Being Digital Doesn't Guarantee Success, But It Is Necessary
In the changing world of retail, winners and losers aren't obvious. Traditional brick-and-mortar retailers have made comebacks, while celebrated digital companies have failed.
It is companies with strong fundamentals and a willingness to experiment that are most likely to succeed in the increasingly data-driven retail environment, said Google managing director - retail Kiran Mani during a keynote presentation at the February WPP Checkout event in Miami.
"Digital brought in an element that retail has never seen before — a faceless consumer," Mani said. "All of a sudden you have to guess a consumer without seeing them, and meet them at their convenience."
The old goal for a retailer to have 80% of stores meet the needs of 80% of shoppers through 80% of their assortment is no longer relevant now that 93% of Americans are spending time online. Knowing how to reach these consumers requires a deeper understanding, which is a challenge since only 1% of retail data is analyzed.
"Everything that the customer does today is a data point," Mani said. "Technology for technology's sake is taking the background. People are talking now about how to put the technology to use."
The biggest retailers including Walmart, Amazon and Kroger have spent billions investing in data. Most retailers can't afford to do this, but there are some affordable changes smaller players can make to improve their standing. The average retailer website takes 22 seconds to bring up on a mobile phone. Mani said companies that can lower their site load speed to five seconds will increase sales. Retailers should also consider pain points for shoppers, reducing the number of times they need to click to make a purchase and making payment easier.
Retailers should primarily focus on catering to the 2 billion shoppers with mobile devices rather than worrying too much about the millions with voice assistants. Alexa and Google Home do provide challenges for brands since voice ordering is mostly done at the category level and advertisers can no longer rely on visual cues, but those same things make it hard to know the price of an item, which can turn off shoppers.
"We all collectively belong to a generation that is extremely value conscience," Mani said. "We might be shopping for Teslas, but we love a discount. The magic is going to happen when voice connects with your TV and you can use visual and voice cues."