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When you think of digital agility, “retail” might not be the first sector that comes to mind. But, in fact, technology spending in the retail sector has ballooned in recent years, and according to Gartner, it is expected to reach $203.6 billion in 2019.
Companies such as Nordstrom, Best Buy, and Bonobos have strategically prioritized key digital capabilities — from analytics and e-commerce tools to mobile and emerging technologies such as AI and machine learning — in order to avoid displacement in the new digital economy and find new opportunities with customers.
The following three principles, curated from recent research and insights published in MIT SMR, demonstrate how successful retailers are responding to digital disruption and using insights to improve customer experience.
1. Leading with a small footprint and high experience. It should come as no shock that the age of customer experience is already upon us. Being competitive in the retail market today means being able to learn and adapt more quickly to the experiences that customers want. And while customers want great online experiences, this does not mean that brick-and-mortar will be a thing of the past any time soon.
As noted in the aptly titled article “The Store Is Dead — Long Live the Store,” while some aspects of the typical off-line or in-store experience are eroding, others are now thriving. The article highlights online-first companies such as Warby Parker and Amazon, which have already led successful efforts in the “showrooming” experience for customers.
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As the authors point out, “Showroom experiences create better customers: Customers are exposed to the brand in a more meaningful and immersive way, and they are better able to resolve any uncertainty about the nondigital attributes of the retailer’s products. Likewise, showrooms create better retailers: When customers are physically present in the retail environment, observation of their behaviors can lead to meaningful insights. Salespeople can anticipate and respond to customer needs, provide exceptional service, recommend additional items, look for signs of customer discomfort, and so on.”