Smart retailers are already using this to their advantage.
Amazon announced its second headquarters a few weeks ago after a year of being courted by cities across the nation, likely expecting thanks and gratitude from the chosen two cities. Much to their surprise, the response was the opposite; a backlash from the Long Island City community and many New Yorkers frustrated with increasing costs of living, high taxes and what 25,000 young tech workers will do to their community while giving away billions in subsidies to one of the wealthiest companies in the world. Tech stocks have been pummeled in the last couple of weeks amidst concerns of declining usage and looming anti-trust actions over their dominance. The holiday shopping season has kicked off with a resurgence of traditional retail. As the world is waking up to the data gold mine big tech has used to become the richest companies in the world, a backlash is forming as government leaders and individuals realize their privacy was sold off in the process and may never be recovered.
Retail has been an easy target for big tech companies because companies like Amazon, Facebook and Google could leverage the vast amounts of data they collect to become their own market research firms knowing what, when, where and how people make purchasing decisions, what they click on, watch and read to continually drive success in their offerings. Amazon added a powerhouse logistics operation to become a threat across the retail, grocery and entertainment sectors, now with health care in sight. While some retailers were slow to realize what was happening, almost all have now recognized they, too, must be technology companies. The surviving retail institutions have retooled and repositioned themselves. They have realized they need to compete online while also delivering a unique and special experience in the store to leverage data and new technologies in a more meaningful and forward-thinking manner. Meanwhile, most of big tech still has only one offering – online. Amazon acquired Whole Foods recognizing this weakness, but face their own challenges as they begin to tackle the brick and mortar side of business. In the big tech backlash, many are cutting more than just the cable cord as they seek digital freedom. The savvy retailers are recognizing this backlash which could turn out to be a turning point for them in the war against Amazon, Google and Facebook.
As the boxes from Amazon and other retailers pile up by the recycling bin and the customer service issues increase along with counterfeit products, the brick and mortar retail experience may no longer be such a burden to consumers.
Recently, I asked my husband to go to our shopping mall to look at some furniture and then grab dinner. As we meandered from Arhaus to Restoration Hardware on our quest, we sampled food at Williams Sonoma and the popcorn stand (much like at Costco), tried out a Peloton bike, tried a new virtual reality headset at Microsoft and picked up some Apple accessories in the Apple store. We stopped in numerous stores just to look around and often delightfully purchased something unexpected. We remembered that going to the mall used to be something you did for fun as an activity versus just pointing, clicking and waiting two days. The mall was bustling with activity and people of all ages. In each of our stops retailers were savvy enough to gather information about us, offering discounts to provide our prized contact information. As malls and retail outlets have been redesigned and redeveloped by creating true experiences, the tech backlash may mean more people head to the store instead of buying online. Smart retailers already see the opportunity to challenge their big tech competitors by surpassing the consumer value bar. It’s an important reminder that digital disruption does not have to mean complete obsolescence, but merely an evolution to the next phase of retail. Clearly, consumers demand that online ordering be easy, convenient and that shipping be free. In person experiences need to be fully driven by the experience and the joy of actually looking at something in person, trying it on or sitting on it, tasting it, talking with an expert about it, and getting complimented by customer service experts who cater to our every need. We will look for destinations that allow us to be entertained with levels of enjoyment worthy of the inconvenience of battling traffic, parking lots or crowds.
And based upon the patents I follow by big-tech companies, a virtual or augmented reality will enter the mix of the retail experience so that the online experience can mimic what you might have in a store, only more personalized to you so that you can see how that outfit or new makeup looks on you, specifically, or how that chair will look in your living room before you buy it.
Savvy retailers and big tech recognize there is now a real world and digital world in which we all live and they must cater to both, delivering services as we weave in and out of the real world and digital world and all the while capturing data that allows them to continuously improve that life cycle.
As we are now fully into the holiday shopping season, it’s clear consumers are spending. Profits remain marginalized, often unrelated to technology. But technology could be the tool that helps increase profitability and turn the retail war in the other direction by offering things Facebook and Google simply don’t yet have: a true in-person experience. If you are in the boardroom of a retailer, consider a few key questions to ask as you navigate the future of retail and possible opportunities as the tech backlash grows in momentum:
How does your technology compare to your competitors? I use patent analytics to help identify how my companies compare to not only competitors but against big tech retail related technology developments. For example, really understanding how they could compete using virtual reality and what you need to do to compete.
How is your company leveraging data to create better in-person experiences by knowing more about your customer as soon as they enter the store? This could include facial recognition, cross device tracking, as well as methods to gather data about customer behavior. How do you entice customers to give you consent to provide this to you. This s what big tech did by giving it all away for free.
How do you continue the experience once they leave and will engage with you online? Can you extend the purchasing opportunity with special offers or add-ons that might not have been available in the store?
·As we continue to see cyber-breaches, how do you create a culture of security amidst the need to move fast?
Who cross checks your culture to ensure you are delivering on your promises to customers?
Don’t ever lose sight of the cyber security threat that accompanies new technologies. For every new strategy you implement, new vulnerabilities are created. How is your cyber team integrated with digital development?
Is your open source code being patched? This is an easy and quick way to know if you are exposed. Equifax’s breach was a failure to patch open source code.
In the boardroom, the most important function you perform is to come prepared to ask tough questions and hold management accountable while setting a tone and culture at the top that understands the future of digital and cyber security. The future of retail will depend upon a blend of real life experiences in the brick and mortar locations and a savvy digital experience that transcends old expectations.
If you’re interested in how your c-suite and board can better identify digital and cyber security trends or in a digital retreat, reach Jen at firstname.lastname@example.org.