2020 has already triggered unprecedented agility and innovation from retailers, but the year’s greatest test comes as the holidays approach. Even the most reliable shopping patterns have transformed as consumers keep safety and convenience top of mind. Their holiday plans won’t look the same, but they’re still searching for ways to spread cheer.

Now is the time for retailers to keep up the momentum, combining learnings from the last seven months with real-time data to win over shoppers. To learn more, explore “Five Essential Consumer Insights for the 2020 Holiday Season.” Here are a few of this year’s big shifts in consumer shopping habits to help you navigate the season with confidence.

Online shopping soars

Earlier this year, retailers saw holiday-level traffic hit their websites. Consumers quickly showed that they were willing to embrace technology to shop safely, with a definitive shift to e-commerce.

While it’s not news that e-commerce is here to stay, the categories consumers shop has expanded greatly in the last six months.

The growing amount of time people have spent at home has also meant more time online for work, school, and social activities. The research shows that online shopping is becoming a more fluid part of their internet time. Retail search activity is growing twice as quickly outside of traditional business hours.

For the holidays, many people will be putting new twists on their traditions. Instead of traveling, sharing meals, and opening gifts together, consumers are more likely to celebrate at home, spreading cheer to their loved ones by sending gifts they buy online.

Holiday spikes in traffic are on the way, and the best way to prepare is by looking at the e-commerce solutions you rely on most. Will they be able to maintain fast load times and optimal performance when seasonal shopping surges? Technology is going to play a central role in every retailer’s success this season, and your web presence must give customers confidence that online shopping is simple, secure, and delightful.

More pickup is in store

Convenience has had a new meaning ever since health concerns changed shopping behavior. Consumers still want shopping to be fast and easy, but now they’re often looking for ways to minimize human contact. “Buy online, pick up in-store” (BOPIS) options have become practically ubiquitous as a result. Retailers of all sizes offer BOPIS, and in return, consumers are using it for an ever-expanding list of categories.

There’s been a continued desire for contactless interactions with retailers, and it’s a habitual behavior that will likely continue through the holidays and beyond. The most important thing retailers can do to prepare is to make the transition between online shopping and in-person order pickup feel completely seamless, regardless of device or platform. When customers start an interaction online, they want to finish it online. They don’t necessarily want to call to let staff know they’ve arrived for pickup.

Personalization cuts through the competition

As consumers shop online more, they’re being marketed to more. With the submission of their contact information comes a wave of emails, targeted ads, and more—not just from your business, but from every retailer they shop. The holidays turn up the volume on promotional intensity, and it’s only a matter of time before consumers start tuning it out.

That’s why shoppers are drawn to experiences that feel personal. Whether they’re shopping for gifts or preparing their homes for the holidays, consumers are favoring brands that can make recommendations that are relevant to their historical buying patterns and seasonal needs.

The holidays are also a time when customers buy things they don’t usually buy. Retailers need to make sure that discoverability and convenience converge perfectly to help them find something new. The key to cutting through the noise of holiday promotions is to use real-time data and curation to simplify and personalize the gift-shopping experience.

Reach customers of every age

Broader trends show that each generation has adapted their shopping in different ways, challenging retailers to cater to a range of tech skills and preferences.

Baby boomers, for instance, make up the single largest group of shoppers, and many of them are putting aside their doubts about security to shop online for the first time. On the opposite end of the spectrum is Generation Z, whose members grew up with devices in-hand and crave online interactions that merge the social, the experiential, and the shoppable.

Understanding and tapping into the unique expectations of each generation is a crucial way to develop trust with the growing e-commerce audience. It’s a keystone in the effort to earn holiday sales now and gain long-term loyalty that keeps consumers coming back.

A supply chain as agile as demand

Each holiday season brings a new list of hot gifts that fly off the shelves, but after watching everything from toilet paper to puzzles go out of stock this spring, consumers are looking at gift shopping a little differently.

It used to be that you could shop around and come back to make a purchase later. Now there’s a mentality that once it’s gone, it’s gone. Shoppers are going to be more decisive so they get their items as soon as possible.

Some shoppers will kick-start their searches earlier than usual, motivated by the fear of missing out. They’re planning ahead to make sure they get exactly what they’re looking for, exactly on time. Others are trusting that fast and free shipping will give them the flexibility to buy gifts when they’re in stock—even at the last minute.

Together, these different approaches make it clear that having an agile supply chain can help retailers stay stocked during an extended and atypical shopping season.

More data, fewer surprises

Although 2020 has been unprecedented at the best of times, there are smart investments that can help any retailer find success. The next normal is taking shape right before our eyes, and each of these core retail areas will continue to be key in meeting customers’ expectations during the holidays and beyond.

With the right data and technology on your side, your business can keep navigating change with confidence. That’s why we’ve combined exclusive Bing search data with top industry insights to help you prepare for the season ahead.

To learn more, explore “Five Essential Consumer Insights for the 2020 Holiday Season.”

Get started today with the support of an onboarding specialist for a coupon valued at $100 when you spend $25 on Microsoft Advertising.

The post Holiday 2020: Five consumer habits that are transforming retail appeared first on Microsoft Industry Blogs.

Eighty percent of consumer goods CEOs think their operating model is at risk.¹ Why is that? Simply put, given how fast consumer preferences and the retail landscape are evolving, consumer goods businesses are being challenged to keep pace like never before.

Consumer motivations and expectations are rapidly evolving. Good for me and good for the planet is high on the buying agenda. Sustainability really matters to consumers and they want to be part of the solution. For example, 73 percent of millennials are willing to pay more for sustainably produced products.² As the head of a CG company, you must look at your end-to-end manufacturing and product lifecycle process, and find ways to reduce waste and improve overall product sustainability. Digital technology can empower your consumer goods company to take control, increase product traceability, and measure the entire product lifecycle, helping to reduce a company’s carbon emissions. The time is now to adopt an intelligent and sustainable operating model to enable doing good while improving growth.

We at Microsoft understand that knowing where to start on your digital transformation journey may feel overwhelming, but that’s why we’re here.

1. Optimize brand performance—Make every marketing dollar count. The better you understand your brand performance and consumers’ behavior, and what’s working in your marketing campaigns, the better ROI you can drive from your marketing spend.
2. Deliver sustainable and operational excellence—Find efficiencies across your operating model to become more agile and green. Eliminate waste and meet demand with precision.
3. Create a connected enterprise—Empower your ecosystem with digital tools to enhance connectivity and productivity, and to deliver world-class retail execution.
   For example, transform in-store merchandising and auditing to improve business processes so you can optimize the time your reps and merchandisers spend in trade.
4. Accelerate innovation—Go beyond the norms of innovation to find new ways to delight and engage your consumers and shoppers. Forward-thinking brands are going beyond the usual innovate of a new product, pack and price, and thinking about how they can use technology to bring their brand to life at the point of purchase.

Check out these five things you can do right now to better understand your customers and where your technology fits in to gain an edge over your competition. Read the 5 Ways to Outsmart Your Consumer Goods Competition e-book and kick start your digital transformation journey.

¹ “Agile in the consumer-goods industry: The transformation of the brand manager,” McKinsey & Co., 2019.

² “Consumer-Goods’ Brands That Demonstrate Commitment to Sustainability Outperform Those That Don’t,” Nielsen, 2015.

The post Winning the modern-day consumer in the world of consumer goods appeared first on Microsoft Industry Blogs.

In our digital world, there are no boundaries to creativity and innovation that can improve your customer’s experience or provide new income streams. Every touch point of the shopping experience—store space, shelving, displays, packaging, shopping bags, websites, and other digital assets—has unrealized potential. Dream it, then make it happen.

• What if your customers could try on products by simply looking in a mirror?
• Could you sell advertising space on your shelves for related services?
• How about a virtual shopping assistant app to help customers locate items?

Innovation is the key to differentiating your brand from competitors. Don’t get stuck in pre-digital thinking. Every successful retailer puts customers first, but the amount of data available and the strength of data analysis can reveal opportunities in ways that weren’t possible even a few years ago. And shoppers have changed, too.

Gen Z shoppers especially present carefully curated images of themselves. Does this product align with my beliefs as far as its origins? Does this brand stand for what I stand for? Does this item fit the “me” I want to be? These are questions your brand needs to answer—in a consistent and compelling way across all your channels—in order to attract these customers.

We’ve created an executive brief with more in-depth information about reimagining retail, and how technology fits in. Check it out, and start exploring ways to innovate in your business.

You may also be interested in Insights for the savvy retail leader, where you can gather expert retail insights to evolve your business and learn from the success of others.

The post Think outside the retail box (and bag and cart) appeared first on Microsoft Industry Blogs.

It’s an exciting time to be in retail. Challenging? Certainly. But also rife with opportunity. Online retailers are opening brick and mortar locations. Traditional retailers are repurposing shelves for advertising revenue. If you can dream it, you can try it.

Technology is driving new business models, extracting more revenue from existing ones, and turning retailers into innovators. Agile principles that began in the software industry have taken widespread hold across the business world. The idea is to deliver an experience, collect feedback from customers, and iterate often toward continuous improvement. No business can afford to sit still while competitors try new approaches, create new brand territories, adjust to customer feedback, and evolve into market leaders.

To help you along the journey, we’ve curated some of the most impactful thinking and results in the retail industry into an interactive experience where you can gather the best ideas for your needs. Insights for the Savvy Retailer gives you options to filter content by areas of retail transformation, generational audience targets, and retail types, then collect insights for your own complimentary report.

To succeed, you need to:

• Know your customers, then deliver personalized and relevant customer experiences to increase their loyalty.
• Empower your people by creating a modern workplace that streamlines routine tasks and allows everyone to focus on customer experiences.
• Create an intelligent supply chain by optimizing operations with intelligent processes that improve efficiency and agility.
• Reimagine retail by taking advantage of intelligent infrastructure to discover creative opportunities and reinvent your business.

Retail still rules. You can evolve your business and learn from the success of others. Check out Insights for the Savvy Retail Leader, and start gathering expert retail insights.

The post Retail insights pave the way for impactful customer experiences appeared first on Microsoft Industry Blogs.

The global demand for luxury goods is strong and rapidly growing. It feels like buying a luxury handbag these days is as common as upgrading your electric toothbrush! But what is the big attraction? The soft leather, the unique designs, the beautiful detailing? Or is it something else?

“Luxury equals status, and status is based on exclusivity,” says Retail Prophet founder, Doug Stephens. “It’s having things that other people don’t have. That is fundamentally the nature of luxury.”

Yet luxury products are far more available in the past 10 or so years than ever before, promoted by celebrities and self-made influencers on Instagram. A decade ago, during the great recession, many luxury brands reached outside of their traditional target markets to attract the growing middle classes in China and around the world. At the same time, luxury has gone online in a big way. A recent study conducted by Microsoft and McKinsey found that more than 80 percent of luxury sales have been influenced by digital, whether it’s via search, influencer recommendations, or the purchase itself.

But the concept of luxury is about to change. Again. In part, this is due to the faltering Chinese economy and prices of everyday products and services rising worldwide.

“Luxury brands have to reckon with the idea that the gas might be coming out of that engine,” Stephens says.

But the nature of purchasing is changing, especially among younger consumers. Where a generation ago status might have been based upon what you kept in your garage, “fundamentally you’re dealing with a generation where social currency isn’t so much what you own, but who you’re with,” according to Stephens.

A new world in luxury retailing, therefore, takes the focus from a product and puts it into an experience. Access to the experience, which may be a live webcast or event, could be limited. That adds a level of exclusivity and that FOMO, the fear of missing out.

It’s “not just about getting a handbag or a certain watch, but being a part of something that is happening live,” Stephens says.
So how does a luxury retailer keep its customers engaged?

“FOMO is really the new promo,” Stephens says. “We can capitalize as retailers on this desire of young consumers to want to be a part of something that is very exclusive and limited in nature.”

Stephens believes the next iteration of luxury will be about freedom:  “It’s going to be a more day-to-day thing. Do I live close to the place that I work,” he says. “Do I have the freedom to travel when I want to? Can I go places? Can I work abroad? And do I have the freedom to be offline when I want to be offline?”

If you think about it, luxury brands are already leaps and bounds ahead of their rivals. They do better than more mainstream brands by creating that FOMO, by having very clear campaigns that are all about living and showcasing that luxury brand experience.

So what’s the opportunity for a retailer? “We think the opportunity is to extend the brand to the bigger idea of what luxury is all about,“ Stephens says.

That could mean a company like LVMH, which manufactures fine spirits, opening a chain of hotels. The idea, Stephens says, is to capitalize on self-actualization or freedom. Pass the Champagne!

To learn more about how you can reimagine your retail experience, watch the on-demand webinar The Five Most Important Decisions Facing Today’s Retail CEOs, which Stephens shares these insights and more on the changing trends in retail.

The post The next generation of luxury retail appeared first on Microsoft Industry Blogs.

Retailers targeting millennials have had to rethink everything they know about sales. As a general cohort, this demographic between the ages of 18 and 35 has, overall, significantly less income, much greater student and consumer debt, and far higher demands for a positive experience than previous generations. Home ownership is often out of grasp, many don’t—and don’t even want to—own a car, and far more would prefer to spend that money on life experiences and events rather than products.

“That’s a really important callout for the retail industry,” says Retail Prophet founder, Doug Stephens in his webinar The Five Most Important Decisions Facing Today’s Retail CEOs. “Retail has always been very much product-led, experience second. Experience was sort of a garnish when you were buying a product.”

Then, of course, there’s the mobile experience. For a generation that lives on its phone, they want that mobile experience to be first and foremost.

“The most affluent millennials spend the most time online, hence the importance and critical nature of making sure that your online game, and in particular our mobile game as a retailer, is on point,” Stephens says.

So what’s a retailer to do?

For one, make the experience a part of the purchase. Stephens says the products should then just come along for the ride. He cites how Ikea, historically known for its massive warehouse showrooms in suburban areas, is now creating smaller design studios in urban centers—also in part because more millennials are happier living in cities than previous generations.

Another thing retailers can do is be more transparent about business practices. 66 percent of consumers are willing to pay more for sustainable brands.  This is changing the way retailers need to think and approach what they’re doing. Millennials expect companies to be socially and environmentally responsible. From Microsoft’s perspective, that means supply chain retailers really need to start thinking about sustainability within the supply chain and manufacturing processes, which will ensure they are one step ahead of the game.

And millennials will be more likely to choose a company that pays and treats its employees well.

“Now, with the kind of forums we have online and with social media, certainly these issues are coming right to the surface,” Stephens says. “It’s a primary concern on the part of millennial consumers.”

Finally, millennials are willing to trade their privacy and spend their social capital—if they get something in return. That could manifest itself through better customer experience or an exclusive offer, for example. Personalization and retailers who know their customers through various forms of technology also add to brand loyalty, which is ultimately what will drive more revenue for retailers.

To learn more about how you can reimagine your retail experience, watch the on-demand webinar The Five Most Important Decisions Facing Today’s Retail CEOs, which Stephens shares these insights and more on the changing trends in retail.

The post How millennials have changed the retail landscape appeared first on Microsoft Industry Blogs.

Four out of five customers who walk into a store often know nearly everything about the products they intend to buy. It makes sense, then, that the person guiding them through the purchase process should be just as knowledgeable, says Retail Prophet founder Doug Stephens.

Stephens, who hosted the webinar “The Five Most Important Decisions Facing Today’s Retail CEOs” digs deep into the complex relationship that has begun to emerge between employee and customer.

“They want people who are dynamic problem solvers, people that are fundamentally equipped to add value to their experience, and make that experience much, much more expeditious and frictionless,” Stephens says of consumers. “Retailers are coming to recognize that the days of the low-level or entry-level frontline clerk are over.”

This means employees must know enough to provide guidance on products and their availability. If you think about it, there’s no longer any excuse whatsoever for bad products or a bad experience. That’s a real miss for a retailer. If they can’t arm their associates with the same data and knowledge as their consumers, it’s going to result in a poor customer experience.

So what does an empowered employee look like? First, it’s passion for the product.

“There’s really more of a defined position around being a brand ambassador,” Stephens says. “People who are product fanatics who love what they sell and love talking to other people about those products.”

But also, Stephens adds, it’s about making sure an employee is “equipped to solve the consumer’s problem and is empowered to do so by the organization that they work for.”

An associate could offer discounts, promotions, or a range of other options that works for consumer, employee and retailer alike. When you’ve got happy employees, you’ve got happy customers.

But don’t just empower employees with data—make sure the communication flow throughout the company really is seamless and integrated. They need to have the passion to deliver a great customer experience.

Also, Stephens says, decent pay and other perks are important, but career growth and opportunity, especially through training and education, are equally so. Given that we’re hardly separated from our phones, mobile training is perfect not just for education, but for onboarding. Think micro-learning, “breaking bigger topics up into smaller modules that people can tackle on the go.”

Also, in an era when it appears that the gap has widened between the shop floor and the executive levels, Stephens suggests adopting methodologies to help associates advance.

“The rungs of the ladder to the corner office seem to be going away,” Stephens says. “Organizations need to be finding new ways helping them to grow.”

Finally, stores should improve the relationship between associate and customer using loyalty programs that help an employee know an individual’s preferences to personalize the experience—preferably right when the customer enters the store.

Every employee at British retailer Marks & Spencer, for example, is digitally connected and always knows what’s happening in the store. Customer feedback from the sales floor, whether it’s about a product or experience, all goes right to the head office to allow them to act in a more agile manner.

That’s one way to make the customer feel appreciated in today’s fickle retail environment.

To learn more about how you can reimagine your retail experience, watch the on-demand webinar The Five Most Important Decisions Facing Today’s Retail CEOs which Stephens shares these insights and more on the changing trends in retail.

The post How to empower today’s retail employees appeared first on Microsoft Industry Blogs.

Think of your retail store not as racks and shelves, maximizing every square inch to hold product after product, but as a service—a way to build an experience, each product a character in a larger story that uses intelligent technologies to help guide the way.

“Generally speaking, we’re talking about a number of different services being offered to these digitally native brands, whether that’s brand curation, making sure that the right brand adjacencies are put together in a given space,” according to Retail Prophet Doug Stephens. “Staffing and training is provided, marketing and event management. Many offer platforms to retail partners as well, and give awareness of foot traffic throughout the space, and demographics.”

Think of it this way: consumers now research, shop and order online. That is what has forced this rethinking of the retail floor. And with this new-found power the consumer has, retailers must think about their business in terms of their changing priorities.

[msce_cta layout=”image_center” align=”center” linktype=”blue” imageurl=”http://approjects.co.za/?big=en-us/industry/blog/wp-content/uploads/2019/05/Industry-Refresh-V3_Retail_R1-_B_Blog.png” linkurl=”https://info.microsoft.com/ww-ondemand-The-Five-Most-Important-Decisions-Facing-Todays-Retail-CEOs.html” linktext=”register for the on demand webinar now” imageid=”32835″ ][/msce_cta]

That increases the challenge for stores that maintain a brick-and-mortar presence. Stephens refers to stores like Beta and Story NYC that have taken the lead on this emerging trend, which seeks to give context to a product and provide an experience in how the product might be used. Sales staff are trained to familiarize themselves with each product so they can educate their customers.

In addition, according to Stephens, this new breed of retail store helps emerging companies by giving them “a significant amount of intelligence on who is interacting with their brands,” he says. “We’re seeing a real explosion in this space and to me it really marks a transition in the retail industry.”

One way Stephens notes this transition is in how the stores redefine space and audience. At Plano, Texas-based Neighborhood Goods, founder Matt Alexander curates each product to relate to one another, and holds events so customers can experience the intent of each product’s creator. He will have only about 15 brands in the store at any given time.

Neighborhood Goods has, in essence, exchanged the traditional sales floor employee with limited knowledge of a lot of products to an events manager and a curator who knows the smallest details of a very limited number of products.

So is it working? Having a store act as a showroom does appear to be having an effect. Stephens says that people aren’t shopping less. They’re just shopping differently. Still, from the store’s perspective, it’s a risky proposition—the partner company could run out of funding and shut down, or could expose the store to credit worthiness issues, plus the upfront capital required to have the necessary technologies in place to enable purchases and collect data—but the returns can be worth the risk.

To respond to such possible issues, Microsoft partnered with Sunrise Technology, which is adding digital services to dead shelf space in Kroger supermarkets. These small screens offer advertising and dynamic pricing that can draw in customers and, at the same time, provide another source of revenue for retailers.

Thanks to technology, not only does this moribund space come alive, it also adds to a level of experience and engagement for a customer to give them an even better shopping experience.

The strategy can work at a smaller scale as well. You can find dynamic digital displays with nearly every product at Beta, for example. Macy’s, which has taken a stake in the Palo Alto-based company, has opened its own Market@Macy’s in 12 of its stores to gather analytics and provide the same type of curated product experience.

To learn more about how you can reimagine your retail experience, watch the on-demand webinar The Five Most Important Decisions Facing Today’s Retail CEOs, which Stephens shares these insights and more on the changing trends in retail.

The post Your store is no longer a store, but retail as a service appeared first on Microsoft Industry Blogs.