The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
This post originally appeared on Forbes.com.
The Container Store’s next-generation prototype outlet in Dallas features 18 digital screens to provide customers with everything from inspiration to practical tips to an interactive design tool. At its NYC flagship store, H&M is testing voice-activated mirrors that will offer style advice and discounts. French beauty brand L’Occitane en Provence is leveraging augmented reality and stationary bikes to let visitors to its Manhattan store take a bike ride through Provence. In each of these cases, technology is a means to an end, but not the end itself.
In today’s digital era, technology is becoming more intertwined across all the steps in the path to purchase, including the overarching customer experience. Retailers and brands are making use of technology to deliver a truly curated experience for the individual, catering to personal tastes, preferences, beliefs and lifestyles for absolute consumer centricity. When it comes to curating the customer experience, though, the technology itself should always be viewed as the enabler, not the instigator.
Improving the customer journey was identified as a top concern among business leaders today in a recent survey conducted by Euromonitor International. In order to better understand the ongoing digital transformation, Euromonitor conducted an Industry Insights Survey of 1,445 professionals around the world in February. The survey gauges where companies are placing their tech bets and how industry players see these initiatives impacting commerce in the future.
When asked about the most important commerce-specific development in the coming 12 months, 76% of respondents said it was improving the customer journey and user experience. This was rated as more important than creating a consistent brand experience across channels, becoming customer centric, integrating new technologies or deepening customer loyalty programs, which rounded out the top five responses.
In an era defined by endless choice and commoditization, the customer experience is quickly emerging as a key differentiator for retailers and brands. For most selling in the physical retail channel, the customer experience will become fundamental to its future business and could potentially generate a new revenue stream, if brands or retailers were to charge an entrance fee for the opportunity to go through the experience. In that sense, experiences will not just showcase and sell products, but will become the product itself.
Several factors have converged to make this the new reality. Retail is more ubiquitous with traditional channels, pop-up stores, social commerce, subscriptions and everything in between. Retail products are often just a push of a button away thanks to e-commerce. These technological advances are making it possible for a consumer to detach the purchase decision from a retailer, or brand for that matter. The erosion of consumer loyalty among the most well-known brands highlights this epochal shift unfolding in commerce.
In the past, purchases were more transactional in nature. Consumers would find a brand that did what it promised and reward consumer packaged goods manufacturers with a consistent purchase for weeks, months or years to come. Now shopping is a journey, whose purpose is not just about buying, but also relationship building, a megatrend that Euromonitor has dubbed as “Shopping Reinvented”. The ideal journey weaves a brand into the entire experience, providing value before, during and after the purchase, converting a transaction into a relationship.
At the same time, a consumer’s status has become less likely to be defined by conspicuous consumption, or the keeping up with the Joneses idiom, which refers to the comparison of one’s neighbor as a benchmark for social class or the accumulation of possessions. In fact, only about 30% of connected consumers globally believe that the car someone drives says a lot about the individual, according to Euromonitor International’s 2017 Lifestyles Survey. In contrast, 39% say they would rather spend money on experiences rather than things. But above all else, consumers report desiring more simplicity, individualism and discovery.
Even so, the aforementioned stats speak to a fundamental shift in consumer values, namely the desire to experience more. The “Experience More” megatrend, as coined by Euromonitor, highlights the shift toward experiencing over acquiring, but the definition goes further than this. As well as prioritizing experiences over possessions, consumers are also more demanding of the experience brands provide. This is impacting a variety of sectors, including the shopping experience in retail.
While retailers used to compete on product availability or price, the customer experience is now emerging as the key differentiator. Technology can act as an enabler by enhancing the overall experience, whether through big data capture to improve targeting through tailored choices, or by technology being overlaid with reality to augment the experience. Technology plays an ever-greater role in helping consumers navigate mass choice to find the optimum brand experience.
Brands looking to truly connect with their end-consumers can use immersive technology, where digital becomes central to the brand experience. By doing so, brands can potentially create a truly curated experience for each individual. Of course, consumers expect the experience itself to be seamless. The key is that technology must improve efficiencies and remove pain points to be viewed as enhancing the experience.
The fact of the matter is that the digital storefront has become the first port of call for many consumers when looking to shop or interact with brands. As such, it is important to consider developing a tech-forward customer experience, but retailers and brands also should not deploy technology for the sake of using technology. Companies must first understand their brand ethos and the type of experiences they should curate in order to inspire, excite and convert consumers. Whether technology will play a role in creating such an experience is the secondary question.