Big Data and Analytics Transforming In-Store Experience for Retailers
I worry a lot when you staple those words to almost anything. For many retailers it makes it seem so daunting as to provoke paralysis. Despite having spent some time in the big data world, I’m actually a huge believer in small data. And for most retailers there is a ton of opportunity there. The problem with big data is that the majority of retailers simply aren’t big enough to have a volume of data so great that relatively obscure and hard to find insights are of sufficient scale to deliver a material return. Said another way, if you need big data tools and analysis to uncover an opportunity, chances are it is going to be too small to be worth harvesting. Big opportunities tend to stick out sufficiently so as not to require an army of data scientists to uncover them. So before retailers apply big data to their store experiences, they should make sure they have the basics right. For example, if you are a reasonably high touch retailer, are you doing a good job recognizing your customers? You can’t overlay an all knowing algorithm if you don’t even know who you are talking to in the first place.
Prevailing Retail Technology Trends
A few months ago I would have said “payments.” Chip and pin just wiped out the time and ease advantage of the card swipe. So mobile payments in-store suddenly get a lot more interesting, particularly when you add touchless and loyalty. But while that’s still on my list, I think natural language interfaces are now at the top. The impact of Amazon’s Echo and its imitators have the potentially to roar up on retailers as fast as the internet did in the late ‘90s. The implications are likely to be massive across how people shop, how we market, how we sell. Just think how mobile changes. Or how new playing fields will open up? Could we be talking about “in-car commerce” in the near future?
The mobile device is where the most relevant and impactful near term innovation is going to lie for retailers
Typing, tapping, swiping have all been revolutionary forms of interaction. But voice is so much easier and powerful as a way to translate thought into action. I don’t have a crystal ball, but it feels logical to me that voice interfaces will be the next place consumers will race ahead and retailers and marketers get left panting in their dust.
Evolving Role of a CIO
I’m not a CIO, but I’ve had the pleasure of observing and working with many over the past 20 years. There’s been a complete generational turn over as you would expect, but with it there’s been a complete reorienting as well. Not just the role, but the people in it and how they think about the world. CIOs not that long ago were all about minimizing risk. They were not just a cost center, they were a risk center. Now the CIO is driving change, pushing for smart risks, pushing her colleagues to think differently. They are in the middle of innovation as drivers and thought partners, not just order takers. It’s really a complete 180. And I think it’s great for retail and great for CIOs. Their role and influence is likely to keep growing. How could it not? And I expect that down the road CIOs may feed the retail CEO role in the same way merchant and store organizations have traditionally done.
It’s All about Focus
Focus. Figure out the important stuff, filter by do ability, and then focus on a small number of the highest value things that are achievable for an acceptable amount of time and resource. It’s that simple. But so hard to do unless you are really disciplined.
IoT in Retail is going to have a lot of distracting “shiny objects.” Things that can be done are not the same as the things that should be done. And new technology tends to get populated with a lot of “could” before we finally filter down to the more valuable “should.” So with that caution in mind, I think retailers need to be careful and pragmatic. A fridge that can reorder milk is interesting. But is that a pressing unmet consumer need? How does the new milk actually get to the fridge? Does the average consumer use enough detergent and need it so urgently and unexpectedly as to require a button on their washer to summon more? There’s a lot of this kind of thing getting a press and hype. But these headlining IoT examples so far strike me as cool but maybe with still a way to go before becoming valuable. Don’t get me wrong, there will be value in IoT. But it may be more mundane in places. Maybe the fridge and washer just get to have a say in my shopping list as opposed to being autonomous replenishment agents. Maybe the delivery guy’s truck becomes trackable so instead of a 4 hour window I can be home just-in-time. The less cool stuff often is the stuff that wins.
More generally, as retailer the “thing” I would watch most closely is the one already in everyone’s pocket or purse. The mobile device is where the most relevant and impactful near term innovation is going to lie for retailers. Things like payment, voice, identity and recognition. And it is and probably will remain for some time the hub of any peripheral IoT devices and connections.