Retail: The Revolution Will Be PersonalizedBy: Tuck School of Business Communications Posted: Mar 4th, 2014
In the future, will we just buy everything in our lives from Amazon? Professor of Marketing Praveen Kopalle thinks we’ll still have brick and mortar stores, but more retailers will be taking a page from the innovative and analytical online world.
Pricing will be personal. In the future, Kopalle predicts prices will be personalized right down to the individual customer, and dynamic enough to change based on time, place, or person. The airline and hotel industries operate on this model, but soon more product categories will fluctuate in price based on supply and demand, or perhaps to incentivize you based on your geographic location. Harder to fathom now is that different people in the same time and place may pay different prices for the same item. Though the posted price might be the same, customers might, for example, be emailed coupons for differing discounts.
Analytics will rule. Kopalle says retailers have only scratched the very surface of the ways they can use statistics and analytics to understand customers. Gone will be the days of buyers doing guesswork on pricing. “These time, space, and people dynamics to prices are not randomly selected, but based on hard data and analytics,” he says. The cost of data storage has plummeted just as exponentially as computing power has increased. Managers are being trained on analytics more and more. Within a few decades, retailers may know our habits better than we know our own.
Loyalty will be rewarded. Today, customers will be fickle in order to get a better price. But as loyalty programs get sharper and smarter, Kopalle believes retailers will convince us of the value of our loyalty. “Going forward, consumers will realize that being loyal to the retailers and brands they like actually pays off in the long run,” he says.
The line between online and offline retailing will blur. Looking into the future, Kopalle sees the dawn of a same-day delivery of our online purchases as the norm, merging the online world and our geographic one. Bricks and mortar retail won’t disappear, but retailers will view online and offline spheres as complementary and blend them seamlessly.
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