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Retail Trends: Giant Steps

Smart retailers understand that the shifting retail landscape requires a leap into data collection, personalization and simplicity without losing that oh-so-important human touch

giant foot taking a stepThe retail landscape continues to shift underfoot.

Consumer shopping habits and expectations are changing, and technological advances are altering how and where people shop. With the pace of change ever-quickening, mattress retailers need to keep up. And that requires making some giant steps forward in how they sell sleep products.

We’ll outline some of the biggest trends shaping retail and show how they’re inextricably linked. Along the way, we’ll consider ways that mattress retailers can make the big leaps needed to adapt and thrive.

Driven by data

“Data is sacred. Listen to it, and let it influence your business decisions,” says KPMG in a retail trends report published by the global consulting firm in February. Numbers — closing rates, average tickets, sales per square foot — always have been important to retailers. But the data we’re talking about here isn’t all profits and losses; it’s also the demographics, shopping habits and product preferences of consumers.

TrendWatching calls data “gravity.” “It’s the fundamental force that draws retailers and consumers together. Its presence or absence shapes pretty much everything,” the global trendspotting and analysis firm says in a 2018 quarterly Future of Retail report.

In the past, collecting consumer data has been something of a challenge for sleep products retailers, which don’t have frequent, repeat interactions with customers, who are only in the market for a mattress maybe once every eight to 10 years, or a pillow every few years. But with smartphones, social media apps and websites constantly hoovering up consumers’ information, data gathering has become easier.

“This shift is being driven by the maturing of a raft of technologies that mean access to new and more powerful forms of personal data,” according to TrendWatching. “The cost of sequencing an entire human genome has fallen below $1,000. Face recognition is now how people use their iPhone. No wonder Walmart filed a patent for tech that will detect the emotional state of shoppers as they walk around the store.”

Just think of the information that could soon be available to you, for instance, as sleep tracking features are built into mattresses and adjustable bases. What if, someday, consumers are able to share that information with you, if they choose? You could check in on a customer 30 days post-purchase, knowing that they are sleeping well and congratulate them on their new mattress purchase. Or, if you see via tracker data that they aren’t getting a good night’s sleep, you could suggest adjustments to the sleep surface (say, the addition of a topper or even a comfort return).

That’s in the future. But plenty of data is available today. Mattress sellers need to think of themselves as data collectors as much as retailers — and devote the resources, including staff, to gathering and analyzing information available across retail channels. The results will allow you to hone your operations, as well as your merchandising and sales strategies, to improve efficiency and better serve customers.

To strengthen your data collection efforts, TrendWatching suggests you ask yourself three questions:

  1. What kind of deep data could you have access to across the entire customer journey? Online behaviors? Emotional response? Attention? DNA?”
  2. How could you leverage that data to discern hidden, unarticulated, even unconscious preferences among customers?”
  3. How will you tailor your services to the preferences you discover?”

Just for you

Why are consumers willing to part with all that data, even in the face of privacy concerns? Simple. They want the personalized products, services and deals that data dives enable.

“From experience to products to services, consumers want and are willing to pay for personalization,” the KPMG report says. (Side note: Even if consumers are willing to part with information, it’s incumbent upon retailers to take steps to protect their data. Don’t risk losing their trust, or violating laws, through data breaches or improper use of information.)

In fact, 42% of all consumers and a significantly higher percentage of millennials (63%) say they would pay more for improved personalization, according to a survey of consumers and retail executives released in January and conducted by Wakefield Research for The Retail Doctor, a New York-based retail consulting firm, and Oracle NetSuite, a maker of cloud-based business applications based in Redwood Shores, California.

“People are even changing the way they search on Google, increasingly personalizing their queries,” according to TrendWatching. “There has been a 60% growth in mobile searches for ‘__ for me’ and 80% growth in mobile searches for ‘__ should I __’ in the past two years.”

Unfortunately, 80% of consumers “do not feel they are provided with a personalized shopping experience both in-store and online,” according to The Retail Doctor/Oracle NetSuite survey.

The TrendWatching report backs that up, finding that 71% of consumers are frustrated by an “impersonal shopping experience.” But, if retailers can do what TrendWatching describes as moving from offering a good customer experience to providing a personalized intimate experience, customers might be more satisfied.

KPMG describes the new paradigm as “deep retail,” or “the use of profound learning about customers to allow for retailers to develop personalized, tailored shopping experiences, products and services.” In short, deep retail leads to hyper personalization.

“We will see retailers tap into real-time behavioral data to understand consumers on an emotional level and take analytics technologies to the next level. AI, image recognition and mood analysis provide deep and detailed understandings of consumer attitudes, reactions and patterns,” according to the KPMG report.

How will retailers better customize products and shopping experiences to individual shoppers? Think augmented reality mirrors. Fit specialists. Bespoke products. Personal stylists. All made more effective by data collection and all part of a highly personalized shopping experience that allows consumers to try and test to ensure they are buying not just the right product but the right product for them.

Personalization can take a variety of forms, depending on product category and retailer. Online apparel services like Bombfell, Stitch Fix and Trunk Club use customer data, algorithms and personal shoppers to help customers create their perfect wardrobe. TrendWatching notes that Chinese retailer Alibaba partnered with shopping mall InTime on an augmented reality mirror: “Via the mirror, customers can virtually test makeup looks and, if they like the products, can make purchases at an adjacent vending machine using a QR code link on their phone. The vending machine includes cosmetics brands such as Benefit, Lancôme and Shu Uemura.”

And then there’s Japanese clothing retailer Start Today, which teamed up with StretchSense in New Zealand, to create the ZozoSuit, according to the TrendWatching report. “ZozoSuit is embedded with 150 sensors, which collect 15,000 body measurements. The garment connects to a mobile app that shoppers can use to order custom-fit clothing,” the report explains.

In mattress retailing, the retail sales associate has long functioned as something of a fit specialist, helping shoppers choose the right mattress. And some mattress retailers and bedding manufacturers have used pressure-mapping systems and other data to aid shoppers in narrowing their selection.

But as technologies advance and consumers grow increasingly comfortable sharing personal data (including their measurements), mattress retailers can better combine personal suggestions from RSAs with data-driven recommendations that will help shoppers make better, quicker decisions. Imagine in the future, instead of having consumers lie on a few mattresses in-store to assess comfort preferences, that, before going to the store, they upload a photo of themselves from their phone, give a bit of information about their sleep habits and health concerns, and get back a list of three mattresses to try when they arrive. Or maybe they’ll slip on a ZozoSuit-like contraption that will help them choose a mattress comfort level.

Personalization starts with picking the right product but it doesn’t end there. For some consumers, the ultimate personalization is a customizable product. In terms of sleep products, think about offering more mattresses and pillows with reversible and changeable components, including adjustable fills and switchable comfort layers. For mattresses, customization already is made that much easier because of the zippered covers on many of today’s beds. Is the next great step for mattress retailers to sell layers, components and covers for bespoke combinations, in addition to finished, whole beds?

The human touch — even from a chatbot

All this data collection and drive to personalize the shopping experience for consumers is linked to another big retail trend: the rise of interactive technology.

KPMG points to two technologies as most significant: smart speakers and chatbots. The number of people who have smart speakers in their homes doubled quickly from 2017 to 2018, to more than one-quarter, the KPMG report says. Growth is expected to continue apace, as consumers enjoy the ease and convenience provided by the in-home shopping and information assistants.

The use of chatbots also is growing rapidly, and the electronic communicators are expected to be “involved in 85% of all types of business to customer interactions by 2020,” KPMG says. Eighty-five percent!

“Humans are becoming more comfortable with robots and are happy to interact with chatbots and smart speakers,” the report says. “Use this to your advantage with consumers and your own business.”

But as retailers increasingly rely on technology to interact with consumers, they can’t forget shoppers’ need for human interaction and personal connections, whether that’s in-store or online, says Matt Matsui, chief product officer for Calabrio Inc., a Minneapolis-based maker of contact center software.

To ensure customer interactions are useful and satisfying for consumers, some retailers might take the big step of adding a “virtual store manager, a person who will digitally connect with, and engage, customers the same way they would in a brick-and-mortar store,” Matsui writes in an April 2018 blog for RetailCustomerExperience.com. Or it could mean using technologies for phone systems or chatbots that better mimic human communication by using emojis, slang and other conversational conventions to make customers feel better understood.

Matsui predicts that speech technology will eventually be able to understand customers’ hesitations, shifts in tone, even sarcasm. Such changes will allow retailers to better employ chatbots and other technologies without turning off customers.

“A veiled threat, extended pause or a subconscious change in the use of functional words — the filler words like prepositions and pronouns that surround content words in a sentence — can indicate that a customer may be ready to sever the relationship with a once-loved brand,” Matsui explains. “But, if companies can detect the hidden meaning and identify the warning signs, the right steps can be taken to rebuild customer trust before it’s too late.”

Meaningful brick and mortar

If your brick-and-mortar business has survived the market blows of the past few years, congratulations! Despite thousands of store closures and retail bankruptcies, consumers have shown they still like to visit a store — if the store gives them a reason to do so.

According to The Retail Doctor/Oracle NetSuite survey, nearly all consumers (97%) “agree there is a need to go into a physical store to purchase items and the majority (70%) believe the most appealing retail stores have features that simplify and streamline the shopping experience.”

That “simplify and streamline” part is key. Online shopping has accustomed consumers to ease. They like shopping when and how they want. To keep moving brick-and-mortar locations forward, Fast Company writer Elizabeth Segran suggests retailers take cues from online retailing and also shrink stores sizes to focus selection, among other things.

She uses clothing retailer Everlane as an example. The San Francisco-based company sells primarily online with just a few stores, where it uses in-store technology to “connect a person to their online profile, so they can use the credit card they have on file to make a purchase,” Segran writes in a January Fast Company article. It’s a clever, seamless process that builds on something consumers like about online shopping — e-retailers remember preferences and buying habits, and keep a credit card on file for super-fast payment.

The Retail Doctor/Oracle NetSuite survey backs up that strategy, finding that 36% of consumers say a top feature in attracting them to a physical store is that it has options consistent with online.

According to the survey, shoppers also want cleaner store layouts, with 35% saying such simplicity is a top feature they seek in a retailer. And that means some mattress retailers may want to consider making a big change in how they display mattresses — and whether they need the large stores they occupy. Today, many mattress retailers have 30, 40, 50, even 60 beds on their floor. It’s a lot, especially if an RSA is going to suggest — as many in those big stores do — that shoppers rest-test only a handful of mattresses to avoid confusion and save time. Segran notes that in many retail segments, the future is smaller stores with focused lines and less inventory because shoppers will visit the store to try out products and then order online.

Segran and other observers of retail trends also forecast that successful, sustainable brick-and-mortar retailers are going to need a specific raison d’etre. In other words, it’s not going to be enough for a mattress store to be a mattress store, not when customers can order online and have a bed delivered to their door in days. Back to the Everlane example, which, Segran says, has stadium-style seating in its San Francisco location just for hosting events. Parties, speakers and other gatherings help build a sense of community and excitement and give shoppers a reason to visit, rather than stay home and click “Buy Now.”

It’s about creating an experience, and it’s a trend driven by millennials, who would overwhelmingly prefer to spend money on experiences or events than things, according to KPMG. In fact, nearly 70% say “attending live experiences helps them connect better with their friends, their community and people around the world,” the report says. In response, KPMG says, “give your consumers a good experience. Experience is everything and consumers are willing to pay for it.”

Help Wanted: Curators, Mixologists Among New Retail Roles

future of retail stock art 2Today, you might be hiring a new store manager or retail sales associate, but are those going to be the right roles to move your business forward?

Marketing executive Harsh Jawharkar argues that in today’s “era of the consumer,” retailers need to rethink their staffing and add positions that focus on creating personalized, seamless customer experiences. He suggests five jobs that should become key roles at retail.

  1. The curator: “Curators have their customers’ pulse, understand their needs, and deliver the right products online and offline for them to buy,” Jawharkar writes in a 2017 Forbes article. A retail curator is a step up from a personal shopper. Think of apparel subscription and styling services like Bombfell, Stitch Fix and Trunk Club. “An advanced algorithm may be able to keep track of trends and tastes, but as of today, only a human can connect with a customer’s emotional needs and desires,” he says.
  2. The scientist: The retail scientist isn’t mixing up concoctions in a lab, but, instead, analyzing data. You could also think of this position as a data wrangler. “Data is a retailer’s most potent weapon, online and offline. At all steps of the buying process, customers produce a veritable treasure trove of data that’s easy to collect but challenging to leverage,” Jawharkar says. You can employ data scientists to work in any part of your operation, from fulfillment to marketing. They also can work across functions.
  3. The mixologist: This role focuses on creating a great customer experience across shopping channels. “The mixologist is a multichannel merchandiser weaving retail experiences that span the online and offline worlds, connecting customers to the brand both before and after the purchase,” Jawharkar says. Cosmetics retailer Sephora, which “maintains a personalized and reactive shopping experience on its website and in-store,” excels at this, he notes.
  4. The expeditor: This is the role your operations manager position should be evolving into, Jawharkar says. “A master expeditor is an oracle who has their finger on the pulse of the company, staying one step ahead of trends and fashion — and is able to align the supply chain to deliver them quickly,” he writes.  “…In an age of instant gratification and agile manufacturing, expeditors maintain the relationships and the balances that produce and move products where they’re needed, when they’re needed.”
  5. The dot connector: In an omnichannel retail environment, this role is vital. Dot connectors “understand the technological needs of both customers and customer service alike,” Jawharkar says. “Equal parts scientist, engineer and communicator, they discover the right methods, implement the right tools, and teach the right people how to realize the full potential of a retailer’s assets.”

TripAdvisor and Expedia but for Mattresses

Could consumers start buying mattresses the same way they purchase airline tickets and reserve hotel rooms?

In a January article for Harvard Business Review, authors Bobby Gibbs and Nick Harrison explore the possibility of “independent curating engines” like TripAdvisor, Expedia and Kayak being used to search the internet for the best deals on a host of products. Spoiler alert: It will happen, they say.

“A new generation of retail choice engines will work more clearly on behalf of customers by offering transparency, neutrality and an unlimited catalog. Just as flight intermediaries such as Google Flights, Hopper and Skyscanner find the lowest possible prices, agnostic digital retail curators could direct consumers to the retailer offering the best deals — or advise them to delay a purchase when a promotion is likely,” Gibbs and Harrison write. “When this happens, we expect that retail curators will become an industry on their own, changing the structure of the retail sector and capturing a significant share of retail sales.”

The models for such curating engines vary, but essentially include three types: market mappers that search and then organize options across many sellers for consumers, digital personal shoppers that combine artificial and human intelligence to provide options personally chosen for a customer, and review aggregators, which gather together product reviews and customer testimonials.

But what could be a valuable tool for shoppers, could spell doom for some retailers that might go the way of travel agents, Gibbs and Harrison warn. Retailers that survive this coming disruption, the authors say, will “give customers good reasons to keep coming to them directly.”

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