in collaboration with

Retail
Trends
Playbook
2021
Driving Operational Resiliency with
Connected People and Systems
 Introduction
Retailers today face unprecedented to creating solution-oriented products
challenges as they respond to the and delivering specialized campaigns,
new ways we work, live, and shop. machine learning, analytics and
Organizations of all sizes have other technologies are empowering
scrambled to adapt their businesses brands and retailers to understand
and move to remote work when their shoppers better and deliver
possible even as they struggle to differentiated, one-to-one experiences
understand their future. As retailers across all retail channels. By seamlessly
look to deliver on evolving customer connecting their people, systems and
needs such as contactless shopping operations in new ways, businesses
and curbside pickup, many are are not only more responsive to
leveraging solutions to maintain the evolving expectations of their
business continuity. These solutions customers, but are also more resilient
can enable teams to be productive and in the face of change. Data-led
secure from anywhere, rapidly adapt intelligence and digital technology are
business processes, and stay engaged essential to stay connected, secure and
with customers while securing and productive in today’s newly formed
managing access to apps, devices, and landscape.
data. From offering flexible services

About The Retail Trends Playbook 2021 is a

report by business intelligence platform

This PSFK in partnership with Microsoft

that presents key trends, best-in-class

Report
examples and strategies for executing
intelligent retail with the aid of data-driven
technologies. Supported with expert
insights and key analyses of the global
retail landscape and consumer needs,
the Retail Trends Playbook 2021 will help
brands and retailers define their strategic
roadmaps.

2 Retail Trends Playbook 2021 in collaboration with

 Moving
Forward
Together
The way we work and live has changed in ways many
of us couldn’t have imagined. From how we interact
with our friends and family to working from home and
so much more. For me personally, juggling the joys of
homeschooling my children with a packed work schedule
has been a true personal test. Yet I know many are facing
more critical concerns.

I’ve had the opportunity to speak to retail and consumer

goods leaders from across the world about the ways they
are adapting to serve their customers and stay open for
business. Faced with drastic shifts in demand, mandated
store closures, evolving customer needs, and major health
and safety concerns for their employees, many retailers are
navigating unchartered waters.

Companies from L’Oréal to Levi’s to Ste. Michelle are

learning to connect people, systems and operations in new
ways. In this new reality, the best way to move forward
is together. If you’re curious about how we’re helping
customers respond and adapt then check out these
resources.

Finally, a heartfelt THANK YOU to all of the retail

By: Shelley Bransten, superheroes out there keeping our shelves stocked,
Corporate VP of Global Retail & groceries delivered, and so much more in incredibly
Consumer Goods at Microsoft challenging times—you all are AMAZING!

3 Retail Trends Playbook 2021 in collaboration with

 Table of Contents
A Snapshot of Today 5
Accelerated Consumer Needs Shaping The Retail Landscape 5
Strategies To Help Retailers Navigate Today’s ‘New Normal’ 8
Foundational Shifts In Shopper Expectations 11
Prioritizing Key Opportunities 15
Anywhere Commerce: Bridging Digital & Physical Worlds 15
Rise of the Firstline Employee 16
Proliferation of Data & Resulting Opportunity for Personalization 17
Sustainability As A Competitive Advantage 18
Visualizing Data-driven, Intelligent Retail 19
Powering Exceptional Customer Experience 20
Theme #1: Know Your Customers 22
Personalize Interactions On Every Channel & Touchpoint 23
Deliver Proactive Service & Support 25
Digital Transformation Strategies 27
Theme #2: Empower Your Employees 28
Provide 360-Degree Customer Profiles To The Frontline 29
Embed Intelligent Assistance Inside Remote & Physical Workflows 31
Digital Transformation Strategies 33
Theme #3: Enable An Intelligent Supply Chain 34
Build A Connected Organization Where Everyone Can Share From Anywhere 35
Build Agile Inventory & Operations Resilient To Rapid Change 37
Digital Transformation Strategies 39
Theme #4: Reimagine Retail 40
Synchronize Digital And Physical Data & Systems 41
Leverage Real-Time Insights To Drive Innovation 43
Digital Transformation Strategies 45
Roadmap To Success: Key Questions To Guide Intelligent Tech Investment 46
About PSFK & Microsoft 47

4 Retail Trends Playbook 2021 in collaboration with

 4 Accelerated
Consumer Needs
Shaping The Retail
Landscape
In the current moment consumers are facing
unprecedented uncertainty. As they adjust to life
in a new normal, they’re looking to retailers to
offer more than business as usual. Customers seek
greater choice, transparency and control in how
they shop without compromising on the level of
personalized sales and service they expect. As
their needs change, they trust that their preferred
businesses will be able to adapt alongside them.

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 4 Accelerated Consumer Needs Shaping The Retail Landscape

1. Transparency & Control:

As consumers seek more control over their in-store experience, an expanded research
phase has entered the shopper journey. Faced with numerous uncertainties, consumers are
looking for retailers to provide new levels of transparency via live wait times, appointment
booking services, and accurate inventory reporting. Beyond knowing what to expect from
their visit, customers want assurances that retailers are taking steps to provide the safest
environments possible as they decide how, when, and where they’ll shop.
89% of shoppers have 87% of respondents have been 90% of consumers state that
concerns about shopping in experiencing more out-of- it is important for brands to
physical stores, with the #1 stock products both in-store have the products they want in
worry for shoppers is being and online recently. 79% said stock.
too close to other people, with they were somewhat likely or
63% of worried respondents very likely to buy the same
Weathering the Storm: Brand Management
citing that as a top concern. product from a different
in the COVID-19 Era. Morning Consult,
In addition, how regularly the retailer if the desired product
2020
store is cleaned was the #2 was out of stock.
fear, with 40% of people listing
it as a problem. Long lines –
COVID-19 Survey: Consumer Trends and
seen to enter many stores and
Their Impact on Retail Supply Chains. Blue
at checkout – troubles 39% of
Yonder, 2020
our respondents.’
Even When Stores Reopen, Shopping Is
Going to Look A Lot Different. Fast, 2020

2. Connectivity & Support

Despite their safety concerns, shoppers aren’t willing to compromise on the quality of
their experience. As customers pivot to remote forms of shopping they’re turning to
retailers who can deliver the hyper-personalized sales and service they expect. In order
to provide the high-touch, contactless methods of brand communication and support,
retail teams need the right solutions to work together and communicate virtually while
providing a heightened sense of consumer connection. From interactive live streams to
one-on-one video chats with experts and immersive visualizations, these new tools not
only bridge the gap between on and offline channels, but better assist retailers who lack
the cross-organizational agility to respond to a sharp increase in customer inquiries.

Consumer willingness to Taobao, an Alibaba owned Consumer retail spending

purchase through social media live streaming platform, via chatbots is expected to
continues to rise, as 58% of experienced a 719% jump reach $142 billion by 2024, an
those surveyed in Poshmark’s in the number of first-time increase from $2.8 billion in
report indicate they’d be merchants using the site to 2019.
comfortable buying through a sell their products between
social media page in place of a January and February.
website. Chatbots: Vendor Opportunities & Market
Forecasts 2020-2024. Juniper Research,
Poshmark’s 2020 Social Commerce “The Next Frontier Of Shopping Will Be 2020
Report. Poshmark, 2020 Livestreamed.” Bloomberg, 2020

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 4 Accelerated Consumer Needs Shaping The Retail Landscape

3. Flexibility & Connectivity

Everyday activities, once normal, have taken on a new element of risk, and consumers are
prioritizing the retailers capable of rapidly adjusting to unprecedented changes in the
business environment. As contactless transaction models, curbside fulfillment services,
and improved returns become new expectations, retailers are catering to customers’
exponentially greater ‘meet me’ mindset with safe and flexible solutions.

59% of consumers are more Americans’ wariness about A Forrester Narvar survey
likely to use curbside pickup being in stores also extends to found that 40% of retailers
following the outbreak. This how they pay, with 34% uneasy have relaxed their return
figure increased to 75% among about touching credit card policies and 27% said it’s
respondents who subscribe to terminals and 32% concerned something they’re considering.
multiple delivery services. about passing cash back and
forth at the register.
“Survey Results: Retailer Sentiment &
Covid-19 Shopping & Delivery Trends. Action During The Covid Crisis.” Narvar x
Commerce Hub, 2020 Even When Stores Reopen, Shopping Is Forrester, 2020
Going to Look A Lot Different. Fast, 2020

4. Community & Compassion

While social distancing has replaced everyday physical interactions with digital ones,
human connections and shared experiences continue to drive consumers’ preferences
and brand choices. As consumers navigate today’s landscape, they expect retailers to
lead with empathy and understanding as they introduce new products, campaigns, and
messaging, and are placing greater value in the companies prioritizing people over profit
by dedicating their resources to supporting their local and national communities.

Social distancing has 84% of consumers want 77% of consumers agree

consumers wanting to engage brands’ social channels to they feel more positively
more with brands, ads, and facilitate a sense of community about brands making an
content. Just 2% of consumers and offer support to those in effort to support society at
believe brands should pause need during these hard times. the moment. Additionally,
all advertising, while 48% say 77% believe that brands
brands should create ads that should support their local
Trust Barometer Special Report: Brand
provide information. communities, and 80% say
Trust And The Coronavirus Pandemic.
that brands should show
Edelman, 2020
how they’re supporting their
COVID-19 Consumer Survey. Unruly, 2020
employees.

Advertising During COVID-19. Twitter,

2020

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 4 Strategies To
Help Retailers
Navigate Today’s
‘New Normal’
As the retail landscape experiences massive shifts,
the new normal will be defined by the retailers
who are able to prioritize the technology and
tools necessary to intelligently connect people,
systems and operations. In order to create a
resilient end-to-end operation within today’s
new normal, and respond rapidly to a new set
of consumer expectations, retailers will need
to explore new business models and consider
how best to support their employees to ensure
business continuity.

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 4 Strategies To Help Retailers Navigate Today’s ‘New Normal’

1. Rapidly Adapt To Remote Sales & Services

Unprecedented events have created a new customer hierarchy of needs, and
accelerated the pace of business innovation. In order to successfully adjust and
future-proof customer relationships and sell, service, and deliver on customer
expectations in a remote environment, ideate how to evolve products and
services, including new business models and partners. As businesses look to
retain a high-touch level of service within a contactless era, prioritize virtual
connections, provide real-time digital buying experiences that build customer
confidence and trust, and consider all customer interactions through the lens of
safety, convenience and accessibility.

Prioritize the necessary technology to adjust to a remote

selling environment while staying connected to customers
by providing multiple options for everything from payment
to fulfillment to accommodate different levels of comfort

Consider ways to streamline the in-store and online

shopping experience through digital tools that give
customers more control over their experience, and help
associates respond to consumer inquiries in real-time

2. Enable Teams Anywhere

As companies adjust to the challenges posed by remote work and new
precautions within the physical workplace, seamless collaboration and
communication take on even greater importance. In order to enable safe and
productive work environments, retailers must prioritize technology that enables
teams to collaborate and be productive from anywhere, and allows for instant
connections to ensure reliable, real-time access to the support employees
may need. Retailers looking to successfully complete this transition should
additionally perform an audit of their current omnichannel capabilities, and
consider how they can better assist employees in providing consistent levels of
personalized customer support, no matter their location.

Create a safe and secure work environment that

encourages real-time communication and allows employees
to meet and collaborate anywhere

Empower employees to deliver exceptional customer

service across all channels, no matter their location, by
keeping them informed and engaged

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 4 Strategies To Help Retailers Navigate Today’s ‘New Normal’

3. Create A Resilient Supply Chain

Take steps to embed resilience and agility into every stage of the supply chain to
be better prepared for disruptions of any scale, and to better meet customers’
expectations. Offer real-time inventory visibility to build a foundation for both
business and consumer confidence. Leverage data and IoT to create a universal
record of items as they move from suppliers to manufacturers to warehouses to
stores to customers and ensure that every partner has access. Prioritize the tools,
solutions and platforms that will allow for this type of transparency to be shared
across consumer channels and organizations in order to better plan for, and
instantly adapt to, changing circumstances.

Intelligently connect people, systems and operations in

order to quickly deliver insights to the teams that need
them most

Break down silos through shared access to data and

analytics that offer real-time inventory visibility and
minimize disruptions

4. Reimagine Retail Realities

As customer and business needs accelerate the adoption of digital platforms
and technologies, there is a greater need for the infrastructure and solutions
necessary to manage and secure access to apps, data and devices across entire
companies and enterprises. Protecting sensitive data while simultaneously
encouraging productivity are the defining challenges guiding retailers as they
navigate and shape the new normal. From translating the in-store experience
online through high-touch digital executions and personalized services to
refitting the physical store to balance customer experience with safety, there is
an unprecedented spike in the need for remote cloud access and on-premises
apps. Retailers will need to have the right solutions in place to adapt their
experiences to the changing needs of both customers and employees.

Integrate digital tools and platforms into operations to

ensure business continuity through secure remote access

Invest in key infrastructure to improve security for remote

work and better equip stores for the changing realities of
offline retail

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 Foundational
Shifts In Shopper
Expectations
As retailers collectively navigate a new normal and pivot in the face
of an accelerated set of consumer needs, they must not lose sight of a
number of foundational shifts in shopper behaviors and expectations
already underway. Customers expect greater inventory transparency and
accessibility, regardless of how and where they choose to shop. They
seek personalized service and experience delivered by knowledgeable
associates and they’re increasingly willing to share data to receive it.
Purpose-led practices, particularly around sustainability, continue to
impact purchasing decisions and long-term loyalty.

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 Today’s Consumers:

Prioritize The Right Product, At The

Right Place
60% of Gen Z consumers 50% of consumers have 61% of online shoppers
polled said the availabil- decided where to shop used in-store pickup at
ity of automated pickup online based on whether least once over the past
lockers affected which they could pick up their year, however fewer than
retailers they chose to buy order in-store. one in three retailers have
from. BOPIS & The Future Of Order
optimized seamless pro-
Online Shopping & Delivery Habits Of Fulfillment. Radial, 2020 cesses such as BOPIS.
Generation Z. Package Concierge, 2019 Customer Service & Delivery
Experiences Retail Shoppers Want.
Radial, 2019

Look To Employees As Brand Experts For

Service & Support
75% of responses about 65% of consumers 73% of consumers say that
positive shopping say that the quality of good customer service
experiences were based customer service is a encourages them to spend
on an associate helping to factor when deciding more money than they
solve a problem. where to make their had originally planned.
Winning Digital Transformation At
purchases, while friendly 57% of respondents said
Retail. Chase Design, 2020 and/or knowledgeable they would pay more for a
employees ranked as particular item or service
the most important if they knew they would
(62%) aspect of in-store receive strong service
customer service. during the shopping
The ICSC Customer Service Survey.
journey.
ICSC, 2019 The ICSC Customer Service Survey.
ICSC, 2019

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 Today’s Consumers:

Are Comfortable Sharing Data In Exchange

For Better Experiences
70% of consumers The portion of consumers 80% of U.S. online
globally are willing to who said they’re willing adults feel comfortable
share more personal data to share more data when sharing some personal
with the organizations brands are transparent information with retailers
they interact with online, rose to 73% in 2019 from in order to personalize
particularly when they see 66% in 2018. their experience.
a benefit such as greater
Global Research Survey. Accenture, There’s No Personalization Without
online security and 2019 Content Intelligence. Forrester, 2019
convenience.
Global Identity and Fraud Report.
Experian, 2019

Expect Personalization At Every Stage

A full 96% of Americans 85% of consumers 78% of consumers are
“agreed” or “strongly would like to select the more likely to shop at
agreed” with the benefits and rewards they retailers and brands
statement, “I’m more receive by personalizing providing a personalized
likely to do business their loyalty program experience.
with a company that based on their specific Shoppers Demand Superior
interacts with me in a purchases and individual eCommerce Experiences: Consumer
personalized way (i.e., preferences. Expectations in 2019. Avionos, 2019
knows information 2020 Loyalty Barometer Report.
about me from previous Merkle, 2020
transactions).”
Consumer Preferences for
Conversational Commerce Survey.
LivePerson, 2019

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 Today’s Consumers:

Value Sustainable Initiatives & Services

42% of Millennials say they 52% of Gen Z consumers The majority of Gen Z
have begun or deepened in Asia “try to have a (54%) state that they
a business relationship positive impact on the are willing to spend an
because they perceive a environment through their incremental 10 percent
company’s products or everyday actions.” or more on sustainable
services to have a positive products, with 50% of
Purpose Over Profit: How Generation Z
impact on society and/or Is Redefining Business, 2019 Millennials saying the
the environment. same.
Global Millennial Survey. Deloitte, 2019 State Of Consumer Spending: Gen Z
Shoppers Demand Sustainable Retail.
FirstInsight, 2020

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 Prioritizing Key
Opportunities
#1: Anywhere Commerce: Bridging Digital
& Physical Worlds
So much of delivering customer Adopt an anywhere commerce mentality
satisfaction rests in ensuring that brands to consistently meet customers with
and stores have the right products in the experiences they expect across all
the right place at the right time. With channels.
consumers now driving heightened
expectations around each brand
interaction, retailers are joining the Deliver seamlessness across all channels
best of digital and in-store to deliver a by ensuring customer access to the
seamless and safe customer experience. goods and services they expect to find.
This materializes in digitized physical
stores, where customers’ movements
and selections are used to quickly Optimize in-store technology to
refine product selections and redesign streamline and minimize points of friction
store flow to create more impactful, from browsing and discovery through
safer experiences. Meanwhile the hyper checkout and delivery.
growth of digital commerce has led to
retailers revamping their ecommerce
presence as well as, bringing the level Build closer connections with consumers
of service and one-to-one support by bringing the in-store experience online
customers expect to receive in-store through 1-to-1 interactions.
online through live chat agents and on-
demand virtual support.

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 #2: Rise of the Firstline Employee

A valuable asset in creating a shopper’s Provide the necessary tools for

first impression of a brand, frontline employees to remotely access pertinent
employees play a significant role in consumer and product information, and
customer acquisition and retention. in turn deliver optimal levels of service.
In order to safely optimize the level
of service customers receive, retailers
are empowering their workforce Encourage top-down connected
through connected solutions, tools and communications by providing interactive
technology. This comes to life through portals for employees to share ideas and
mixed-reality based training tools and gain feedback in real-time.
real-time communications between
executives, managers and frontline
employees via connected portals and Simplify the onboarding process by
devices, eliminating lags between incorporating mixed reality and video-
corporate policies and company- based learning tools into employee
wide adoption. As the role of frontline training procedures.
employees shifts in response to today’s
increasingly digital retail landscape,
Consider how equipping employees
retailers are tapping into these same
with tech-enabled devices on the floor
tools to retrain store associates for
can facilitate a more seamless customer
telecommunication and digitally-based
experience, from delivering product
customer service positions, ensuring
insights to one-step checkout.
that employees are able to provide
dynamic customer experiences across
every channel.

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 #3: Proliferation of Data & Resulting Opportunity
for Personalization
The new consumer responds to a one- Combine real-time insights and AI to
to-one approach, both in-store and create the 360-degree customer profile
online. As consumer expectations needed to deliver 1-to-1 services at scale.
shift at an unprecedented scale,
artificial intelligence is driving ROI via
personalized product, promotions and Apply machine learning and AI
experiences. To deliver this type of to customer data sets to enhance
custom experience at scale, retailers experiences based on learnings from
are leveraging connected solutions, AI previous interactions.
and real-time observations to create
the 360-degree customer profiles
necessary to deliver the insightful, safe, Update preferences in real-time through
and efficient shopping experiences opt-in intelligence as consumers navigate
consumers expect across every brand both the virtual and physical world.
interaction. Moving the personalized
experience one step further, retailers
applying predictive analytics and Leverage predictive analytics to
machine learning to their digital offering anticipate customers’ needs and
are anticipating consumers’ needs, preemptively provide relevant solutions
and meeting them with custom-made and recommendations.
recommendations.

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 #4: Sustainability As A Competitive Advantage
The adoption of technology in enabling Incorporate IoT-connected sensors and
sustainable initiatives and optimizing AI into the supply chain to provide real-
operations is paramount. From a time insight into each process, from
personal safety perspective, the sourcing and production to delivery.
consumer of the future will demand
transparency throughout the entire
shopper journey, and want to know Provide customers with the transparency
where a product was sourced, what they demand by providing them with
the conditions were for all workers behind-the-scenes access into each step
involved, and the entire delivery process of the customer journey.
of each order. To deliver that level of
transparency, retailers are bringing
supply chain and distribution logistics Leverage the insights gained from a
front of house, and incorporating them connected supply chain to optimize
into the consumer experience. In doing allocation of resources and reduce waste,
so, retailers now have an unprecedented from supplies and energy to workforce
view into their operations, allowing for and production.
greater streamlining across supplies and
workforce production, in turn creating Consider how sustainable initiatives
a more sustainable, efficient ecosystem can be integrated from the top down to
throughout the entire supply chain, as refine production and operations.
well as the consumer journey.

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 Visualizing Data-driven,
Intelligent Retail
An intelligent retail model can create rich, customer-first experiences at
all touchpoints, from backend operations to front-of-house innovations.
With a data-driven approach, retailers can turn data into dollars by
drawing in customers through personalized messaging, merchandise they
desire, an excellent support staff and an ultra-responsive retail experience
that is underpinned with the power of data collection and analysis.

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 Powering
Exceptional
Customer
Experience
The current retail landscape is defined by disruption. Legacy retailers are
competing for market and mindshare with direct-to-consumer startups,
brands and ecommerce marketplaces. Consumers now have more choices
than ever to fulfill every need, which is accelerating their expectations
around the shopping experience.

In the face of this rapid change, every retail business must excel in a
number of core areas to keep pace—personalization, staffing, supply
chain and cross-channel experience, all while simultaneously ensuring
consumer and employee safety throughout each step of the shopper
journey. Foundational to each of these new requirements is the ability to
leverage data-rich intelligence and ensure these insights are distributed
across all levels of the organization.

Know Your Customers

Largely a consequence of poor data collection capabilities, today’s brands and
retailers struggle to deliver tangible personalization. From the initial discovery
stage and product recommendations to post-purchase support, companies
need to collect consumer data from all touchpoints and deliver personalized
support at every stage of the purchase path. By developing a 360-degree
view of what customers need across channels, retailers can eventually provide
anticipatory support before it’s needed.

• Personalize Interactions On Every Channel & Touchpoint

• Deliver Proactive Service & Support

20 Retail Trends Playbook 2021 in collaboration with

 Empower Your Employees
Despite their attraction to digital modes of shopping, customers largely prefer
interacting with human associates for immediate support and guidance.
Retailers need to ensure their workforce is equipped to safely and efficiently
respond to customer needs and preferences by democratizing access to
customer data and purchase profiles. By having critical data readily accessible,
employees are now empowered to handle any and all customer requests,
effectively driving ROI and optimizing the customer experience.

• Provide 360-Degree Customer Profiles To The Frontline

• Embed Intelligent Assistance Inside Remote & Physical Workflows

Enable An Intelligent Supply Chain

Supply chain management plays a behind-the-scenes, albeit strategic, role
in how consumers receive or purchase their product as well as the products
they are able purchase. As inventory becomes an increasingly important
differentiator, stores need to leverage intelligent supply chain strategies to
ensure availability of the right products, at the right time to every customer.

• Build A Connected Organization Where Everyone Can Share From Anywhere

• Build Agile Inventory & Operations Resilient To Rapid Change

Retail Reimagined
Often the retail experience customers receive isn’t tailored to their specific
needs or preferences. Retailers need to reinvent their business models by
prioritizing agile and innovative solutions, and focusing on creating the
services, products and experiences their customers crave. By unifying data
systems and understanding strengths and weaknesses, companies will be
better poised to deliver more relevant and optimized ecommerce experiences,
enhanced shopper-level personalization and expand monetization
opportunities.

• Synchronize Digital And Physical Data & Systems

• Leverage Real-Time Insights To Drive Innovation

21 Retail Trends Playbook 2021 in collaboration with

 1Know Your
Customers
Developing and maintaining a “The next generation of consumers
two-sided, ongoing relationship expect personalization at an
with consumers is a foundational unprecedented scale. They want
every experience to be enhanced
strategy of any brand. This goes
based on learnings from their
beyond sending personalized previous interactions. Tastes and
communications to consumers, preferences are no longer declared
to actively responding to their but learned in real time through
needs by developing hyper- the ‘digital exhaust’ they create
relevant products and experiences as they navigate their virtual and
physical worlds. That’s going to put
collected and applied through
massive pressure on retailers and
intelligent processes. the technology they have in place
today.”

Shelly Bransten. Worldwide Corporate VP of Retail &

Consumer Goods Industries, Microsoft

22 Retail Trends Playbook 2021 in collaboration with

 Know Your Customers

Personalize Interactions On
Every Channel & Touchpoint
Brands can utilize powerful algorithms
to learn a consumer’s behaviors and
preferences, reaching them at home more
effectively than ever before. Advanced
CRM and marketing systems develop a
detailed shopper profile through repeated
interactions and utilize this information to
deliver proactive and personalized outbound
marketing and tailored recommendations.

Supporting Data:
“Consumers know businesses can deliver a seamless,
personalized, engaging experience—and expect
one every time they encounter a brand. The
entire organization plays a part in satisfying that
expectation.”

Christi Olson, Head of Evangelism for Search, Microsoft

“What’s important from a Nike shopping experience

is that with machine learning and AI, we’re able to
have every digital experience at Nike be unique and
personal. My wish for you one day is to feel that you
have your very own personal store curated for you
on our app experiences.”

Heidi O’Neill, President, Nike Direct

23 Retail Trends Playbook 2021 in collaboration with

 Examples:
Chateau Ste. Michelle Wine Estates
AI-powered CRM platform delivers 360-degree
consumer profiles at scale

To unify its data channels and improve its overall

customer experience, U.S.-based premium wine
company Chateau Ste. Michelle Wine Estates
integrated Microsoft Dynamics 365 Commerce into
each of its wine brands. For each of its wine brands to
consistently deliver the luxury experience Ste. Michelle
customers expect, and stand out from its competitors,
the wine estate leveraged Commerce to combine
its customer data from across each of the brands
websites, email campaigns, and social. In doing so, Ste.
Michelle is able to provide experiences tailored to each
customer at scale across each of its customer touch
points, resulting in increased sales and conversion
rates, and greater trust and loyalty among its existing
customers.
chateau.ste.michelle/microsoft.com

Snapchat Dynamic Ads

AI-targeted ads automatically update based on a
consumer’s interactions

Social media network Snapchat’s dynamic ads are

continuously updated to reflect current product
catalogs and automatically target users based on their
past behaviors. Launched just before the 2019 holiday
season, the ad program automatically selects different
items from the brand’s retail catalog to be shown,
in-ad, to targeted groups of consumers. This dynamic
advertising format helps marketers automatically
optimize their ad buys and speak to shoppers’ interests
in real time.
snapchat.com

Wegmans
Digital promotions tailored to shoppers’ previous
purchases via machine learning

New York-based grocer Wegmans Food Market has

updated its website and mobile app to provide grocery
shoppers personalized product recommendations and
search results based on past purchases. As shoppers
build their personalized shopping list either via the
Wegmans app or website, they’ll receive digital
promotions tailored to them. Additionally, shoppers will
experience more personalized search results when they
use the grocer’s digital tools, as the integrated machine
learning technology takes preferences and past orders
into account.
wegmans.com

24 Retail Trends Playbook 2021 in collaboration with

 Know Your Customers

Deliver Proactive Service

& Support
As retailers and brands take advantage of Supporting Data:
internet-enabled technologies alongside AI to 63% of online shoppers
better track and respond to shopper behaviors, are more open to sharing
purchasing habits and broader contextual personal information
cues, service will shift from reactive to if it means brands and
retailers can better
proactive. Customers will seek out companies anticipate their needs.
who are equipped to offer this next level of Shoppers Demand Superior
personalization, which will evolve towards just- eCommerce Experiences: Consumer
Expectations in 2019. Avionos, 2019
in-time assistance and predictive care.

Customer journey
analytics are expected
to grow to nearly $25.93
billion by 2026.
Global Customer Journey Analytics
Market Opportunities, Verified Market
Research, 2019

25 Retail Trends Playbook 2021 in collaboration with

 Examples:
Powershelf
IoT-connected ecosystem ensures optimal inventory levels
at scale

To create a complete ecosystem that connects shelves

to stockrooms, checkout and distribution in real-time,
retail technology solutions provider Powershelf partnered
with Microsoft, in turn creating a platform that provides
second-by-second sales, stock, and logistics that can all
be seen, analyzed, and controlled from anywhere in the
organization. Each in-store Powershelf product continually
communicates critical data through the Microsoft Azure
cloud. Microsoft Power Platform then helps Powershelf
compile the data, analyze it, and communicate it back to
consumer products companies—in real time. By providing
decision makers with real-time visibility of when and where
stock is low, enterprises are able to efficiently anticipate
restocking needs at scale, communicate with stockrooms
and distributors in a timely manner, and ensure customer
happiness.
powershelf/microsoft.com

Schmidt’s Naturals
Real-time consumer sentiment leveraged to refine
products

Unilever-owned deodorant company Schmidt’s Naturals

uses an AI-powered platform named Alexander to
respond to customer service questions on its social
and email channels. Not only does Alexander improve
the brand’s customer response times by composing an
email in milliseconds compared to minutes, but it also
monitors brand sentiment on social platforms and engages
in customer conversations at appropriate moments.
Alexander’s interactions are monitored and edited by a
team of employees who also oversee the AI’s training
based on customer responses. As Alexander learns
from feedback and refines its responses, the platform is
expected to be rolled into other Unilever-owned brands.
schmidts.com

Erica by Bank Of America

AI-powered assistant preemptively provides personalized
offers

Financial institute Bank of America incorporated its

consumer-facing chatbot, Erica, into its newly launched
mobile banking app. The AI-powered banking assistant
takes a proactive approach to sending customers
personalized offers and services that best suit their
current needs. Within the mobile app, banking customers
preemptively receive personalized recommendations
from Erica. Should they choose to learn more, the chatbot
is able to share detailed advice on potential savings
customers could realize through specific Bank of America
services and promotions.
bankofamerica/erica.com

26 Retail Trends Playbook 2021 in collaboration with

 Know Your Customers
Digital Transformation Strategies
Go beyond transactional Experiment with Leverage end-to-end
messaging by embedding subscription-based data visibility to gain
meaningful experiences models and proactive real-time insights into
within the context of notifications to ascertain product usage in order
your marketing to help if these added value to strengthen shopper
customers take action services are important to profiles and allow for
and achieve their goals. your customers. greater personalization.

Intelligent Retail In Action

Intermarché
Through its collaboration with Microsoft and partners Accenture, SGS, and
Transparency One, French grocer Intermarché is leveraging its supply chain data
to provide Intermarché shoppers with a transparent view of where their produce
originated. By combining its supply chain data with Azure Machine Learning and
eventually other Azure AI services, Intermarché will be able to personalize product
offers and promotions to shoppers at scale based on their dietary preferences
or allergy restrictions, such as low-cholesterol or dairy-free diets. By providing
its customers with a personalized digital grocery experience, Intermarché will be
able to leverage the made-for-me-moments that inspire loyalty within today’s
consumers.

intermarche/microsoft.com

27 Retail Trends Playbook 2021 in collaboration with

 2Empower Your
Employees
A superior retail experience starts with “It is all about relationships.
developing a frontline workforce that is Knowing the clients well
knowledgeable and passionate about enough to anticipate their
products and empowered to solve any every need and combining
problem. Companies are investing in this with value-adding
collaborative communication tools products and services.”
and data-powered equipment that Marina Lefkaritis, Private Shopping Director,
MatchesFashion.com
democratizes access to information,
making analysis readily available to
everyone within a company to deliver a
more personalized experience.

28 Retail Trends Playbook 2021 in collaboration with

 Empower Your Employees

Provide 360-Degree Customer

Profiles To The Frontline
Despite collecting a variety of insights on Supporting Data:
individual shoppers from their online browsing “The ambition of using
behaviors, purchase history, loyalty membership data is not just to
and location, most companies fail to develop automate away, but really
this information into an actionable customer to equip [employees] with
tools and insights that
view. New platforms are bringing these details let them do things they
to the forefront of retail interactions, enabling wouldn’t otherwise be
associates to recognize their customers and able to do.”
deliver personalized service and advice to Brad Klingenberg, Chief Algorithms

improve the sales or service experience. Officer, Stitch Fix

“As AI helps leaders

tackle operational tasks
more effectively, they can
better shift their focus on
empowering their people.
This means trusting
people to approach
challenges in their own
way and ensuring they are
equipped to be at their
best. In short, leaders
can more effectively shift
from being managers to
mobilizers.”
Michel van der Bel. President, Microsoft
EMEA

29 Retail Trends Playbook 2021 in collaboration with

 Examples:
Michael Hill
Predictive analytics power personalized retail
experiences

In order to incorporate predictive analytics into its

customer experience, global jewelry chain Michael Hill
partnered with Microsoft Dynamics 365 when it moved its
in-house IT system to a cloud-based platform. Integrating
data from multiple sources into a single view, the
Dynamics 365 platform is able to provide Michael Hill sales
associates with a complete customer profile, including
past purchases--both in-store and online--along with
preferences and previous budgets, helping employees
provide more guided recommendations for each customer
across all of Michael Hill’s retail touchpoints. By layering
AI and machine learning on top of its cloud environment,
Michael Hill is able to apply predictive analytics to its
customer profiles, taking sales associates’ informed
recommendations one step further.
michaelhill/microsoft.com

REVOLVE x Snap+Style Business

Integratable CRM tool enables stylists to make
personalized recommendations

Online fashion retailer Revolve partnered with

technology platform Snap+Style Business to create
a personalized digital shopping CRM tool to inform
online conversations between stylists and customers.
Using the S+SB’s StyleWidget, Revolve’s fashion stylists
can review customers’ past purchases and automated
recommendations to suggest new products for buyers.
According to the Revolve team, this partnership
accelerated the turnaround time for online product and
style recommendations by stylists by almost 50%.
revolve.com

Nordstrom
Intelligent digital platform creates a more personal
customer experience

Fashion retailer Nordstrom adopted live chat, messaging

and an AI platform designed to digitally track and engage
with online shoppers based on their in-the-moment mood
and stage in the shopper journey. In a gamified digital
window, customer service agents are able to view the
shopper’s current cart, search history and past purchases
as they browse. Should a shopper decide to chat with
one of the service agents, the platform measures the
shopper’s sentiment by analyzing their word choice and
determines if the shopper is frustrated, happy or hesitant,
in turn providing agents with the non-verbal cues that
online conversations usually lack.
nordstrom.com

30 Retail Trends Playbook 2021 in collaboration with

 Empower Your Employees

Embed Intelligent Assistance

Inside Remote & Physical
Workflows
As new merchandise arrives, special offers Supporting Data:
change and inventory levels fluctuate, sales “The needs of our
staff are required to constantly update their associates in supply
knowledge base from shift to shift and even chain are evolving, and
hour to hour. Given the dynamic nature of the we want to set them up
for success. Skills needed
retail environment and demands on their time, today are different than 15
this can prove to be a challenging task. To help or 20 years ago.”
employees better respond to immediate issues Steve Miller, Vice President of Supply
Chain, Walmart
or improve the store operations with a forward-
looking view, companies are equipping their “Retailers are seeing
employees with AI-enabled tools that provide the need to emphasize
in-the-moment access to key information and operation excellence in
analytics and streamline communications their digital strategy.
That’s where it pays to
between staff. focus more on simplified
workforce communication
and task management.”
Will Eadie, Global Vice President of
Sales and Alliances, Workjam

31 Retail Trends Playbook 2021 in collaboration with

 Examples:
IKEA
AI-enabled portal connects entire headquarters at
anytime, in any place

Recognizing its workforce as 160,000 problem solvers,

Ikea’s dedication to helping its frontline workers feel
empowered and supplying them with the tools to do so
led the global furniture supplier to partner with Microsoft.
With Teams, Ikea is able to virtually connect all of its
employees across teams and departments. By creating
a cohesive and efficient communication flow, Ikea’s
management teams, frontline employees and distribution
centers are able to connect, co-create and problem solve
in real-time, no matter their location. Streamlining all
employee communications into one portal, Teams has
been able to help Ikea’s employees respond to immediate
issues, in turn improving overall operations.
ikea/microsoft.com

Walmart’s Intelligent Retail Lab

Connected store creates a closed operational loop

Retail supermarket Walmart’s Intelligent Retail Lab

gathers real-time information about what’s happening
inside the store through an array of artificial intelligence-
based sensors, cameras and processors to improve its
operations. Applying AI to the in-store experience, the
supermarket is able to leverage the collected data to
make informed decisions regarding product inventory and
availability, creating an overall more positive customer
experience. Equipped with real-time information,
employees know more precisely when to restock
products, inspiring consumer confidence and ensuring
product quality throughout the store.
intelligentretaillab.com

Old Navy
Connected devices allow for instantaneous customer
service fulfillment

Connecting employees and inventory in real time, Old

Navy’s in-store tech rollout includes mobile devices
for each employee, on which a host of apps allow
them to view live inventory stocks, and where to find
replenishment in order to actively fulfill BOPIS orders as
they roll in. ‘In Stock On Shelf’ directs employees to the
exact item a customer needs, while should an item be
out of stock the ‘Order In Store’ app allows employees to
order, ship and checkout with customers in a one-on-one
experience.
oldnavy.gap.com

32 Retail Trends Playbook 2021 in collaboration with

 Empower Your Employees
Digital Transformation Strategies
Provide associates with Explore how partner Equip your sales associates
in-depth training with tools technologies can be tailored with digital tools that
and technologies that will to effectively address connect them to customers
be used in their day-to-day your employees’ most virtually, and also provide
roles common and labor-intensive them with a profile of each
challenges, and encourage shopper, including online
greater collaboration from order/browsing history,
any location past purchases, etc, in
order to offer more relevant
recommendations
Consider how data or Integrate AI into these
information is displayed to platforms to proactively
ensure its digestible and serve information or alerts
actionable for associates and add an additional layer
and managers. of analysis.

Customer-First Retail In Action

Office Depot Office Max
To better connect its global workforce of 38,000 employees and improve company-wide
solution adoption, office supply retailing company Office Depot integrated Microsoft Teams and
Yammer into their company’s onboarding process. In order to successfully transition its workflow
onto Microsoft 365 and effectively create a culture of digital-first collaboration, Office Depot
created a full-scale launch event, where hands-on experiences demonstrated how employees
could seamlessly work directly in the Teams platform to collaborate on Excel worksheets, Word
documents, and PowerPoint presentations. Further, whenever Teams receives new features,
Office Depot offers 60-second demonstration videos based on employee-submitted questions
to keep employees up to date. Since implementing Teams, Office Depot has realized increased
efficiencies in communication, and seen a 37% reduction in email volume.

Within its retail locations, Microsoft Yammer also plays a pivotal role as the primary
communication tool for Office Depot retail associates, allowing them to communicate across
physical locations. Through the platform, regional managers are able to share best practices,
solutions and techniques between stores, while sales associates are able to effectively
communicate on the floor via mobile devices. By developing a cloud-based culture, Office Depot
has not only improved security, processes and collaboration, but enabled its employees to
collectively work in a seamless manner no matter their location.
officedepot/microsoft.com

33 Retail Trends Playbook 2021 in collaboration with

 3Enable An Intelligent
Supply Chain

The optimal infrastructure is crucial for “Our customers are

retailers to reduce costs, meet rising embracing IoT as a core
consumer needs and improve communication strategy to drive better
between suppliers and partners. Retailers are business outcomes, and
adopting a 360-degree view of their entire we are heavily investing in
supply chains—from raw material acquisition this space committing $5
to production to last-mile delivery, by billion in IoT and intelligent
adopting intelligent, data-driven processes to edge innovation by 2022
not only predict inventory and aptly respond and growing our IoT and
to consumer expectations, but synchronize intelligent edge partner
information sharing amongst all members of ecosystem to over 10,000.”
the supply chain. Sam George, Corporate VP of Azure IoT,
Microsoft

34 Retail Trends Playbook 2021 in collaboration with

 Enable An Intelligent Supply Chain

Build A Connected Organization

Where Everyone Can Share From
Anywhere
Retailers are sitting on a wealth of data, Supporting Data:
but these valuable insights often get lost “The brands that really
between disparate teams and siloed channels. struggle are those that
Data-driven communication channels and operate online and in-
omnichannel solutions can help optimize store in silos, on systems
that were never built with
fast and responsive communication between other channels in mind.
factories, warehouses, stores and other supply The key to omnichannel
chain elements, sharing key information is having a single system
between partners through cloud infrastructures for real-time omni data—
inventory, customers and
and keeping everyone on pace to deliver orders.”
excellence. Stephan Schambach. Founder And
CEO, NewStore

“Cloud shift is not

just about cloud.
Organizations embracing
dynamic, cloud-based
operating models
position themselves
for cost optimization
and increased
competitiveness.”
Ed Anderson. Distinguished Vice
President Analyst, Gartner

35 Retail Trends Playbook 2021 in collaboration with

 Examples:
Xbox
Single platform connecting IoT devices streamlines
delivery operations

In order to track and monitor shipments’ conditions for

shock, light and temperature and identify product damage
in real-time, anywhere, at scale, the supply chain team
behind video gaming brand Xbox and Microsoft Surface
designed a supply chain visibility solution on Microsoft
Azure IoT Control. Providing visibility from plant to store
delivery, the supply chain team is able to both ensure
each of its products arrive intact, and connect with
manufacturers, distribution centers, logistics providers,
and carriers to address shipment conditions in real-time.
By creating end-to-end, track-and-trace capabilities the
supply chain team reduces the risk of loss, minimizes
delays, and empowers other businesses to adapt to
dynamic global conditions.
xbox/microsoft.com

H&M Group
AI operations deliver greater efficiency throughout the
supply chain to better align supply and demand, and
create a circular supply loop

By optimizing and connecting its stores, warehouses

and fulfillment operations, H&M Group is able to ensure
the right product is in the right place at the right time
and transported to the optimal warehouse. The retailer’s
connected operational viewpoint allows for accurate
demand forecast, in turn eliminating wasted resources and
creating fewer emissions through optimized fulfillment.
hm/microsoft.com

Target
Optimized inventory system makes restocking more
efficient

Big box retailer Target is developing a new inventory

planning and control system to allow shelves to be
restocked more efficiently. The system will be able to
locate inventory positioning more precisely throughout
the supply chain, allowing Target to reduce the amount of
excess inventory in store backrooms and better organize
shipments. These changes are expected to minimize
the number of footsteps needed to restock sales floors
and reduce the number of hours employees spend on
replenishment.
target.com

36 Retail Trends Playbook 2021 in collaboration with

 Enable An Intelligent Supply Chain

Build Agile Inventory &

Operations Resilient To Rapid
Change
Companies are continuously collecting a wealth Supporting Data:
of data about their shoppers, their stores and “With our customers, we’re
the broader marketplace, but they often lack seeing the early signs of
the internal capabilities and creative insight to realizing benefits through
put it to use. Successful brands and retailers AI, most often through
improved product quality,
are differentiating themselves with data-led production and supply
initiatives that enable them to quickly adapt chain efficiencies, and
or even anticipate shifts to be first to market the effectiveness of their
with new products inspired by local purchase service operations.​”
patterns to better serve the needs of their Chris Harries. Worldwide Manufacturing
customers. Industry Solutions Director, Microsoft

“The accuracy of inventory

needs to be really strong. If
you’re taking orders on the
website for items that you
don’t have the inventory for,
because the inventory is not
accurate or it’s in the wrong
location, there will be a lot
of work on the [packing]
floor that can’t get through
the next phase of the
process … everything gets
held up.”

Adrian Kumar. Global Head of

Operations, Science & Analytics, DHL
Supply Chain

37 Retail Trends Playbook 2021 in collaboration with

 Examples:
Starbucks Deep Brew
Personalized recommendations also predict demand

Within its mobile application, coffee chain Starbucks

is using reinforcement learning technology to offer
customers personalized coffee suggestions—which
also inform inventory planning at local Starbucks
locations. Starbucks uses Microsoft’s Azure platform
to power its Deep Brew initiative, which generates
custom food and drink recommendations based on
time of day, previous orders, and contextual factors
such as weather. This recommendation engine is
also used to forecast demand for local Starbucks
stores, impacting inventory and replenishment orders,
predicting staffing needs and anticipating equipment
maintenance.
starbucksdeepbrew/microsoft.com

Nike Live
App-connected ‘local’ stores create dynamic merch
experiences and offer seamless fulfillment solutions

Sportswear brand Nike stocks its Nike Live concept

stores based on shopping data from local customers,
allowing stores to quickly adjust inventory according
to demand. Using data collected from its NikePlus app,
each store’s merchandising mix is dictated by items
local consumers are buying. Every two weeks, the
store adds new inventory based on the local market’s
purchasing trends (compared to the traditional
turnaround time of 30-45 days). When customers
place an order for pickup through the NikePlus app
and select one of the Nike Live concept stores, they’re
able to take advantage of the store’s curbside pickup
service, or can collect their order from an app-
accessible set of lockers located within the store.
nike.com

IKEA
Real-time supply chain decisions reduce waste from
returns

Homewares retailer IKEA is analyzing supply chain

data in real time to improve its returns management
process, reducing the company’s overhead and
environmental impact. At 10 IKEA distribution centers
and 50 retail locations, machine learning software is
used to route returned and excess inventory to the
optimal tail location within the company’s network.
By making in-the-moment adjustments to its reverse
logistics, IKEA reduces operating waste and costs
while funneling inventory to the retailer’s highest-value
channels.
ikea.com

38 Retail Trends Playbook 2021 in collaboration with

 Enable An Intelligent Supply Chain
Digital Transformation Strategies
Determine what data Use technology, like Use machine learning
to solicit from local beacons or RFID, to in order to track what
shoppers, both online and better optimize store consumers purchase and
in store, in order to tailor layouts and inform ideal, return, enabling you to
your inventory and even social distance compliant refine your inventory
your products to each traffic flows, while also selection and get new
market gauging customer interest products to market
and merchandising more quickly based on
effectiveness consumer demand.

Avoid oversaturation Augment the power of

of data collection by predictive algorithms with
identifying key questions human thinkers, customer
and appropriate metrics feedback and qualitative
for collection and analysis. analysis to achieve more
thorough, balanced
forecasts.

Customer-First Retail In Action

Walgreens
U.S. pharmacy chain Walgreens transformed its operations and accelerated decision
making within its supply chain by moving its on-premises data warehouse to Micro-
soft Azure Synapse Analytics in the cloud. Users can consume the data through a
web app developed in-house, providing Walgreens with a 360-degree view of its in-
store and online data in real time. By providing key decision makers with a complete
view of inventory and purchasing trends, Walgreens is able to generate insights that
help stores correctly stock the products consumers want, efficiently manage inven-
tory levels, and make more informed, data-driven business decisions.
walgreens/microsoft.com

39 Retail Trends Playbook 2021 in collaboration with

 4Reimagine
Retail
Brands and retailers are underpinning “Organizations are largely still
storefronts and digital touchpoints with finding a path that balances
improving current operations
a baseline level of data collection that with the opportunities afforded
analyzes and responds to customers’ by Industry 4.0 technologies for
micro and macro-needs, in order to innovation and business model
deliver a customized and convenient transformation.”
shopping experience at scale while Tim Hanley, Global leader, Industrial Products &
Construction, Deloitte
gathering insights for businesses to
create a powerful toolkit to market their
“Understanding 1) the nuances of
products to shoppers. By seamlessly what consumers expect, 2) how
integrating web and app-based digital they actually engage with brands
channels into the in-store experience, via a myriad of digital channels,
and 3) integrating these in-
retailers cannot only elevate customers’
demand channels seamlessly to
purchase journey, but power end-to-end deliver digital-first omnichannel
omnichannel analytics capabilities. experiences, are the keys to
sustainable growth.”
Paul Jarman. CEO, NICE inContact

40 Retail Trends Playbook 2021 in collaboration with

 Reimagine Retail

Synchronize Digital And

Physical Data & Systems
As personalization and recognition across Supporting Data:
channels becomes a greater expectation “What these customers
among shoppers, retailers and mall operators want is omni-channel
are creating systems that ‘log’ customers into personalization —
whether they interact
physical stores. When customers enter, the via a website, an app,
system automatically triggers recommendations email, SMS, in-store and
and in-store activations, and informs assistants so on. They want to be
to deliver personalized service, all while treated uniquely. That’s
where brands can use the
simultaneously syncing customer experiences entire data stream, those
both on- and offline. Moreover, stores are digital footprints that their
increasingly adopting AI-powered and voice customers are leaving.
enabled devices to provide these seamless, You can use machine
learning and algorithms to
connected, and tailored experiences customers predict what future action
now expect, at scale and through contactless the customer is likely to
solutions. take, what is the next
best action the customer
should be prodded
towards. That’s the world
of personalization that is
coming up.”
Rajesh Jain. Founder & Managing
Director, Netcore

Most consumers,
93%, want seamless
omnichannel experiences,
and yet they are
increasingly giving
companies a poor rating
on seamlessly switching
between channels–73%
give companies a poor
rating, up from 67% in
2018.
Customer Experience (CX)
Transformation Benchmark, Global
Consumers. NICE, 2019

41 Retail Trends Playbook 2021 in collaboration with

 Examples:
The Home Depot
End-to-end commerce platform triggers personalized
product recommendations

Home improvement retailer The Home Depot partnered with

Microsoft PromoteIQ to maximize its 170 million monthly
digital visitors. With Microsoft PromoteIQ, The Home Depot
is able to manage and scale vendor-funded digital marketing
efforts both online and in-store. The Microsoft PromoteIQ
platform includes an analytics suite to deliver audience
insights and help The Home Depot’s brands understand
incremental sales lift. Now, customers visiting The Home
Depot digitally are presented with relevant advertising
for products they may need for their home improvement
projects alongside content for complementary projects like
décor to complete their room. Since the program launched,
The Home Depot has experienced a 35% gain in customer
engagement and promoted products have seen double-digit
growth compared to 2018.
thehomedepot/microsoft.com

Harvey Norman
AI-powered digital advisors create product-specific, geo-
tagged push notifications

Australian retailer Harvey Norman became the world’s first

retailer to launch the Microsoft Synchronized Shopping
solution, an AI-powered retail software concept that
facilitates a seamless online and offline experience. Shoppers
who visit the Harvey Norman website can access an AI-
powered product advisor who guides them through a series
of questions in order to assess their individual needs and
recommend Microsoft laptops and other devices that best
suit them. Once the shoppers have selected a short list of
devices, the website creates a shopper pass that is stored
in their Apple Wallet or Google Pay app on their mobile
device. The shopper pass then uses geo-location to push a
phone notification once a customer enters the store, helping
to efficiently guide them to the location of the PC models
that were recommended by the online advisor, ultimately
reducing time spent in-store and the need for unnecessary
employee interactions.
harveynorman/microsoft.com

Knot Standard
Virtual studio informs customers’ curated in-store styling
sessions

Luxury menswear brand Knot Standard created an in-store

‘Style Wall,’ which uses AI and voice to offer customers a 3D
virtual studio. Shoppers start by booking an appointment
online and are paired with a stylist. Upon arrival, the giant
‘Style Wall’ screen displays content tailored to their particular
interests. For returning customers, their order history and
preferences will also be displayed, along with personalized
suggestions. The wall responds to more than 200 voice
commands, allowing shoppers and their stylist to examine
and customize every part of their outfit, from shirt cuffs to
fabrics.
knotstandard.com

42 Retail Trends Playbook 2021 in collaboration with

 Reimagine Retail

Leverage Real-Time Insights To

Drive Innovation
In an effort to better understand and
respond to the nuances of their customers,
organizations are deriving insights from
product interactions, loyalty engagement
and shopper feedback to identify areas
for improvement. This information is then
translated into actionable strategies that can
inform decisions around product curation
and recommendations, flexible rewards
programs and technology investment to
continually refine the front-end experience
and ensure customer needs are always top of
mind.

Supporting Data:
“We needed to innovate how we innovate, because
we clearly were not delivering against our growth
goals, and we needed to make an intervention.
Moving from attitudinal data to behavioral data, the
learning is just much more robust and gets you to a
better place faster.”
Kathy Fish, Chief Research, Development and Innovation Officer, P&G

“It’s all data all the time. Data never sleeps. We’re
constantly generating information that’s coming in
from the consumer, from our audiences, and from
people who interact with our value proposition
phase of the process … everything gets held up.”
Amber Hameed, VP Information Systems, Dollar Shave Club

43 Retail Trends Playbook 2021 in collaboration with

 Examples:
Choosy
Real-time data informs on-demand product development

Fashion brand Choosy gathers real-time trend data from

social channels and translates this information into fashion
designs to be produced on demand. Choosy uses a
combination of in-house style scouts and AI to analyze 95
million Instagram daily. After trends are identified, Choosy’s
design team produces product samples in as few as three
days and makes them available for shoppers to buy through
twice-weekly drops on its website. Shoppers have only a
few days to purchase the looks, which are manufactured
to order and shipped to customers within two weeks of
purchase.
getchoosy.com

Procter & Gamble

Iterative testing delivers impactful product design

CPG giant Procter & Gamble is embracing ‘lean innovation,’

launching new products quickly and refining them via
iterative testing. This allows them to innovate more quickly
than their traditional approach, which required extensive
consumer research and testing before a new product was
introduced to the marketplace. By launching ‘minimum
viable products,’ P&G is able to introduce new products to
market more quickly and gain real-world feedback, much
as a smaller, more nimble DTC brand would approach
innovation. One product P&G launched through this
method is Charmin’s Forever Roll, a commercial-size roll of
toilet paper that would allow consumers to not change the
roll as often, which was launched after testing via Facebook
and Instagram ads.
pg.com

44 Retail Trends Playbook 2021 in collaboration with

 Reimagine Retail
Digital Transformation Strategies
Design stores with Review customers Establish multiple
visitor recognition in behavioral maps across channels to share
mind, in order to reduce platforms to identify customer insights
unnecessary contact products they gravitate and feedback with
between customers and towards, best fitting teams for actionable
associates, better assist sizes and views before implementation—from
customers in efficiently purchase—creating a organization-wide
locating desired items comprehensive shopper regroups to on-demand
and tailor current offers profile. snapshots.
and digital signage on a
one-to-one basis. Compare customer
data across commerce
Customer-First Retail channels to glean
insights that inform
In Action merchandising, store
flows and loyalty
Trakomatic programs, among other
Trakomatic is a Microsoft partner in Asia that is digi- processes.
tizing brick-and-mortar stores with its Azure AI-based
solution that provides hyper-personalized shopping
experiences to customers at scale. Once a shopper opts
in by signing up for the service, they have the option of
adding their photo image to their profile. If they do, Tra-
komatic’s video analytics, AI-powered facial recognition
and intelligent sensors, all on the Microsoft Azure cloud,
do the rest, recognizing them as they enter the store
and personalizing the experience--from targeted offers
delivered to their smartphone and digital signage that
changes based on their preferences to alerting store
associates so that they are able to provide a one-on-one
experience. Along with providing an enhanced customer
experience, Trakomatic’s tools are able to measure and
improve marketing campaigns’ effectiveness, track con-
version rates, and help retail associates better manage
and forecast location and day-specific traffic.
trakomatic/microsoft.com

45 Retail Trends Playbook 2021 in collaboration with

 Roadmap To Success:
Key Questions To Guide
Intelligent Tech Investment
Data-driven technologies are essential for responding to today’s accelerated consumer
needs and creating a differentiated shopper experience that is integrated throughout
the digital and store experience. However, simply investing in a suite of solutions won’t
instantly translate into success without first having a strategic vision in place. Having
a fundamental understanding of your brand, customers and the experience you aim to
deliver can ensure the technologies you apply to the retail experience add value and
are executed with integrity.

When customers think of your brand, what feelings, ideas and solutions
come to mind?
Defining how your brand engages with its audience and presents its offerings is the
first step in deciding what technologies to apply and how you can integrate them into
your organization.

How can you differentiate yourself in the marketplace?

Understand the elements of your retail or brand experience that make you stand apart
from the competition to lead you to develop the correct tech-enabled strategies to
accentuate your strengths and core values.

How can you leverage technology to maximize your strengths and diminish
customer pain points?
Technologies cannot only help optimize and deliver an elevated experience that
your brand is known for, but also resolve areas of friction customers face along the
purchase journey.
How can you communicate your plans throughout the organization
and beyond?
Ensure your teams understand a standard, consistent narrative about the digital
transformation journey your organization is pursuing. Communicate the goals,
technologies and opportunities present with this new era of retail, not only with your
employees, but customers as well.

46 Retail Trends Playbook 2021 in collaboration with

 About Microsoft Microsoft enables retailers to deliver personal, seamless,
and differentiated customer experiences by empowering
people, enabling digital transformation, and capturing
data-based insights to drive growth.

Learn more about intelligent retail at microsoft.com/retail

About PSFK An Introduction To PSFK:

PSFK is the world’s leading business intelligence platform

for innovation in retail. Across every major industry
vertical, we help the most progressive brands identify and
leverage new customer experience opportunities through
a mix of trend reports, immersive events, insight-rich
content, ideation workshops and on-demand research
services.

psfk.com

Contact For more information on our services:

Membership PSFK
Jeff Weiner 536 Broadway, 11th Floor
Jeff.Weiner@psfk.com New York, NY 10012 USA
+1 646 520 4672
Bespoke Services
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Piers.Fawkes@psfk.com

Team Director of Research &

Strategy
Design
Alex Brooks
Scott Lachut
Scott.Lachut@psfk.com

Project Lead
Lauren Lyons

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