Retail’s top 5 tech investments right now

Every year, Brendan Witcher looks at top buzzwords and then sits down with retailers to ask what they’re planning to launch — and why. Witcher, vice president and principal analyst with Forrester Research, took the stage at NRFtech to talk about where retailers are focusing their tech investments. They’re looking for tech that solves specific pain points, he said, and deferring investments that are too far ahead of customers.

“Customers don’t expect things they don’t experience yet,” Witcher said. “If you see the entire market starting to do certain things, that’s where customer expectations will start to be set.”

Next-gen personalization

What’s old is what’s new, Witcher said — the trick is to innovate what’s already been done to create something new. “We are moving to a state of individualization, creating individualized experiences for customers. That’s how you win them today.” He pointed to lingerie brand True & Co., which asks customers why they are returning items — is it the fabric? The fit? The texture? — and then suppresses similar products on the website, even if they’re higher margin.

“Data is the new competitive weapon."

Brendan Witcher
Forrester Research

Omnichannel commerce

It’s more than just buy online, pick up in store — engagement, fulfillment, product and price all sit on an omnichannel view, Witcher said, but they must be addressed separately; they each have different stakeholders, different technology and different strategies. “If this is not your omnichannel strategy, it’s not complete,” he said. And it’s becoming more and more popular — Witcher noted that Walmart’s main message the past two holiday seasons revolved around BOPIS: 14 percent of consumers use BOPIS every time it’s offered, he said.

Advanced data analytics

“Data is the new competitive weapon,” he said. “Data is what people are using to understand their customer better.” The key is context — it’s not enough to know age, gender and ZIP code. Retailers must understand their customers at the individual level. Athleisure brand Fabletics, he said, asks customers to log in with their email address when entering fitting rooms and scan the products they’re bringing in — building a customer journey that both adds value and helps the company collect data.

Digital store experiences and operations

Consumers are hyper-stimulated — everything is a game these days, and retail is no exception. “Shopping isn’t fun anymore,” Witcher said. “Customers want stars, levels, avatars — they want it to be exciting.” Retailers must tap into that sentiment, creating a space to both transact and interact. Sephora puts digital at the heart of the in-store experience, he said. “They stimulate the customer, they interact with them.”

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Artificial intelligence

While AI was much lower on the list last year, Witcher noted that it’s part of an entire system. “If you’re going to get into AI, you better be ready to get into AI,” he said. “Make sure the juice is worth the squeeze.” He sees the most opportunities in operational AI, rather than customer-facing — things like labor, warehousing and business intelligence. Coca-Cola uses AI to restock vending machines; the system can take a picture of the machine and sense what needs to be restocked.

Despite all the innovations in technology he discussed, Witcher reminded attendees of the importance of company culture and organization. “If you have a road map for technology, you need a road map for your culture that addresses your organizational challenges,” he said. “Don’t just talk about it. Make a plan for it.”

For more stories and session recaps from NRFtech, visit the official recap page.