The retail of the future? Go through digital transformation and social media
DIGITAL MARKETING

The retail of the future? Go through digital transformation and social media

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New technologies, data analysis, social media, but not only: the retail of the future must integrate numerous variables. And face an increasingly experienced and smart consumer. Here’s what awaits us.

Retail is changing . The good old “retail”, whether it be food or consumer durables or not, is constantly evolving. In recent decades it has faced numerous variables, up to the complexities of today’s market. We are talking about new technologies, sales methods, social media and also a more attentive and aware consumer. The professionals of the sector are therefore in daily search for an overcoming of established models, looking for new interpretative keys. But what are they? And what does digital have to do with it? What is the future of retail?

What is retail? And what is the state of the art?

The word ” Retail ” derives from the English meaning of sale / retail trade, that is the last step of the distribution chain towards the final consumer. In short, it is pure B2B. This area over time has revolutionized the concept of logistics, production and trade , in order to get to the sale of goods while deriving the maximum economic benefit.

The NetcommForum in Milan was also recently held , one of the most significant events  in Italy for e-commerce , digital retail and the digital transformation of companies. It is no coincidence that this year’s edition focused precisely on retail. There was an important growth in retail transactions in Italy in 2017 (only in the first half of the year it was calculated a + 40% compared to 2016) and 2018 confirms this trend. This has also happened (and perhaps above all) due to the integration of eCommerce and new technologies. Just also look at the statistics and forecasts from 2014 to 2021 (source: Statista.com ).

The next challenges concern the boundary between online shopping and stores , as not only are we increasingly immersed in a liquid society, but the market itself has become more fluid. It is expected that the users involved in 2018 will be almost 2 billion and the value of global sales will reach 4.878 billion dollars in less than 4 years. This is over 300% compared to 2014 . And what about Italy ? An estimated 23.5 billion euros in 2018 for online sales, while the most relevant brands are establishing themselves in fashion, food and large-scale distribution.

Retail and Digital, synergistic connection

Digital always plays an important role in the market . Thanks to the spread of the Internet, we have come into contact not only with people, but with increasingly impacting technologies, increasingly fundamental in terms of experience and consumption. This is causing a reaction that in some ways has worried retailers: “physical” stores are in crisis. But there are those who have already identified opportunities and advantages.

“The big change is that as stores cease to be vital for product distribution, they are actually becoming crucial for the distribution of experiences ,” these are the words of one of the most influential professionals in the world, Doug Stephens . “The store allows you to engage the consumer about the brand, its products and its ‘culture’ in a way that is so visceral and emotional that it simply cannot be replicated online. Therefore, as more and more sales are attributed to mobile, social and online channels , the strategic importance of the store must shift to offering more powerful and galvanizing experiences that create love and loyalty .

In short, the store is becoming a media experience!

This means that success lies in integration . In fact, it is no coincidence that realities born on the web have decided to open sales points in the area. Just as the exact opposite is not: stores that decide to take advantage of online to improve the in-store shopping experience. We are talking about two giants, Amazon and Zara . And on the (eastern) horizon we see Alibaba , which is already thinking about a revolution in the stores.

Technology and the web in the future of retail: the cases of Amazon, Zara and Alibaba

Amazon Go, the first cashless smart shop

In January of this year, “ Amazon Go “, the first supermarket where you shop only with your smartphone, made its debut in Seattle. You arrive, open the Amazon app, enter the store by scanning the qr code (amazing, it still needs something!) On the reader, take the products you want and leave. Seeing it like this is almost moved. No more queuing at the cashier, no more re-reading of the shopping, no more wasted time . Staff? There is, of course. But it just arranges the goods or helps you if you ever run into trouble. All this is possible thanks to a complicated machine learning system: hundreds of cameras aimed at products (and also at people, the Financial Times speculates) recording everything. This way they know who you are, what you buy and the receipt arrives directly through the application. If that works, Amazon has already thought about opening 2,000 stores globally .

Zara “invents” its fast fashion retail

For its part, Zara has decided to innovate with fast fashion retail . The new concept store opened in May 2018 in the city of Westfield Stratford (UK) perfectly integrates the store and the web / app . A few examples? You can order on the app or website in the morning and go to the store in the afternoon: just the QR code and the chosen purchase will be automatically delivered to you. Or again, the self-checkout area that knows what you have withdrawn and you just have to confirm on the monitor. But not only that, of course. It is still a shop and the possibility to try on clothes and dresses remains. Except that the integrated screen in the dressing room suggests accessories or new combinations, in line with purchases or your tastes. Not bad, right?

Alibaba, how the new retail will change everything

The last case study we want to mention is that of Alibaba . Those unfamiliar with him have probably stayed in a cave in Tibet alone for the past twenty years. The company founded by Jack Ma in 1999 with the aim of connecting Chinese producers with foreign buyers and distributors has become a global point of reference. Alibaba already launched its retail vision in 2015, introducing the ability to purchase and order products through the app and pay via Alipay (i.e. with a smartphone) in Hema supermarkets .

Alibaba’s new retail vision is a mix of digital and physical experiences, perhaps the evolution of what Zara introduced. It is an ecosystem that does not claim to convert online users into offline customers or vice versa, but that puts the consumer at the center of every action . Soon we will be able to try on shoes and receive advice on monitors or smartphones on combinations, promotions or online discounts, also in relation to our shopping habits. Or find real-time prices, facial recognition at the entrance to the store, home deliveries between 15 minutes and three hours, virtual and augmented reality on the street (where to try on clothes, for example). Up to the Entertainment-Retail: what amuses, converts. An example is shaking your smartphone while an advertisement appears: the app goes directly to the product and makes you “try” it on a photo of you. Which you can also share with your friends on social media.

Social Media Marketing for “Consumer-First” retail

As reported recently at the Netcomm Forum 2018, the consumer is increasingly connected to the Internet and to other people , but not only. Above all, the new generations know how to exploit multi -channels and are ready to experiment with new shopping experiences. Retail, therefore, must take these aspects into account if it wants to give continuity and survive the new course of the market. Brands must necessarily invest in technology (blockchain, AI, VR, etc …) and first of all observe the reaction of the consumer. The experience must involve all aspects of everyday life, offering practical solutions to everyday life.

In this last aspect, a social strategy also becomes fundamental . Consumers are still influenced by traditional media, but they increasingly need a contact capable of providing assistance, detailed information and the ability to interface with brands at any time. This is why social networks are perhaps the best opportunity to integrate into future development plans. We are talking about a “total retail” that can offer a continuous and consistent experience for the consumer on the one hand and on the other, adopt a flexible organizational model for retailers .

We are not just talking about selling on Facebook (a marketplace soon to be introduced), converting on Instagram or paying through WhatsApp.

Social media must make the shopping experience functional and effective in its entirety, fueling engagement and storytelling.

But without forgetting listening and dialogue. In 2017, according to the pwc.com report, 56% of Italians were influenced to spend more precisely because of the interaction they had with social networks, and almost 60% said they felt greater involvement with the brand precisely through social media, in clear prevalence compared to most European countries.

Furthermore, the power of social media can be fueled by the “ local ” and geolocation factors of the devices . Retail must therefore foresee dynamics that can exploit both aspects, in order to guarantee total coverage of the presence, without however being invasive.

Retail as the next frontier

In conclusion: there is still a lot of work to be done and those who are not afraid to experiment will be able to secure a front row seat in the next market. New technologies, data analysis and social networks represent the keystones of future retail, but only those who will be able to integrate all aspects will be able to “make history”.

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