ICSC RECon 2019: Day 3 Insights
The Coresight Research team is in Las Vegas this week, attending and participating in the International Council of Shopping Centers (ICSC) 2019 RECon event, running May 19-22.
- We continue to see the gamification of retail, as consumers respond more positively to interactive experiences.
- We heard a lot more conversation about partnerships – and for the first time we’ve heard landlords and retailers talking about teaming up with competitors.
- AI is transforming retail in so many areas, from logistics to demand forecasting.
On Day 3 of RECon, Tuesday May 21, Coresight Research CEO and Founder Deborah Weinswig caught up with James Cook, Americas Director of Research, Retail with JLL for a segment of Cook’s podcast series Where We Buy about trends in retail, what stood out at this year’s RECon and what the future of retail looks like.
These are some of the highlights.
The gamification of retail
We continue to see the gamification of retail, as consumers respond more positively to interactive experiences and retailers seek to create new or strengthen existing relationships using tools to engage customers.
China is setting the tone. China-based online retailing giant Alibaba created the Singles’ Day shopping festival that has grown so quickly it now eclipses Black Friday and Amazon Prime Day. Last year, Amazon Prime Day generated an estimated $4.2 billion in sales in 36 hours. Alibaba’s Singles Day generated $30.8 billion in just 24 hours. Alibaba amplifies the impact of Singles’ Day by making the experience as interactive as possible, including with a celebrity-studded televised gala.
Tencent’s WeChat app is another example. WeChat is a Chinese social media app that combines features of Facebook, YouTube, WhatsApp and Skype all into one.
And the app incorporates mini programs, too: Retailers can create their own branded apps that operate within the WeChat platform. Customers can browse products, see reviews, shop, pay and post on social media – all within one app.
WeChat has also expanded the use of “red packets” — small red envelops with cash people give away during the Lunar New Year — by creating a digital version: Now, instead of finding and folding a crisp new bill and placing it neatly into a small red envelop, users can send a digital “red packet” which recipients cash by putting the money into their WeChat Pay account.
What started as a holiday tradition around the Lunar New Year is now spreading into other areas not directly related to a specific holiday.
Retailers have gamified this process by, for example, offering a red packet with a certain amount of money in it and the first few hundred people who open it get a randomly determined amount until the full value is used. This not only attracts and engages consumers, it does so within a social media platform people can use to tell their friends and followers – and shop.
Digital natives get physical
At this year’s RECon, we heard a lot more conversation about partnerships – and for the first time we’ve heard landlords and retailers talking about teaming up with competitors. For example, we’re seeing landlords and traditional brick-and-mortar stores teaming up with digitally native brands to create unique shopping experiences. Physical retail is embracing rotating pop-ups for digital platforms.
This is a win-win: Digital natives are coming to realize that a physical presence is key to success, but most have little understanding of how to manage physical space, let alone contend with long-term leases and other fixed costs. Traditional brick-and-mortar shops and malls working with digital pop-ups and installations benefit from a steadily changing experience that can encourage shoppers to keep coming back.
AI will transform the shopping experience
AI is transforming retail in so many areas, from logistics to demand forecasting.
For example, facial recognition software can identify customers as they enter the store, and if the shopper’s profile contains enough information, the system can make product recommendations that go far beyond the “you might also like” suggestions that simply match products other customers have also bought. Shoppers on a low-sodium diet can get recommendations for products low in salt, or people on low-sugar diets can find keto-friendly foods. As we see healthcare cross increasingly into the retail space, such as CVS’s acquisition of Aetna, the potential benefits to both consumer and retailer will expand.
AI can also speed product design, slashing the time needed to get new concepts from design board to shop floor. As we recently noted, AI is becoming the preeminent technology in retail.