A Peek Into The Future Of Retail
Murphy Research had the pleasure of co-sponsoring and chairing the 2018 Shopper Insights and Retail Activation Conference in Chicago, June 13-15, 2018. Over 200 speakers and attendees from some of the nation's top brands convened for three days to talk about what the future holds for all things shopping. Here are a few of the key insights, trends, and predictions that came out of the conference:
Shoppers Gonna Shop
From forecasting the outright death of retail as we know it to anticipating the "Singularity" (where physical and digital retail worlds merge completely), the future of retail has been heavily debated among experts for several years now. What most speakers and attendees at the Shopper Insights conference ultimately agreed upon is that, despite rapid change, the fundamentals of retail remain the same as ever: consumers continue to look for a balance between value and convenience, while embracing unique and positive experiences - prompting them to explore new channels as they emerge.
A case in point is the role of brick and mortar. While Toys R Us, Sears, Macy's, and many others are closing the doors on their brick-and-mortar operations, traditionally online retailers like Amazon and Warby Parker are making a play for physical space. This indicates consumers are not (yet) completely ready to turn their purchase decisions over to algorithms and bots, and they are actually seeking out a physical retail experience when it meets their needs.
Brick-and-mortar still has a key role in the customer journey, but that role is often one of validating online research. To kick off the conference, we had the pleasure of interviewing Neil Blumenthal, Co-Founder and Co-CEO of Warby Parker. He discussed how his company expanded beyond online-only by opening a network of hip retail spaces in key markets and focusing on a smaller footprint and a discovery-driven customer experience. Customer profiles are quickly pulled up by cheerful associates, and styles and SKUs saved online are quickly available to try on. The experience is tailored and effortless, providing a seamless and personalized touchpoint in the shopper journey.
No matter the outcome, experts agree that categories and retailers that are focused on discovery and personalization, while tailoring their touchpoints to drive convenience, will weather the storm and thrive.
Human vs. Machine
Since the invention of the assembly line, efficiency and automation has been a driving force in every industry and category. Likewise, automation is nothing new to the shopper experience. Today, self check-outs and AI-driven online chat support are standard parts of the shopper experience and are efforts by brands and retailers to bolster the bottom line.
However, many conference panelists in Chicago were preaching a "back to basics" approach, advocating to reinstate the human touch where automation previously prevailed. Discovery shopping app Tophatter uses human judgement to supplement AI recommendations when finalizing and promoting inventory for its micro auctions. Online retailer Boxed has human QA measures in place and infuses a human element by including a handwritten note in each of their shipments.
"Execution matters. We need to think about the entirety of the customer experience," Tophatter COO Andrew Blachman proclaimed during his keynote presentation on the second day of the conference.
This balance between doing what's best for the customer vs. increasing the bottom line was a hot topic of discussion, and most experts agree that automation should solve real customer problems and not just be used to reduce salary as a percent of revenue. Ultimately, it was said, profitability and customer engagement go hand-in-hand, so that four-wall margins should increase at the same rate as NPS.
Happiness = Reality - Expectations
On the first day of the conference, Warby Parker's Neil Blumenthal quantified happiness with this formula, arguing that as long as reality exceeds expectations, we can expect our customers, employees, and peers to thrive. In addition to giving back to the world through their practice of "buy one give one," Warby Parker celebrates employee milestones and accomplishments and fosters a corporate environment focused on entrepreneurialism and growth.
The need for happy employees was also a focus for Boxed CEO and founder Chieh Huang. He routinely dips into his own equity pool to create programs and funds for his staff to pay for their commutes to work, their children's educations, and even their weddings.
It was refreshing to see many industry leaders preaching a corporate mantra that put employee happiness and customer satisfaction ahead of the bottom line. We felt an optimistic sense that the rest of the industry will soon follow.
For additional insights into these topics and more, download the FREE e-book from Murphy Research: Top Shopping and Retail Trends of 2018.
Or check out our comprehensive Shopper Behavior Study, which profiles key shopper archetypes and dives into shopping attitudes and behaviors across those segments, as well as multiple demographic categories.