good evidence and to the detriment of the business.

As data analytics improves with time, the first case is becoming less common and the second case more so.

Re: Must change
  • 1/17/2017 4:10:51 PM
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I see more of the following: a display is shown to be generating traffic and buying of the item on the display goes up when the display is put out. When it is suggested to the manager that this type of display works, he will say" But I don't really like like it- Let's try something else". This is not acting on the data.

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