Retail has endured a turbulent time. The past decades have seen a painful shift from traditional brick-and-mortar to the online shopping experience. Driven in no small extent by a desire for instant gratification; tech-native Millennials have demanded personalization, speed, and frictionless online shopping experiences. And while this has fueled innovation and the development of mobile, web and IoT technologies, it has also seen the closure of retail stores and malls dominate the headlines.

But retail is evolving, and all indications are that the next generation will breathe new life into brick-and-mortar stores. A recent study by IBM and the National Retail Federation found that despite living a digital life, 67% of more than 15,000 Generation Z (born after the mid-1990’s till early 2000s) prefer to shop in physical stores, with 31% of respondents shopping in-store ‘sometimes’.

However, this emerging generation has never known a world without cell phones and digitally-driven consumers expect digitally-driven experiences. Furthermore, tech-savvy consumers are increasingly taking to social media to share, shape and engage in dialogue about exciting new experiences. This is where retail has the opportunity to adapt.

The next-gen shopper experience

The next-gen shopper expects to walk into an experience, not a store. An experience that combines IoT, location awareness, and mobile technologies. This creates intuitive, relevant and engaging experiences – like the interactive fitting room.

Once inside the cubicle, IoT devices take a customer’s measurements. AI technologies match in-store merchandise with the brands and styles the person likes on their social media channels – or through on-site discovery. An interactive mirror displays the results. This allows the shopper to swipe, select and request the items they want to try on. Once they have chosen the products they want, the shopper can self-checkout. They do so by swiping their mobile payment device against the mirror. Then they can collect their purchases on the way out the store – or have them delivered.

The shopping experience will include IoT-based solutions

Using IoT to improve the shopping experience goes beyond just creating experiences like the interactive fitting room. It includes a growing number of behind-the-scenes IoT-based solutions. For example, malls like Westfield are using ‘Face Detection’ to improve shopper experiences. As outlined in the Westfield is using facial detection software to watch how you shop article, Westfield’s ‘Smartscreen Network’ can determine shopper attributes such as age, gender and even the mood of the shopper. A company spokeswoman explains “Our intention with any data that we collect is to be able to better understand our customers’ needs, and connect with them in a more meaningful way.” When you consider the power of knowing demographic profiles in tandem with shoppers’ mood profiles, it leaves a lot of space to create powerful changes in the shopping center once this data is aggregated and analyzed to reveal common patterns and trends.

A missing link, until recently, has been the ability to add location trends of shoppers throughout their journey. Traditionally, malls have used standard traffic counting technology to understand their footfall statistics. While helpful, tracking shoppers using their mobile devices connected to indoor mapping and positioning technologies opens a new world of use cases and value for shoppers. Having a location infrastructure and addressable indoor maps are a key foundational layer to the IoT in malls. When combined, shoppers are given a better experience with turn-by-turn wayfinding. And retailers are granted access to valuable data like the shopper’s journey (aka cookie crumble path through the mall), dwell times, and the actual outcome of a shoppers’ reaction to in-mall advertising.

The importance of building a solid data foundation

The most significant challenge retailers face in creating this kind of hyper-personalized, real-time shopping experience is a solid data foundation. A study conducted by Zebra identified that 77% of retailers saw investing in big data solutions for storing and analyzing IoT-generated data as essential or business-critical to their operations.

The foundation for any future retail experience capability must rest on a trusted information layer. This layer provides high-quality data that can support the decision-making process. Retailers need a converged data platform capable of ingesting all kinds of data from multiple sources – IoT, sales data, customer footfall, mobile data, website traffic, social media – into a single fast, efficient and scalable platform. A platform that gives retailers the ability to:

• Understand the data they have and the data they need to develop or collect;
• Organize data by streamlining and integrating data in the cloud, data lakes, and other emerging data storage and integration technologies;
• Build trust in data, ensuring it is transparent and secure, with good governance, data quality and data cleansing in place.

Using data to deliver the next-gen shopping experience

Millenials and Gen Z share one thing in common: they want a personalized experience. Retailers who manage to create a solid data foundation – a single source of truth – will be able to take advantage of:

• Hyper-personalization – The ability to develop a 360 view of a customer. This allows retailers to serve up customized content, products, or promotions based on the preferences and shopping behaviors – online or in-store.
• Predictive analytics – The ability to predict what a customer wants and even alter the experience around the customer to change products and placement.
• Pricing optimization – The ability to adjust price based on customer behavior. For example, the customer may be likely to pay more if a product has a particular feature.
• Delivering a true omni-channel experience – A solid data foundation will help retailers ensure that all channels have the same customer information to draw from all the time.
• A real-time supply chain – IoT, analytics, and big data are already helping retailers. The combination of AI and a solid data foundation could dramatically improve supply chain optimization and feed directly into more personalized customer experiences.
• Operational efficiencies – In addition to enhancing the consumer experience, platforms that generate insights from business data will enable retailers to realize cost-savings by more effectively tracking and managing resources, utilities, and path-flow at their properties.

What does the future hold?

In the future, retailers will increasingly turn to innovative technologies to help understand shopping preferences. This includes identifying purchasing patterns and trends, and automatically showcasing items and goods based on personal taste. Retailers will need to harness and interpret the vast quantities of consumer information generated. This will the basis of the next-gen shopping experience. Those who ignore the need for a solid data foundation do so at the risk of becoming the next headline.

This article was written by Chris Wiegand and was originally published on IBM’s blog here.