Today, I spoke with Dr. Barbara Kahn who is the Patty and Jay H. Baker Professor, Professor of Marketing at Wharton. Dr. Kahn is publishing a new book this week which is “ The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption.”
Here are highlights and implications for the luxury industry from our interview today.
Luxury Daily Questions: What is the future of store based retail.
“Although there is no question that e-commerce and mobile commerce sales are increasing at a rapid pace, I don’t think any retail analysts would predict the end of physical store retailing. However, there is also no doubt that the store experiences will have to improve to meet rising customers’ expectations. In addition to improvements in physical merchandising and better inventory control, customers will demand better experiences in the stores. In luxury, I believe consumers will demand personalization and customization, and some sense of surprise and delight.”
Luxury Daily Questions: How do you define the experience within the four walls of the retail store.
“Customer experience can range from easy, convenient shopping, probably best exemplified in the U. S. by Amazon’s new Amazon Fresh stores with their “just walk out” technology, to luxurious, fun shopping like what one experiences at Eataly or luxury retailers, such as Louis Vuitton or Gucci. Store experiences can also be interactive either through state-of-the-art in-store technology, augmented reality displays, or just experienced and helpful sales associates. Great store experiences are also defined by our five senses—whereas online shopping can provide visual and audio components, only physical stores can add in enticing smells, tastes and tactile experiences.”
Luxury Daily Questions: What is the role of AI in retail.
“What we are seeing in modern retailing is a seamless integration across all channels, allowing the retailer to merge the purchase histories across these channels. These retailers are also increasing touchpoints with their customers. All of this allows them to collect “big data” on their customers’ shopping experiences. With this data, artificial intelligence or machine learning can begin to understand what drives shoppers’ purchases. This will allow retailers to improve the shopping experience and to personalize and customize to meet customer demands. It also helps with better inventory control.”