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Prototyping Is the Real Future of Retail

Kathy Kirk

Managing Principal, Head of Retail Solutions, NA/APAC
  • Retail & Consumer

Like many industries, the retail sector isn’t immune to digital disruption and retailers are trying to navigate evolving customer demands and emerging technology innovation. The trends of online shopping, personalization and the need for omnichannel experiences are putting pressure on retailers to adapt their strategies to remain competitive.

According to Statista1, 10.2% of total global retail sales in 2017 came from eCommerce and this percentage is expected to increase to nearly 18% by 2021. And for millennials, this shift to digital is even greater. 67% of millennials shop online vs. in-store.2 While traditional retail will not be completely replaced by online shopping anytime soon, physical retail locations need to embrace digitalization and provide a seamless experience from in-store to digital. Mobile, social and conversational interfaces are not new, but they will continue to play a big role in purchasing decisions and retailers need to reimagine their in-store experiences to allow for these technologies. As consumers expect a customized experience instead of a one-size-fits-all approach to shopping, retailers need to be driven by data and leverage analytics to better understand their customers, products and channels to increase loyalty and revenue.

Keeping pace with all of these trends requires substantial time and resources to investigate, test, implement and measure their success. But when time is money, how do retailers adapt quickly without taking too many risks? The key is prototyping. Prototyping allows brands to expedite the rollout and testing of new digital offerings and innovative retail solutions to learn quickly and scale fast, achieve a higher rate of success and maximize ROI.

As we know, technology and consumer demands and preferences change constantly, forcing retail companies to be agile and innovate quickly both in-store and online. Prototyping enables retailers to test out different solutions, so they can learn from their mistakes, make changes and scale swiftly. Instead of investing in one time-consuming and costly solution, retailers should leverage an agile approach to develop different prototypes to minimize risks and discover new business models. Rapid prototyping can be applied to one solution to address a specific audience and their needs. Prototyping may also result in a complete change in business operations leading to a new product or out-of-the box approach.

Retailers can use prototyping in several different ways depending on their business goals:

  • Prototyping solutions that address the customer-facing side of commerce, such as front-end solutions, conversational interfaces or social media integration, allows retailers to test different ways of interacting with shoppers through physical retail solutions, web design or page layouts.
  • Prototyping business processes, like marketing campaigns to test personalization and target customer segments, allows retailers to analyze the success rate of tactics without changing the overall marketing strategy.
  • Customer data aggregation platforms could also be prototyped to determine the best way for retailers to bring together, centralize and analyze data to gain insights into customers, products and channels.
  • Prototyping back-end support services, like a third-party logistics service or a new digital platform, can help retailers determine how services impact costs and business processes.
  • Emerging technology solutions, such as facial recognition, augmented reality, IoT and big data solutions, can be prototyped to help retailers analyze whether these innovations impact the bottom line and increase customer loyalty. For example, one Chinese retailer recently leveraged facial recognition, digital ID verification and payment systems to create a car vending machine through the use of prototyping.

Ultimately to be successful, retailers need to keep the business goal of the prototype in mind when developing the concept. In doing so, prototyping can enable retailers to be innovative and respond to changing trends, technologies and customer demands to remain competitive and achieve faster time to market.




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