TECHNOLOGY

Retail Tech Predictions for 2019

BY Marianne Wilson

More disruption and more innovation.

That’s the outlook for the retail tech industry as it continues to focus on the adoption of disruptive and innovative technologies, according to a new study from IDC entitled “IDC FutureScape: Worldwide Retail 2019 Predictions.” The technologies will drive digital transformation (DX) forward at a rapid pace.

“The future belongs to visionary leaders and forward-thinking organizations that are able to break the shackles of legacy systems and accelerate mastering digital-first strategies,” said Leslie Hand, VP, IDC Retail Insights. “The thrivers will be those that champion data-driven, experiential, and personalized approaches to experiential retail business and IT.”

IDC’s worldwide retail industry 2019 predictions are:

• By 2020, DX acceleration among the “digitally determined” will result in 20% of retail organizations advancing to stage four of DX acceleration.

• By year-end 2019, 50% of retailers will plan to implement a digital “core” platform, which will enable faster innovation, continuously utilizing insights to drive intelligent actions.

• By 2021, 30% of retailers will provide real-time contextual experiences wherein conversational search is empowering, services find customers, content supports sales, and consumers monetize their data.

• By 2020, retailers will increase track-and-trace and predictive agile execution investments by 30% to meet consumers expectation of real-time order visibility and perfect delivery performance.

• By 2022, retailers will double investments in distribution automation to meet the dramatic increase of single-item, one-click impulse and auto-replenishment ecommerce and marketplace orders.

• By 2021, 30% of retailers will provide real-time contextual experiences wherein conversational search is empowering, services find customers, content supports sales, and consumers monetize their data.

• By 2023, 25% of retailers will create more customer “promoters” by interweaving customer experience, product and service development, and assortment orchestration to grow 25% faster than their peers.

• By 2022, retailers will have increased investment in workforce technology and training by 30% to equip staff for competitive and differentiating customer experience–focused roles.

• By 2023, 40% of nonfood retailers will have capabilities to profitably mass customize new product introduction, including new “lot size of one” design, buy, make, and move skills and systems.

• By 2023, 50% of retailers will have implemented IoT in at least four digital transformation use cases, also enabling the reallocation of up to 3% of operations budget to innovation budget.

• By 2020, retailers will have raised annual spend on data privacy safeguards by 25% given heightened concerns about data privacy and regulatory requirements including the EU’s GDPR.

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TECHNOLOGY

CarMax to offer online purchasing

BY Marianne Wilson

The nation’s largest retailer of used cars is letting customers bypass having to visit a dealership to purchase or even pick up a vehicle.

CarMax is piloting an “omnichannel” buying experience in the Atlanta area, with plans to roll it out nationwide. For the first time, CarMax customers will be able to puchase a car online. The company is also launching a new express pickup option, which allows customers to do most of the process online and complete their purchase in store in as little as 30 minutes.

“The Atlanta launch is only the beginning,” said Bill Nash, CarMax president and CEO. “We plan to continuously improve the new omni-channel offering and scale nationwide. We anticipate having this new buying experience available to the majority of our customers by February 2020.”

CarMax said that customers in the Atlanta area can can now complete the entire car buying process from home — including financing, appraisal and paperwork — without visiting the store. They can also have the vehicle delivered directly to home or work and test drive before buying, with no requirement for the customer to purchase prior to having the vehicle delivered.

The company said its consultants are available to assist customers, in-person and also via phone, text or email.

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Commentary: A Closer Look at Gen Z

BY Guy Yehaiv, Profitect

Generation Z (Gen Z) is the newest emerging consumer group, born after the mid-1990s through the early 2000s, these consumers are quickly reaching the age of substantive disposable income. According to a Bloomberg analysis of United Nations data, Gen Z will comprise 32% of the global population of 7.7 billion by 2019. This means retailers who have been focusing on Millennials (which comprise 31.5% of the population), should be actively working to understand this emerging group and accommodate their preferences.

As the first generation to grow up completely immersed in technology, there have been many generalizations about Gen Z. They can’t communicate face-to-face. They are passionate, but impulsive. They are so engaged in technology, they are less likely to be in-store shoppers. They have short to almost no attention spans. Despite these stereotypes, it’s important that retail leaders truly understand their Gen Z consumers and not get caught up in inferences.

To help retailers better understand the true insights and preferences of the Gen Z shopper, Profitect recently released the findings of the Profitect Gen Z Consumer Survey of more than 1,000 U.S. shoppers, ages 18-22. The survey provides insight into Gen Zers, so retailers can better understand their attitudes towards in-store shopping, products, and even working in retail themselves. A few interesting facts include:

•Gen Z Shoppers LIKE to Shop in Stores
There is a misconception that since Gen Zers are digital natives (grew up with technology, easily communicate via chats and social media channels) they will be hesitant to head to brick-and-mortar stores to shop. However, results of the survey found that 76% of Gen Z respondents chose the store as their shopping destination over only online purchases. The survey revealed that 42% of Gen Z respondents actually preferred to shop in-stores over online and an additional 34% prefer to shop in-stores and online equally, leaving only 23% of Gen Zers who prefer to shop online.

Retailers need to ensure they capture a Gen Zer’s interest while in store, with great displays, customer service, curated localized assortment and more. In-store shopping should feel like an experience rather than a transaction.

•In-Store = More Items
Our exclusive survey data found that about half of Gen Z respondents said that browsing in-stores is their biggest influence to shop. Furthermore, 67% of respondents also indicated that their feelings at the time is what most prompts them to add more items to their shopping basket.

Survey results indicate Gen Z shoppers are openly emotional, and can be impulsive when shopping, like other generations beforehand, so retailers should understand this trait and play to it with in-store messaging, displays, and promotions, making sure it is all aligned with online message, since Gen Zers like to check product attributes online prior to shopping in the store. Nearly half of Gen Z respondents said that in-store displays influence them to add items to their basket. Retailers should pay close attention to store merchandising or promotion data to improve future performance, especially when targeting Gen Z shoppers.

•Inventory Accuracy is Critical
By 2020, there will be 2.1 billion digital buyers worldwide. Gen Z makes up a large portion of this cohort and making sure you’re creating the optimal omnichannel experience is important. Our survey found that 60% of Gen Zers will check a product’s in-store availability prior to going to the store.

Additionally, 21% indicated that if they found that the website said the item was available and then once they went to the store discovered it was not, they would NEVER want to shop at that retailer again. An additional 59% indicated it would severely annoy them. Retailers simply can’t afford to have more than 80% of their Gen Z audience frustrated with their brand, especially when they want to be in stores and adding to their baskets.

Inventory accuracy is critical with this audience. Retailers should look at prescriptive analytics solutions that can drive actionable insights out of their inventory data to drive inventory integrity and identify opportunities for action that can result from operational execution lapses, procedural non-compliance, fraud, vendor quality, transportation, DC/DSD performance, quality, planning and allocation gaps, and more. The right solution should deliver results quickly.

•Reports Are Not the Answer
Another interesting insight showcased that retail is a stronghold for entry-level jobs with young Americans, with 44% respondents touting employment in retail/grocery. What’s more, 65%  of these Gen Zers proved that antiquated processes in task management and reporting across today’s workforce landscape are a detriment to attracting this generation.

Gen Z is used to seeing reports as part of their everyday job however, two-thirds of those respondents claimed the reports are too long and time-consuming. And an additional 30% felt that reports weren’t relevant to the job or too complicated to understand. Retailers and CPG brands need to adopt smarter task management solutions that bridge the gap for Gen Zers and enable employees to work more efficiently to improve business operations. Our study reiterates the need for a smart analytical solution, such as prescriptive analytics, that disseminate simple, easy-to-understand instructions or assignments in the workplace.

Looking Forward
So, what does this mean for retailers? They should be sure to capture a Gen Zers interest while in store, for those who prefer it, and supplement with online promotions driving others into the store, for those who might be indifferent to in-store or online. While this survey was focused on Gen Z preferences for retail, its findings ring true across a variety of industries. I encourage all brand leaders to take a deeper look into this growing and influential group of individuals and adjust sales strategies accordingly as they truly are the future.

Guy Yehaiv is CEO of Profitect.

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