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How consumers are holding back retail tech advances

Colin Neagle | June 3, 2014
The future of retail is here but many consumers are just not ready for it.

Rather than sitting idly by, retailers will need to prepare consumers before unleashing new technologies on them. For example, Amazon CEO Jeff Bezos announced the company's plans for an airborne drone-based delivery service in a 60 Minutes interview last December, while admitting that it could take as long as seven years for the company to launch the service. Bezos made this premature announcement for the same reason that Google introduced its Glass device to a limited group of hand-selected users years before releasing it to the public. Consumers need time to warm up to disruptive technology before realizing its benefits.

"What Bezos has done here that is so genius from a marketing standpoint is this: he's started the debate now, before he's even perfected the octocopter technology and before it's even legal, so that the public will start the long process of self-normalizing the concept of an octocopter in the first place," Will Burns, Founder & CEO of Ideasicle, wrote in a Forbes column in December.

Just as important as giving the market time to warm up to new technologies is giving businesses time to develop them. For example, retailers will have mountains of data to use to create highly personalized promotions for individual customers in the next few years. These personalized promotions should become more accurate as the data grows and the technology improves. Over time, consumers will grow to expect personalized promotions that advertise only the products they're likely to buy.

"The recipe for success is to have personalized and individualized down to segments of one, and those that aren't targeting segments of one won't be successful, because increasingly the population will be made up of more digital natives, and they will have had experience," Bauer says. "I think it'll turn off some consumers that don't receive that personalized attention."

Although a more tech-savvy customer base will be more willing to try out new technologies and services, these consumers will also have much higher expectations, and no shortage of social media to express their disappointments. In the future of retail, introducing a new technology that underestimates its users could be just as dangerous as investing in over-advanced technology today.

"They have a different expectation of a level of service that will allow those retailers who are willing to invest in those technology changes that we're talking about to really differentiate themselves," Bauer says. "So those retailers want to, in five to 10 years, to be successful, they're going to try to attract and retain the digital native and their behaviors."


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