Expert Opinions: Retail Predictions 2020
Randy Fields, CEO, Park City Group
• Fads will crash: Several leading retail tech bubbles will pop, including blockchain and autonomous delivery. Companies will shift away from the bleeding edge and toward projects that actually have a real return on investment.
• Fighting the right war: There will be a move away from fighting the old retail war, which was all about pricing, and toward fighting the real retail war, which is all about product availability at the shelf and convenience. It will be won by companies being consistently in-stock with specialty and local foods, DSD items and a variety of easily prepared meals.
• Exacerbated by Out-of-Stock: SKU/assortment expansion will continue to the point where the problems from out-of-stocks and required capital investment outweigh the shopper engagement benefits.
• Bad and good news for Amazon: Amazon will increasingly fail at its physical retail business because it doesn’t have an online advantage there. To beat Amazon on its own ground, traditional retailers need to walk around their stores and ask whether the shopper will wait a day or two to buy this product. If the answer is yes, there is the distinct probability the item will be disintermediated and the shelf space should be given to something more experiential for the shopper.
Craig Silverman, CEO, Antuit
• Touchless Demand Planning: Artificial intelligence will improve forecast accuracy, especially for new and slower turning products, such that more and more demand planning will become no touch or low touch, requiring human intervention for only the most value-added product scenarios.
• Unified Demand Signal: Rather than rely on siloed solutions, companies will start incorporating the same demand forecasting signal across their organizational functions – from sales planning to demand planning to pricing/promotional planning – each working off the same near real-time data and algorithms, so decisions applied by one function are immediately seen and impact understood by other functions.
• Omnichannel-Ready Merchandising: Softlines retailers will start to rely on advanced analytics and artificial intelligence to more intelligently price and assort their merchandise pre-season, then make in-the-moment promotional and markdown decisions in-season, to maintain and improve their sell-through while providing their customers an exceptional experience no matter where they choose to purchase or return.
• More personalized loyalty programs: Consumers will start to demand, and retailers and restaurant companies will have to step up their game to provide, hyper-personalized 1:1 offers that are highly relevant to each individual consumer to not only ensure their loyalty with repeat business, but to increase frequency of visits and size of each basket or ticket.
Johanna Småros, CMO, Relex Solutions
• Increased focus on sustainability: Food retailers will prioritize food waste reduction, while online/omnichannel retailers need to address a rising awareness that home delivery, in its current form, isn’t all that sustainable.
• Ubiquitous AI: As retailers grow better educated on AI, solution providers will face increased pressure to deliver a real business case, not just cool experiments. New use cases for AI should emerge in the optimization of operational efficiency.
• Continued turbulence in retail: The pace of change in retail will stay high, with well-funded players like Amazon continuing to engage in both price and fulfillment wars. Some consolidations and casualties are likely to result, but retailers that have prioritized agility/adaptability will innovation and experimentation.
• Happier store associates, happier customers: The retention of talented staff will emerge as an important avenue toward improved customer service and experience. Some states have introduced legislation requiring employers to provide more predictable and better-balanced work shifts. This will become an important talent retention strategy going forward, even where not required by law.
David King, retail industry advisor, Teradata
• Personalization scales: Leaders will connect large, disparate data sets such as clickstream, retail journey, social and IoT and leverage AI and ML to orchestrate and ease customer journeys across touchpoints. Focus will be on product and service curation, and localization across offers, purchase, setup, service and support. If they build trust and avoid being creepy, companies will find customers willing to exchange information in return for better experiences.
• Supply chain is sexy again: Supply chain leaders will balance constant cost pressure with expectations to manage multi-channel demand, real-time forecasts and exact inventory tracking. They will leverage IoT, RFID, sensors, cameras and eventually blockchain. Major investments in advanced analytics, warehouse relocation and automation both in distribution centers and stores will be essential to survive the arms race with digital retail giants.
• Help me help you: Mobile enablement for retail associates will take emphasis in order to empower store teams to know or predict customer behavior, purchase history, service history and preferences across channels. The key is in curated real-time insights that store associates can have at their fingertips as they engage with their shoppers in store in 1:1 conversations.
• Augmented reality becomes, well, reality: “Try on before you buy,” “see what your friends think,” “explore possibilities like recipes” and “find it in store” as smartphones become AR devices that will help decrease product returns and facilitate happy customer journeys. Augmented reality will help customers make better informed choices, both at brick-and-mortar and online.