THE

FUTURE
OF

RETA I L 2017
Transformation Strategies For
Customer-First Business
@PSFK | #FutureofRetail
 @PSFK
Get The Full Report #FutureofRetail

The PSFK Future of Retail Report highlights the ten steps retailers and
brands must take to create a customer-first organization that can meet
and exceed the expectations of shoppers, day-in and day-out. The 7th
edition of PSFKs annual report provides an in-depth analysis of the
retail landscape with actionable strategies for effective retail planning
that can transform an organization for both customers and shareholders.
Get the full report for:

A roadmap of strategies for customer-first business transformation

Actionable insights to guide investment and operation of in-store technologies

60+ examples of retail innovation

Key takeaways and actionable strategies for employee training, retail

technology implementation and responsive supply chain management

Exclusive interviews, insights and statistical support from leading retail

experts at Walmart, Rent The Runway and others

Download the Full Report at: psfk.com/future-of-retail

Access all Reports and Debriefs as a PSFK Member: psfk.com/membership
Transformation
While every organization likes to think they strive to embrace a
customer-first philosophy, a plethora of legacy systems and
organizational behaviors build up over time that reconfigure

Strategies For the corporation and prohibit the dynamic behavior that
emerging brands and retailers display today.

Customer-First This survey offers a framework that affects the whole

organization - because success needs to be everyone's job. The

Business Future of Retail 2017 report is our most strategic to date

because we believe that a fresh approach is critical for, at the
very least, survival today. If retailers and brands are to build off
of their legacy, adapt to the market changes and thrive, they
need to see their shopper strategy as their business strategy
and their customers as their shareholders.

It's not that we need to throw away the stores, the sites and the
widgets that we have amassed and start afresh. However, we
do need to take a step back and work out how these tools and
assets can be leveraged as we transform our businesses to
deliver a customer-first strategy that differentiates us from the
market and adds extreme value in the eyes of our customers.

I wish you the best of luck remember that we're here to help
if you ever need us.

Piers Fawkes
Founder, PSFK
@PSFK
Download the Full Report at: psfk.com/future-of-retail #FutureofRetail
LABS
Technology Investments To Improve Shopper Experience

Mobile Devices Data Analytics Cloud Connectivity

Digital Payments Sensors & IoT AI & Voice Recognition

Robotics &
Wearables VR/AR
Automated Systems
Adapting Retail Systems To New Customer Expectations
CROSS-CHANNEL
RETAIL UBIQUITY
CONSISTENCY
83%
of global customers check
multiple screens at once; they
67%
of US customers expect retailers to
have a consistent view of them as a
customer both from online and in-
use, on average, 2.23 devices
store purchase histories.
at the same time.
Rethinking Retail Study. Infosys, 2015
State of Content Report. Adobe, 2015
1in5 US customers use
mobile devices to
75%
of US and UK customers are more
likely to purchase from a retailer
assist their in-store that knows them by name,
shopping experience. remembers their purchase history,
or recommends products based
Bizrate Insights, 2016 on previous purchases.
Personalization Pulse Check.
Accenture Interactive, 2016
PROMPT &
PERSONALIZED SERVICE
75%
of online customers expect to
receive personalized assistance
within 5 minutes.
Customer Experience: Creating
Value Through Transforming
Customer Journeys. McKinsey &
Company, 2016
85%
of customers would abandon a
purchase and leave a store if they
do not receive prompt service.
State of Retail. TimeTrade, 2016
EXPERT ADVICE
40%
of global customers say that
sales associates with a deep
knowledge of the product
range greatly improve in-store
shopping experience.
Total Retail Survey. PwC, 2016
83%
of global customers prefer
dealing with human beings
over digital channels to solve
customer service issues.
Digital Disconnect In
Customer Engagement.
@PSFK
Accenture Strategy, 2016
#FutureofRetail
LABS
ROIs For A Customer-First Company
Nurtures The
Customer Base
52 %
of US digital customers have
switched between brands due
to poor service; the estimated
cost of customer switching due
to poor service is $1.6 trillion.
Digital Disconnect In Customer
Engagement. Accenture Strategy, 2016
56 % Differentiate From
of retailers say in-store
technologies help them
acquire or maintain
customers. 47% say it
improves the customer
experience.
The Retail Store In 2016: Poised For
Transformation. Research Systems
Research, 2016
Commands A Premium
For Products
45 %
of consumers globally are
willing to pay more for a
better retail experience.
Digital Disconnect In Customer
Engagement. Accenture
Strategy, 2016
Competitors
89
%
of brands expect customer
experience to be their primary
differentiator by 2017.
Insights: Customer Experience.
Gartner For Marketers, 2016
Grows The Bottom Line
90 %
of retail managers believe data-
driven decision making has the
ability to improve sales, while
62% believe it can improve sales
by 20% or more.
Digital Disconnect In Customer
Engagement. Accenture Strategy, 2016
Organizations that invest
above the industry average in
customer data and analytics
outpace competitors
2-3x
on margins, sales and profits.
Harvard Business Review, 2015
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#FutureofRetail
LABS
Major Shifts Defining Customer-First Business
Customer Service VIP Customer

Sales Associates Product Experts

Out Of Stock Always Available

Information Silos Knowledge Networks

Intuition-Led Data-Driven

Retail Transactions Brand Relationships

Bottom Line Consumer-First

Foundations For
The Customer-
First Business
RESPONSIVE PERFORMANCE
OPERATIONS TECHNOLOGY

EMPOWERED
FRONTLINE
EMPOWERED
FRONTLINE
TRENDS
Developing a frontline workforce
that is knowledgeable and 1. Immersive Training
passionate about its products, and 2. Networked-Knowledge Exchange
empowered to solve problems.
3. Associate Advocates
01 Immersive Training
Instating experience-first
education programs that
prepare associates for on-
the-job problem solving.
We make sure that the associate is
knowledgeable with a brand or a product to
the point where if a customer comes in
asking for something, that person has the
credibility, knowledge and passion to fuel
the purchase.
Diego Nunez. Senior Director Of Digital Marketing And E-commerce,
Skullcandy

@PSFK
#FutureofRetail
LABS
01 Immersive Training

Walmart
In-Store Training
Academies Offer Lessons
On The Sales Floor

walmart.com

@PSFK
LABS
#FutureofRetail
02 Networked-Knowledge Exchange
Investing in fluid communication
platforms that allow employees
to share knowledge and
streamline interactions as they
serve customers.

A more connected workplace is a more

productive workplace.
Julien Codorniou. Director, Workplace by Facebook

@PSFK
#FutureofRetail
LABS
02 Networked-
Knowledge
Exchange
Container Store
Wearables Streamline
Conversations On The
Sales Floor

containerstore.com

@PSFK
LABS
#FutureofRetail
PERFORMANCE
TECHNOLOGY
Companies are outfitting TRENDS
employees with the tools that 4. Tech-Driven Sales
provide access to customer
information to personalize service. 5. Customer Relationship Dashboards
6. Frontline Automation
04 Assisted Selling
Providing employees with
access to on-demand
information that reduces
friction in the purchase process.

Close to 50% of store associates believe

they do not know enough about the
products and services they are selling. In
fact, over half of store associates admit they
have lied to a customer due to a lack of
product knowledge.
Scott Duby, Director, Global Consumer Industry, IBM

@PSFK
#FutureofRetail
LABS
04 Assisted Selling

Boots
Voice-Activated Product And
Inventory Check For Associates

Boots.com

@PSFK
LABS
#FutureofRetail
05 Customer Relationship
Dashboards
Organizing customers
preferences, purchase
history and behavioral data
to ensure consistent service
across channels.
"Saks Fifth Avenue prides itself on the
relationships and experiences built between
its associates and customers. With this new
technology, Saks has the ability to provide
all customers the same 1 to 1 personalized
experience no matter the channel."
Joe Milano. Senior Vice President Of Digital Retail And E-Commerce,
Saks Fifth Avenue
@PSFK
#FutureofRetail
LABS
05 Customer
Relationship
Dashboards
Alaska Airlines
In-Flight Apps Alert Attendants
To Traveler Preferences, Needs
And Schedules

AlaskaAir.com

@PSFK
LABS
#FutureofRetail
RESPONSIVE
OPERATIONS
Businesses are investing in
seamless solutions to respond
quickly to the demands of
customers based on data insights.

TRENDS
7. Data-Refined Experience
8. Optimized Deployment
9. Dynamic Supply Chain
10. Last-Mile Fulfillment
07 Data-Refined Experience

Refining retail, production

and merchandising
processes based on
collected shopper data. The more we know about customers, the
better we can deliver a special and relevant
experience whether its through prices,
assortment, services or personalized emails
offering better values.
Yael Cosset. Chief Commercial Officer and CIO, 84.51

@PSFK
#FutureofRetail
LABS
07 Data-Refined
Experience

Ralph Lauren
Clothing Room Merchandise
Tracked Via Smart Mirrors

oaklabs.is

@PSFK
LABS
#FutureofRetail
08 Optimized Deployment

Adapting staffing and

workflows to fluctuating
customer traffic, without
impacting background
functions or responsibilities. 88% of managers say their stores are
understaffed on a weekly basis, and
46% say their stores suffer from
understaffing at least 10 hours each week.
Factoring People Into The P&L Equation. Workjam, 2016

@PSFK
#FutureofRetail
LABS
08 Optimized
Deployment

Walmart
New Scheduling System
Improves Peak-Hour Staffing

@walmart

@PSFK
LABS
#FutureofRetail
09 Dynamic Supply Chain

Creating a flexible supply

chain to optimize individual
orders and keep up with the
demands of the marketplace.
"We need to get new fundamentals in
place...because the stress and strain we
put on our supply chain today is very
different to what was the case four or
five years ago."
Mike McNamara. CIO, Target

@PSFK
#FutureofRetail
LABS
09 Dynamic Supply
Chain

Target
Retailer Develops Internal Apps
To Improve Supply Chain
Management

target.com

@PSFK
LABS
#FutureofRetail
Driving Customer-Focused Transformation

Solve For The Customer Offer 360-Degree Support

Complement The Human

Invest In Time And Attention
Touch With Tech

Iterate Towards Improvement Drive Towards Transparency

About PSFK Labs is an innovation consulting firm. Since 2004, our agency team has
PSFK Labs helped global corporations concept better products, services,
communications and experiences. Our researchers, analysts and designers
leverage a unique research process with unparalleled access to experts to
PSFK Labs identify and develop new business opportunities for brands.
42 Bond Street, 6th Floor
New York, NY 10012 In addition to our client work, PSFK Labs oversees the innovation portal
PSFK.com and produces a series of reports, workshops and events that inspire
creative professionals in their work.

Insights And Ideation Workshops

PSFK Labs' workshop program integrates

trend immersion, innovation ideation and
expert speakers to take teams from
emerging insights to future-forward ideation
in a single day.

If you are interested in organizing a

workshop, seeing a presentation of this
report, or understanding how PSFK can help
your team ideate new possibilities for your @PSFK
brand, contact us at sales@psfk.com
#FutureofWork
LABS
 @PSFK
Get The Full Report #FutureofRetail

The PSFK Future of Retail Report highlights the ten steps retailers and
brands must take to create a customer-first organization that can meet
and exceed the expectations of shoppers, day-in and day-out. The 7th
edition of PSFKs annual report provides an in-depth analysis of the
retail landscape with actionable strategies for effective retail planning
that can transform an organization for both customers and shareholders.
Get the full report for:

A roadmap of strategies for customer-first business transformation

Actionable insights to guide investment and operation of in-store technologies

60+ examples of retail innovation

Key takeaways and actionable strategies for employee training, retail

technology implementation and responsive supply chain management

Exclusive interviews, insights and statistical support from leading retail

experts at Walmart, Rent The Runway and others

Download the Full Report at: psfk.com/future-of-retail

Access all Reports and Debriefs as a PSFK Member: psfk.com/membership
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THE
FUTURE
OF

RETA I L 2017
Transformation Strategies For
Customer-First Business
@PSFK | #FutureofRetail