RSR Research: ‘I Did Not See That Coming’ – Getting Nimble for the Next Big Thing
Through a special arrangement, what follows is an excerpt of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
On February 27, I had the opportunity to participate in an internet radio show on Voice America where the topic was, "Precision Retail: What’ve You Done for Your Customer Lately?"
While it’s true that the term "Precision Retail" can refer to an SAP product (the episode’s sponsor), the panelists agreed that it’s a bigger term than that. It’s about getting to customer relevancy, and moving away from the "creepy." It’s about creating a good customer experience that presents the products they want to buy in a method that’s appropriate for your trip/visit.
It was a freewheeling and fun discussion, but for me the punch line came at the end. Host Bonnie Graham mentioned how the "senior seniors" don’t really trust the internet. "There’s a fear level … how could I give somebody my information online?" And she said, "Of course, we are not that, but will that fear ever go away?" We all agreed it will, but I added a caveat, "I think there’ll be some new technology that we’ll find to mistrust."
Ms. Graham laughed, "I did not see that coming."
Well, that’s the whole point of this piece. This summer we’ll attend the "Wearable Technology Conference" in New York City. I’ll bet whole new groups of people will be mistrustful of wearable technologies. And how far are we from human implantable technologies? RFID is really just the tip of the iceberg there.
Already, smartphones border on "too small for big fingers." Wouldn’t it be easier to implant something in our ear or mouth? Need to type? Draw a keyboard. Need to take a phone call? Click your heels three times. It’ll happen. Count on it.
Each of these technologies will promise to make life a bit simpler and will also be monetizable by retailers, but the reader is likely starting to cringe at the thought of some of them. Still, they will come. And while it’s one thing for a consumer to say "I did not see that coming," it’s quite another for a retailer to say that.
It’s easy for me to opine on these things, but as retailers, what are we going to do about it? Oddly, it’s the best case ever for a sound and robust technology infrastructure; for building an extensible foundation that allows us to expand into any new technology that comes along. Our stock ledgers will always have to do the grunt work of adding and subtracting sales, receipts and returns. But the variations on the theme are almost endless.
And the best possible outcome would be to say, "I did not see that coming, but I can handle it."
Discussion Questions
Are there ways for retailers to prepare for the “next big thing,” whether implantable technologies or some other largely unknown? Are there ways to downplay the frequent build-up of fear and mistrust in the general population with the arrival of avant-garde innovation?
Retailers need to be constantly monitoring emerging technology and its potential for use in retail. It’s a tough job, but there are many resources to help. Things like Google Glass, RFID Tattoos, and Google Shoes are trending today, and could either become really useful or really creepy. Retailers that engage with these technologies early will have a leg up on the competition.
The next “big thing” will always be great service and a company’s ability to be nimble. If you’re able to understand your product to provide excellent service to your customers, any new widget can be plugged in and marketed. The retailers that get it right are the ones that pay attention to their customers and gain their trust as an independent partner detached from an item.
Technologies are evolving so fast that we have hardly digested the last before the next wave hits us. This has had some devastating impacts on major players, too. Remember when Microsoft was “king of the hill,” and Apple a receding bit player? Games that big will switch players with greater frequency as the technology shifts beneath our feet.
But, although humans are evolving, we still manage with 5+ senses, and our hearts and minds are becoming incrementally more scrutable. The point is, the human piece is considerably more constant than the technology piece. And the demonstrably false assumption that we understand ourselves, much less those around us, continues to impede our leveraging of the technology.
This is particularly relevant to new technologies at retail, mostly driven by those at the cutting edge of technology, not the cutting edge of understanding human behavior. This is particularly to the point because retailers’ supply chain orientation blinds them to how little they know about shoppers and shopping.
The result is that progress at the interface of shoppers and technology is proceeding in a major way by the mud-on-the-wall process of trial and error. It’s why the actual adoption by shoppers is minuscule in comparison to expectations. The very limited value of way-finding apps is one example of this.
I agree with Zel and Herb. We need to look to present the technology in context, narrative, and story. Answer, “what this means for you is…” or, “How this improves your life is…”, etc. The ability to be perceived as an advocate for the shopper, a helper of theirs focused on making their life (easier, better, efficient, effective, etc.), and reducing their uneasiness with the “new” is the role of the store.
If the store is merely a location where products are available to be purchased, then it has little compelling reason to survive in the current competitive marketplace. If it is not offering anything unique, it is destined to fail.
Best way to keep aware of what is going on in the outside world—where shoppers live their non-shopping lives—is to attend conferences, trade shows and conventions. Internal focus is certainly important in this business, but it can be tempered with a more balanced experience which includes outreach.
Retailers can rarely prepare for the next big thing. There are too many “next big things” on the horizon. Why chase every one of them? Retailers need to be open to new technology by monitoring what is going on in the marketplace. This can be done by encouraging employee input on what devices, software and technologies they and customers are using.
The public often fears the unknown. Retailers don’t have to do the same. Rather retailers should be open to new technology and learn how new devices and software can enhance customer experience.
To prepare, read science fiction. No kidding—most of the astonishing innovations of the past 30 years (including global computer networks and wall sized video screens) were predicted in novels from the golden age. Cyber-punk authors imagined much of the rest, including human-machine interfaces and virtual reality.
As for adoption of coming innovations—well, the present generation is used to rapid onset and rapid decline of new tech. Fast life-cycles are the new norm. We older folks may never have the visceral ability to cope with that the way digital natives can.
The first thing that came to mind was the old saying, the only thing you can count on is change. Change is consistent, so get used it. The “next big thing” shouldn’t be a surprise. So plan on it, even though you don’t know what it is yet.
As for fear and mistrust by the general population, that’s to be expected as well. I think of the very brave person who was the first to eat an oyster—or the first to give the PayPal website his/her financial information. Something new can be scary, until such time that there is a tipping point—when enough of the public accept what’s new and scary as current and ordinary.
You have to be aware of the new stuff, and adopt what you can to make your business more user friendly.
Technology is never a substitute for common sense, or giving great service, and a great product at a great price. If you lose those thoughts, than technology isn’t going to save you.
First off, retailers who have not addressed their infrastructure issues need to get a move on. They have learned through the latest emerging technologies how important infrastructure is to being nimble.
After that, they must keep a finger on the pulse of what’s happening and emerging with their customer. The merchants, of course, thrive or not based on staying ahead of fashion changes, etc., but the rest of the organization…not so much.
Enter the Chief Customer Officer! Someone facing the customer experience head on, looking at the future of the customer, and helping to have a single image of them. If you don’t have one yet, it’s time! IMHO
I like Shep’s comment.
I’d also emphasize the fact that the changes are not just about new bits of technology and don’t just come from existing competitors. I suspect Amazon may not have been on the risk assessments presented in some retailer boardrooms even a few years ago.
The other observation is that seeing change coming is one thing, being able to do something about it is another. I would like to see more companies thinking about how they can be the business that makes their current model obsolete.
Too much “change” in retail is incremental: it may be necessary but not sufficient!
What are the next big things we need to care about? The need for charging stations and bike racks? Those suggestions relate to adapting for patterns that seem to be coming our way in the same way that Interstate Highways led to suburban malls with larger parking lots.
But since this piece deals with innovations that yield fear and mistrust—check out this piece regarding Google Glass.
In a nut shell, the concern with Google Glass is that the wearer is anonymously recording what is in front of them. Imagine that this captured content can now be easily posted to Google +. Since the video and audio lives on Google servers, that means that at some point the content can be processed via speech to text software. The processed text can be indexed and tagged. Facial recognition capabilities can find your image in videos posted on Google. That is why early discussions are around banning the wearing of the device (think: what goes on in Vegas, is now indexed and searchable.)
Does this mean as an industry we need to think about making stores Glass-free? Could retailers work with Google to develop a geofencing option to enable the deactivating of Glass in your four wall?
Also looming is passive detection of your phone’s hardware address and the mining of cell tower information. A potential future therefore might be branding yourself as a place where everything is done to insure your anonymity.
As far as staying plugged in, there are legions of firms that will keep you aware of the Next Big Thing. They usually have long trails as things move from science to engineering. Places like Palo Alto’s Institute of the Future ponder and cover big developments.
It’s true that we have much to track—developments like the Internet of Things, new Display technologies, and 3D printing that seem to be looming over the horizon. I saw yesterday an example of a garment printed using a 3D printer. That means that we might be able to send trial versions of merchandise over the Internet. Things like that influence what is core to our business. It won’t happen overnight, but since retail is at the intersection of culture, people and technology, this piece is well timed.
One of the next big things to watch for is a rapidly accelerating acceptance of the newest technologies, thanks to an influx of Millennials into the workforce. I recently saw a meme featuring a baby talking on a cellphone, muttering “no, Grandma, first you have to press the Internet Explorer icon.” Watch for big changes when these people are your boss.
Agree with Messrs. Raftery and Tenser—only comment on Dan would be to attend some conferences outside of your industry if possible (high-tech, gaming, etc), or at least in adjacent spaces—mainstream visit specialty food, retail—visit foodservice.
Also, check out advances in 3D printing; if this gets the legs that some predictors point to, there will be entire retail channels eliminated. Imagine licensing clothing technology from Levi’s and just “printing” them at home!
It is kind of geeky, but just tune into a few episodes of the SyFy Channel’s Canadian import, “Continuum.” Wearable technology, sensors everywhere, etc.