Feature Story

Creating Exciting Customer Experiences Through Technology

NRF 2017 showcased everything from WiFi to Robotics, proving digital transformation is table stakes in the retail world.

“There almost has to be a perpetual revolution going on in each company,” said Sir Richard Branson in a keynote at the National Retail Federation’s “Big Show” in New York. “Because if you don’t have that happening, someone else will do it to you.”

Branson should know. For all his innovations in retail, music, airlines, and even space travel, he has been on the wrong end of digital disruption. Most famously when a new platform called iTunes upended his glitzy, global Virgin Megastores.

“Being able to move quickly and grab opportunities,” Branson learned, “is very important.”

Branson’s message of reinvention — to the point of constant revolution — was a core theme at NRF 2017.

This means reinventing your technology, for sure. NRF was filled with everything from robots and wearables to virtual reality and artificial intelligence (AI). But also reinventing relationships. How your people use that technology to create a seamless and exciting customer experience.

“Technology is changing the way we shop, the way we enjoy products, even the definition of what a store is,” said Intel CEO Brian Krzanich. “And at the heart of that customer retail relationship is data.”

In an industry that ranks so high in disruption, it’s critical to be prepared even for what you don’t see coming.

In one of the sessions at NRF, Joelle Kaufman, executive vice president for strategy and business development for Westfield Corp., warned that every retailer must be ready for the unexpected.

“One year ago today, If I had said people would be running around your store chasing virtual creatures to collect on their phones, you would have thought I was crazy,” Kaufman said. “But it happened in July and August, and it sucked bandwidth. You couldn’t plan for that.

You have to go with flexibility and with an infrastructure that will scale up as you need it.”

That flexibility must extend to your culture, Target Chief Information and Digital Officer Michael McNamara said. “We now have an agile infrastructure and an agile organization,” he said. “We’ve kept things simple. Sometimes we’re a bit scrappy, but we are nimble and open to change.”

Creative thinking will be especially important in the brick-and-mortar space. “Even in ten years’ time,” McNamara said, “eighty percent of trade is still going to be in brick-and-mortar stores, by the best estimates. Stores are going to be very important to our future. But those stores need to be not just your traditional retail store.”

Robots that Enhance, not Replace

The store of the future may include something like Pepper, an affable and very talkative robot that taps into cloud-based artificial intelligence to interact with shoppers. At the same time, it’s capturing key data about customers’ interests and dwell times.

At NRF, Pepper delighted attendees with basic information about footwear. When someone showed interest in a pair of Converse Hi-Top sneakers, Pepper extolled their “vintage style and exceptional support and impact cushioning” before saying, “Let me get you to a sales associate right away!”

That sales associate would be empowered with much deeper data insights and product knowledge, stressed Chris Norris of SoftBank, Pepper’s creator. Pepper would handle the more repetitive tasks, like explaining where the bathroom is or how to find products.

“Pepper is definitely not replacing jobs,” Norris said. “just enhancing the customer experience.”

Not nearly as cute, but just as intriguing, are robots that use advanced imaging analytics and artificial intelligence to pick and sort items.

These are a far cry from the highly repetitive machines used in manufacturing in recent decades, explained Leif Jentoft of RightHand Robotics.

“As the retail world moves more quickly,” Jentoft said. “People want products more quickly, and more customized, which puts pressure on the supply chain.”

Smarter robots can sort through thousands of different products, in a warehouse, store, or off a conveyor belt, and pick only those that fit the needs of a specific customer. These could be cosmetics, prescription drugs, just about anything.

“The important thing is, you want to have the right selection of goods going out to the customer when they need them,” Jentoft said. “Our robots do this in real time.”

2017: Battle Lines for Retail Tech

Meantime AI is poised to revolutionize retail, predicted Jonathan Epstein of Sentient Technologies.

“Because this is really the year that the battle lines for the future begin to be drawn. And there will be people who take advantage of these new technologies like AI and robotics and those that don’t.”

Sentient is bringing AI to e-commerce, which Epstein believes has not changed much in 10 years. “We are an AI company because we believe that e-commerce has failed by and large,” he said. “E-commerce has a 3 percent conversion. If we had a physical store with that conversion rate, we would shut down that store.”

With AI, companies like Sentient are creating a much more personalized and relevant online shopping experience, one that “learns” and evolves as your shopping journey progresses.

Virtual reality (VR) and augmented reality (AR) are also gaining in retail. Recon Jet Pro, for example, demonstrated smart eyeware that guides warehouse workers. And Augment shared an AR app that allows shoppers to experience products in novel new ways. For example, to see just how furniture or an appliance would fit into their home — before purchase.

Regardless of the technology, it all comes back to the customer.

Ratnakar Lavu, CIO of Kohl’s Department Stores, has employed everything from mobile payments to artificial intelligence to drive a deeper customer relationship.

“This transformation required us to be focused on one thing and one thing only, which is our customer,” Lavu said, “We understand our customer, we understand what our customer’s needs are, and we want to provide the right experience end to end.”