The shopper is now firmly in control. This is the central premise determining the direction of retail as we move into the future. Empowered with information that’s easily accessible on smartphones, tablets and other devices, shoppers can quickly find what they want at a price they know to be fair. If you don’t have it, it’s simple enough for them to give their business to your competitor instead. Retailers, well aware of who’s driving, are working hard to identify not only what shoppers want today but what they will want tomorrow. At Intel, we believe that advances in computing technology have a key role to play in helping retailers identify and satisfy consumers’ as yet unmet needs.
So, first things first. What DO shoppers want?
Increasingly, the answer is customization. And it’s worth pausing here to distinguish between customization and personalization. People often use those terms interchangeably, but they’re not the same thing. Here’s how I see the difference: “Customized” is when a customer controls how the product or service is changed. For example, when you go to a coffee shop and order a double soy latte, extra hot with chocolate sprinkles, what you get is a customized product. You, the customer, have determined the end result. “Personalized” is when the decisions about a product or service or experience are made based on knowledge that the retailer has about you. The retailer uses data to make decisions on your behalf. A prime example (forgive the pun) would be Amazon. When Amazon gives you recommendations, they’re giving you a personalized set of suggestions based on your purchase history. They have made the choices for you. This is a key distinction. With help from Big Data analytics, personalization of the shopping experience has begun in retail—we get personalized offers, reminders and so forth But what shoppers say they also want is more customized products.
A Cassandra Report survey1 of 15- to 35-year olds conducted last year reported that 79% of those surveyed said they would like to buy customized products, and they are not able to get them today. This is a huge unmet need—one that we in retail are coming closer to being able to meet. Once we get to more widely available automated manufacturing and 3D printing, we will be able to deliver a lot more customized products. The likelihood is that we’re going to see a combination of customized products delivered with personalized retail experiences. Retailers who are ready for this transformation will win.
A preview of what’s ahead can be found in Tokyo subway stations. There, vending machines with cameras inside look at the person standing in front of the machine, figure out that person’s gender and approximate age and, based on that data, highlight the product that the vending machine thinks the person is most likely to want to buy. Of course, the shopper still has a full choice—if they don’t want that product, they can choose something else—but the machine’s smart technology makes the buying process that much easier. There’s less searching, less waiting—less friction.
Shoppers want minimal friction
They don’t want to wait in lines. They don’t want to have to enter their information to buy online. Shoppers will be loyal to your brand until the moment that they find an alternative where there’s one less step or one less click required to do what they want to do. So, removing friction in the system has become a key focus, and technology has a critical role to play.
For examples of retailers who are successfully reducing friction and redefining retail value with customized products and personalized experiences, check back in this space in the coming weeks.
1 Gen Z: Winter/Spring 2015 Cassandra Report. (30 Mar 2015). Retrieved from www.cassandra.com/report/.
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