4 competencies that make up leading retailers

Ulta Beauty
Ulta is a great example of how omnichannel retailers can successfully personalize the in-store experience.

The top trends that retailers are investing in for 2018 include personalization, omnichannel, analytics and digital in-store technologies. In a recent report shared by Forrester, retailers who invest in these four areas have proven ROI. 

According to research, 70% of global business and technology decision makers at retail have made improving customer experience a top priority for the next year, second only to growing revenue (77%). To do this, they are investing in these four core competencies.

The drive for personalization is coming directly from consumers, as 36% of U.S. online adults believe retailers should offer a more personalized experience and 35% are more likely to buy from a retailer who sends them personalized advertising. But standing in the way of retailers are technology and consistency across channels. 

One retailer making a big leap in personalization is Starbucks, which launched its mobile app in 2011. Starbucks has used personalization to reduce time in lines and increase customer spending by collecting data through their mobile app. In 2017, personalization contributed to 21% of all transactions through the app.

The second core competency, omnichannel fulfillment and engagement, has grown with the desire for buy-online-pick-up-in-store (BOPIS) options by 64% of all US online adults. Currently, 81% of digital retailers offer or plan to soon offer BOPIS. However, many omnichannel retailers still do not have the platforms in place for these strategies. 

Lowe's is a retailer that has revamped the role of its stores as fulfillment and engagement centers in an effort to improve its omnichannel sales. Instead of closing stores, Lowe's is using locations for BOPIS, which now accounts for 60% of all online orders, and 40% of these shoppers make an additional purchase when they walk in the store for pickup. 

RELATED: Lowe's smart home membership jumps 40% in 2017

The third core competency for successful retail is harnessing real-time data and analytics. Almost 50% of global business and technology decision makers reported that leveraging big data and analytics is a top priority as they differentiate themselves in the digital commerce space. 

Macy's is successfully using analytics to augment merchandising decisions. Macy's investment in the equipment for managers includes custom dashboards and tools to drill down into sales, cart abandonment, and supply chain and inventory data. It helps merchandising managers make more accurate, smarter and faster decisions. 

RELATED: Is Macy's new loyalty program missing the big picture?

Finally, successful retailers are investing in in-store digital technology to revamp the retail experience. Much of the success lies in combining this in-store technology with other top initiatives such as using data from multiple touch points to personalize CX and optimize operations.

Forrester's example of Ulta is significant, as the retailer has seen a huge growth in sales for 2017. The brand's online and mobile traffic jumped 73% and 104% respectively in the latest quarter. Ulta's clienteling app allows loyalty customers to carry tables while they shop in-aisle. It also enables associates to customize information by providing a look into past purchases, loyalty points and other past behaviors. Loyalty members are huge for Ulta, as 90% of sales are driven through these 25 million members. This is an optimized part of the cutover journey, making offline shopping as personal as online. 

As a conclusion, the study recommended that retailers focus on investing in innovation that drives greater customer experiences, starting with prioritizing what will best serve the brand's unique customers. Then, invest in technology that can scale and generate ROI across the organization. Finally, work faster to expedite success. In other words, pilot new initiatives and if they work, get them rolled out on a larger scale.