Editor’s note: To kick off the new year and in preparation for NRF The Big Show, we invited partners from across our retail ecosystem to share stories, best practices, and tips and tricks on how they are helping retailers transform during a time that continues to see tremendous change. Please enjoy this entry from our partner.

If you put a pot of water on the stove, it doesn’t heat up instantly. It simmers slowly at first, eventually picking up steam to reach a rolling boil. The retail landscape is not so different. Capgemini’s research shows the sector has evolved over four generations, from the early days of fragmented outlets to omnichannel and customer-centric focuses, with a fifth generation on the horizon that promises to be centered on consumption.

• Generation 1: Fragmented outlets
• Generation 2: Chain concentration
• Generation 3: Omnichannel
• Generation 4: Consumer-centric
• Generation 5: Consumption-centric

Although incremental change allows companies to experiment and iterate during their digital journeys, the COVID-19 pandemic rapidly accelerated the evolution of online and contactless shopping. Evolution became a revolution, with most Consumer Product and Retail (CPR) companies still mastering the omnichannel generation of their digital transformation to create a seamless shopping experience. Companies that are more digitally mature are already aspiring to the consumer-centric phase, embracing opportunities made possible by technology such as personalization and automation.

What consumers want

Customers have more choices in how they shop and engage with brands. This has made it harder for brands to predict and anticipate needs across customer journeys. And that’s convincing some companies to innovate more quickly as consumer demand drives the need for speed and scale.

Think about your own online behavior. Say you’re shopping for an item and searching online for the closest store in your neighborhood. Google is likely your go-to for finding that information. Looking to troubleshoot an issue with a product or seek out a service? Again, you’ll likely hit up Google first, not even considering going directly to a brand’s website for answers.

Both scenarios point to a disconnect between virtual and physical worlds, a gap technology can bridge in numerous ways such as breaking down silos and integrating fragmented media channels. Interestingly, though, not everything will be centered online all the time. In our recent study on consumer behavior, The great consumer reset, Capgemini discovered 57 percent of shoppers plan to return to brick-and-mortar stores post-pandemic, which is basically unchanged from the 59 percent who often interacted with physical stores before.

But business as usual? Not even close. Consumers have come to expect a frictionless shopping experience (buy online, pick up in store) or an immersive one (products displayed online using augmented reality), and are not content to return to in-store lineups, empty shelves, or a one-size-fits-all approach. Moreover, customers want personalized interactions while ensuring their data and privacy are protected.

So the role of the store is changing. In fact, many online-only brands are opening brick-and-mortar establishments to drive customer experience. In our research on “smart stores,” we found the majority of consumers (66 percent) believe automation can improve their shopping experience by solving the challenges they face at retail stores.

From personalization to serendipity

Retailers must recognize that they have to win consumer trust and confidence. Many consumers believe retailers’ use of tech is focused on reducing costs rather than easing friction. And they’re right. That same Capgemini research found that only one-third (35 percent) of retailers consider “solving customer pain points” as the most important criteria when deciding which automation use cases to implement.

“Retailers are largely in the early stages of adopting automation, and that’s an opportunity to rethink how they’re using technology, not just to smooth out friction and engender consumer trust but to build unexpected consumer benefits,” says Neerav Vyas, Head of Customer First, Co-Chief Innovation Officer, Insights & Data, North America, Capgemini. “We’re trying to move towards this idea of delivering serendipitous experiences to bridge the physical and digital divide.”

The focus is not solely on shoppers seeking out a specific product. “When consumers are in an exploratory mood, retailers can recommend products and services customers didn’t even know they wanted,” says Vyas. For example, business teams that use personalization platforms as part of an integrated media strategy can optimize algorithms against outcomes such as improving conversion and driving engagement.

Vyas says the elevated experience from “personalization to serendipity” fosters trust in the ability of recommendation architectures to persuade and influence consumers’ choices in beneficial ways. A case in point: our research found that half (52 percent) of spending by millennials goes towards experience-related purchases. As always, the key is to meet consumers where they are. Even better, according to Vyas, is to anticipate and understand when signals like customer intent are changing.

How to create value throughout the customer journey

One solution companies can implement right now is an integrated media spend platform that incorporates reporting, planning, and strategy across the entire customer journey. This offers value throughout the customer journey by using technology to reduce friction along the way. Think of it as starting with the customer looking for a product (search and discovery), moving on to the purchase (omnichannel basket, “shoppable” screens) and pick up/delivery (QR code scan in store), and through to post-purchase engagement with the retailer (Google Contact Center AI).

Such a holistic approach also accelerates data acquisition, integration, and reporting using advanced analytics to break down silos and emphasize the importance of privacy and first-party data. This in turn guides end-to-end interventions across customer journeys that enable optimized media spend, empowers businesses to analyze their spend distribution, fine-tunes owned and paid tactics with agencies, and promotes stewardship to support audit efficacy.

A culture of experimentation

With this data-driven focus, CPRs can create a 360-degree perspective of the customer. That intelligence can be used to enhance and humanize automated shopping experiences by putting the customer in control, whether online, in store, or across company brands. Moreover, by using Google Cloud’s emerging technologies such as artificial intelligence (AI), we help companies accelerate value across the spectrum, from supply-chain optimization and customer innovation to consumer experience.

Building a culture of experimentation is a team effort. “It’s not ever just one person who had a big idea. It’s all incremental steps,” says Jennifer Marchand, Google Cloud COE Leader, Capgemini. “Finding the right use case and timing is everything.” Take Google Glass Enterprise, she continues. For greater consumer experience, it can enable in-store associates to better serve with hands-free checkout, customer personalization and recommendations, and special offers. At the same time, Computer Vision and Smart Shelves can help prioritize tasks for employees, notifying them of low stock or a spill in the store.

Marchand points out that companies and consumers alike might not be ready to fully adopt some technology like facial recognition, but since almost everyone has a smartphone these days, they can benefit from automation with ease. “What’s interesting,” she adds, “is the way Google thinks about these types of problems, solving them for the long term.”

The store of tomorrow

Imagine a truly frictionless shopping experience, where state-of-the-art computer vision and AI identifies the products you pick up, put back, and keep, allowing you to head home, completely bypassing the checkout, with a 99 percent accuracy rate and receipts sent directly to your mobile app. That utopian experience is already taking shape at CornerShop, Capgemini’s live experimental store in London, UK.

Jamie MacLoud, Transformation & Strategy Consultant at frog, part of Capgemini, describes the retail space, which runs on Google Cloud, as the store of tomorrow, and not the distant future. It’s an experiential space where retailers and brands can explore, develop, and test technological shopping innovations in real-time. The outcome is a clearer understanding of how digital innovation can enable new ways to progress the customer experience, improve in-store operations, and help consumers to rediscover the joy of in-person retail through new ways to shop and engage with brands.

“We build, test, and learn about store concepts of tomorrow that we believe could be implemented into actual stores in the next one to two years. Getting these experiences in front of real customers in the CornerShop allows us to generate tangible learnings that we can share with our clients and use to shape future store strategy” says MacLeod. CornerShop was opened to the public in two eight-week stints, which allowed real-time testing to see what technologies resonated with customers, which brands can adapt and scale. Frictionless checkout, not surprisingly, was a big win for customers, but the technology underpinning the “virtual try-on” of clothing was deemed more suitable for the store of the future.

So, unlike an innovation lab, CornerShop lets companies experiment risk free, speeding up the process from hypothesis to full-scale implementation. It’s also another step toward solving the challenges customers face, while delivering those serendipitous experiences that build brand loyalty and longevity.

Learn more about how Capgemini is partnering with Google Cloud to help retailers create next-generation shopping experiences today.

We would like to acknowledge Jamie MacLoud, Transformation & Strategy Consultant at frog, part of Capgemini and Neerav Vyas, Head of Customer First, Co-Chief Innovation Officer, Insights & Data, North America at Capgemini who supported with invaluable insights and subject matter expertise in the writing of this blog post.

Cloud computing is globally recognized as the single most effective, agile and scalable path to digitally transform and drive value creation. It has been a critical catalyst for growth, allowing private organizations and governments to support consumers and citizens alike, delivering services quickly without prohibitive capital investment. European organizations—in both the public and private sectors—want a provider to deliver a cloud on their terms, one that meets their requirements for security, privacy, and digital sovereignty, without compromising on functionality or innovation.

Last year, we set out an ambitious vision of sovereignty along three distinct pillars: data sovereignty (including control over encryption and data access), operational sovereignty (visibility and control over provider operations), and software sovereignty (providing the ability to run and move cloud workloads without being locked-in to a particular provider, including in extraordinary situations such as stressed exits). After extensive dialogue with customers and policymakers, we are today unveiling ‘Cloud. On Europe’s Terms’. As part of  this initiative, we will continue to demonstrate our commitment to deliver cloud services that provide the highest levels of digital sovereignty, all while enabling the next wave of growth and transformation for Europe’s businesses and organizations.

Google Cloud’s baseline controls and security features offer strong protections, meet current robust security and privacy requirements, and address many customer needs. Yet each country in Europe has its own characteristics and expectations. Certain customers in Europe may require more flexibility than current public and private cloud offerings may provide. We want to deliver a platform that allows customers to deploy workloads with the desired local control, without losing the transformational benefits of the public cloud.

We are now delivering on this new vision collaboratively with trusted local technology providers in Europe, starting with T-Systems in Germany. Today, together with T-Systems, we announced a partnership to build a Sovereign Cloud offering in Germany for private and public sector organizations. The offering will become available in mid 2022 with additional features being added over time.  

In this new joint offering, T-Systems will manage sovereignty controls and measures, including encryption and identity management of the Google Cloud Platform. In addition, as part of their offering, T-Systems will operate and independently control key parts of the Google Cloud infrastructure for T-Systems Sovereign Cloud customers in Germany.

We are committed to building trust with European governments and enterprises with a cloud that meets their digital sovereignty, sustainability and economic objectives. We are starting with T-Systems today and will continue by partnering with trusted technology providers in selected markets across the region. 

Customers in other markets across Europe will be able to use these trusted partner offerings or use Google Cloud’s controls to exercise autonomous control over data access and use; exercise choice over the infrastructure that is used to process that data; and avoid cloud vendor lock-in. 

With Google Cloud, our customers also automatically benefit from sustainable business transformation on the cleanest cloud in the industry. Today, we are the largest annual corporate purchaser of renewable energy globally, and by 2030, we aim to operate entirely on 24/7 carbon-free energy in all of our cloud regions worldwide. 

We’ll continue to listen to our customers and key stakeholders across Europe who are setting policy and helping shape requirements for customer control of data. Our goal is to make Google Cloud the best possible place for sustainable, digital transformation for European organizations on their terms—and there is much more to come.

Budget concerns and inflation shock are causing noticeable shifts in consumer behavior, a head-spinning turnabout since the pandemic days of 2020. We went from not having access to enough goods to now not having the right goods at the right price points. Heading into the holiday season, retailers will need to look sharp and be able to deliver value to the increasingly cost-conscious consumer — with frictionless product discovery and digital shopping experiences, relevant inventory, and personalization.

Those are a few of the insights gleaned from a recent eMarketer webcast on how retailers can better combat the effects of inflation, with pragmatic recommendations from experts including Amy Eschliman, managing director of retail solutions strategy and industry engagement at Google Cloud; Alexis Hoopes, vice president and head of e-commerce and direct-to-consumer (DTC) at Mattel Inc; and Elissa Quinby, head of retail insights at Quantum Metric. We’d like to share five key takeaways that retailers can adopt.

1. Be prepared for earlier holiday planning. Budget-conscious buyers are planning their purchases earlier than ever. According to our partner Quantum Metric’s latest Retail Benchmarks research, 40% of U.S. consumers and 30% in the UK have already started their holiday shopping1. At Mattel, Alexis noted, “We’ve learned to be nimble and early for our consumers, and to have products available for them when they’re ready to shop.” With higher prices, she added, “Consumers are preplanning and researching more, viewing product detail pages multiple times to check a higher-price item before adding it to their basket.”

Quantum Metric’s same research also shows that while average cart values grew between January to July 2022 — larger than they were at the same time last year1 — consumers were shopping less frequently. Because of higher prices, 37% of shoppers are now pre-planning and purchasing items all at once to help keep to their budget1. Amy observed. “That means retailers need to make it super easy for customers to find what they want to avoid shopping-cart abandonment.”

Retailers who make it easier for shoppers to find the right products, by providing Google-quality search and recommendations, can help reduce cart abandonment and increase conversions.

2. Get a handle on out-of-stock issues. While many of the supply-chain issues that surfaced during the pandemic have cleared up, inventory continues to be a challenge in retail. During the 2021 holiday season, Google/Ipsos research shows that consumers saw a 253% increase in “out of stock” messages versus pre-pandemic2. Elissa further pointed out that a great majority of both U.S. and UK consumers experience out-of-stock issues several times a month. It’s a fluid situation, however, with retailers facing bloated inventory as consumer demands quickly pivot from, for example, branded goods to generic or white-label items. “In the next six months or so, you really need to make sure you have the right inventory to meet consumer demands,” she advised.

The need for end-to-end visibility and the ability to act in real-time across the supply chain has never been more pressing. Google Cloud and our partners are tackling the top supply chain issues head on with solutions that enable end-to-end visibility, analytics and alert-driven event management as well as AI solutions and automation to streamline processes like procurement, fulfillment, and delivery.

3. Introduce value: communicate the quality of the product and the experience. While rising prices are paramount for many shoppers, it’s a common misconception that consumers are making purchase decisions based solely on price. Alexis remarked, “In e-commerce, we talk about price, product, service, and experience. Price is only one of the pillars for consumers. At Mattel, we are fully focused on product and experience. What makes this special? How do we connect directly in new ways to the consumer? Create ‘wow’ moments and deeper connections. When we think about value for our consumers, it’s the strength of the products that will drive the purchase.”

Elissa also noted that while consumers are doing a lot of comparison shopping, it’s really about value, whether a high-quality product or a high-quality experience. Quantum Metric’s Continuous Product Design solution, which is built with BigQuery, ingests data across multiple digital touchpoints, including from mobile and web applications, and connects customer signals to every stage of the product lifecycle to help deliver the products and experiences that customers actually want.

4. Ensure consistent experiences across channels. Today, consumers crave the cross-channel shopping experience. “The channel experience has gone from online to in-store to now everywhere,” Amy commented. “We call it ubiquitous digital shopping.” Elissa added that 75% of consumers do most of their shopping digitally. However, mobile drives 67% of digital traffic, but just 49% of sales.1 “Recent trends in traffic and conversion rates by device show that we can expect the most traffic for the big sale days on mobile,” she said. “People are looking for discovery and awareness, maybe even adding items to the cart as a placeholder or reminder. But they prefer to complete a sale on a desktop. It will be critical for retailers to offer a consistent experience, especially on major sale days like Black Friday and Cyber Monday.” Elissa also advised wrapping up any experiments with product and site design early, making sure to understand the customer experience holistically across the organization and prioritizing efforts to eliminate friction.

Consumers now expect to be able to shop wherever and whenever best fits their needs, whether in a store, on your website, through your app, or from within a social media ad, and have it be a consistently good experience no matter how they first entered or exited your commerce site. Google’s 2022 Retail Marketing Guide provides useful insights and tips on how to grow your online and in-app sales.

5. Personalize touchpoints to build loyalty. Connecting with your customer base and making sure they understand the value of your offering is essential. Alexis noted that the key is to keep your messages fresh as the holiday shopping season expands, providing new messages as they keep coming back to your store. “We need to engage them by helping them find what they are looking for at the right time,” she said. “Recognize that they are doing more planning and wish-list building early, then buying last-minute gifts at lower prices towards the end. Make sure those are front and center.”

Alexis also pointed out that today, consumers are providing more data points with the products they view or the items sitting in their carts. “What’s so great about e-commerce is that we can use all of this to create more personalized, direct messages targeted to those consumers,” she commented.

Amy recommended continuing to focus on conversion with product discovery and personalization, harnessing customer data to drive insights and action. “Any company’s biggest asset is their data. Using it in as many ways possible and activating it across the company is incredibly important,” she remarked. “Take advantage of your first-party data to activate everything from marketing campaigns to a more efficient supply chain. For every customer who comes to one of your digital properties, make sure your product discovery is as easy as possible. Pay attention to your recommendations, driving personalization to make that experience as unique and fruitful for the customer as possible.”

Achieving these objectives requires a modern cloud data warehouse and activation of a customer data platform. Retailers can explore how Google Cloud’s advanced data capabilities and our ecosystem of partners can power a customer data platform that supports more personalized marketing, shopping experience, and customer service.

While these are our key takeaways, we invite you to register to watch the on-demand webinar, “5 Ways Retailers Can Combat the Effects of Inflation,” for even more insights.

1. Quantum Metric Retail Benchmarks, “Adjusting for Inflation.” The report is based on aggregated browsing behavior from January to July 2022, paired with a survey of 3,400 consumers in the U.S. and UK.
2. Google/Ipsos, Holiday Shopping Study, Oct 2021 – Jan 2022, Online survey, US, n=7,253, Americans 18+ who conducted holiday shopping activities in past two days