This article was originally published on CIO Review May 2017 Issue.
Today, the success of retailers not only hinges on a seamless shopping experience but also how well consumer activity is tracked, recorded and used. Customers today have more power and choices than ever before, and expect the best user experience both online and offline. With these developments in the background, the retail industry today seems to be on the cusp of both industrial and customer revolution.
With its complex and diverse business processes and requirements, the retail segment has exhibited immense dynamism, despite which, the segment is faced with a myriad of challenges such as countering multiple disruptive technologies and increasingly demanding digital-customers.
Factoring in these developments with the swiftly changing environment, the CIOs and CXOs need to walk hand in hand with the technological and operational evolution. Needing to focus on changing the business rather than simply running the business, with a strong focus on innovation.
Revolutionizing the retail segment, there have been some retail players who have already looked out for their evolution. Aimed at getting future ready, these retailers are launching new store formats combined with multiple selling channels viz. Kiosks, Online, and Call Centers etc. They not only have multiple selling channels, but they are also offering seamless shopping experiences through every channel, transforming retail organizations into a truly omnichannel business. Having made the allowance for such evolution, there are certain technological trends that will continue evolving and leading the segment.
The Omnichannel Customer Experience
Customer experience is becoming a key differentiator for retailers, over price and product. Retailers continue to invest in newer channels and assess the ROI on each of them. However, with each additional channel, managing seamless customer experience across different touch points becomes progressively difficult.
Seamless customer experience across channels cannot be achieved unless one has a unified platform. That is the nexus for all customer experience. Many merchants realize the need for this; though most have admitted to not having the technological capabilities required to make it happen.
The disparate systems that operate in their own silos will no longer be preferred and with advancements in handheld devices and network infrastructure, unified systems on the cloud will evolve that will eliminate the need of multiple system integrations. Some of the forward-looking requirements are –
- Single identity across channels
- Unified order management
- Single inventory visibility across stores, warehouses
- Unified promotions, communication strategies, and channels
- Unified analytics and insights
O2O (online-to-offline and vice-versa) is an integral part of the omnichannel strategy. Amazon Go in the US and Myntra’s brand store in India are classic examples of engaging with the customers across channels seamlessly.
Big Data for Consumers
In the omnichannel retail world, fragmented analytics will not suffice. A natural expectation with technology would be to gather, organize and analyze all kinds of data, namely, transactional, behavioral, price changes, store staff performance, footfalls, stock management, campaigns, and loyalty etc. across channels. With fragmented analytics, data to action analytics may take several days, causing business loss to the retailers.
In order to reduce time taken to arrive at actions, industry is moving towards predictive and prescriptive analytics with actionable insights from traditional diagnostic analytics For e.g., if the performance of a store is going down and it is less likely to hit the monthly target, the analytics tool should be able to make the store staff aware and suggest several corrective actions to achieve the target.
Software in Customer Delivery
Catering to the ever growing demands of consumers, in terms of product and service delivery, is another aspect that the retailers are focusing on today. Using technology, these retailers are making efforts to reduce waiting time by providing real-time delivery options, choices of a time slot, notifications by emails and SMS’s etc. However, led by evolution, retailers are using software like field service management for before-time workforce scheduling. They are also using route optimization software for swift deliveries. Consistently adding value to their services, retailers are introducing new delivery options for various channels such as click and collect, premium same day service, hyperlocal, etc. Taking these services a notch higher, retailers have now started focusing on one-hour delivery services as well.
CRM and Consumer Engagement Solutions
The success of a CRM strategy will depend on the ability of analytics data warehouse to provide automated actionable insights and will have the above expectation of unified data. CRM intelligence such as segmentation/micro-segmentation will be further refined on the unified data to better understand customer behavior and customer triggers that drive them to make a purchase. As the customer migrates to a different channel, CRM will understand and adjust accordingly. The customer engagement solutions will understand customer likes/dislikes at a deeper level and suggest marketing manager’s necessary adjustments.
Different retailers will have different success rates on different channels. The channel communication cost and ROI will be a useful feedback to assess the tradeoff between incremental sales and channel communication cost in addition to the cost of the transaction. CRM solutions will also largely head towards personalizing channels and effectively managing customer experience across channels. The channel engagement strategy will be personalized heavily based on customer’s past purchases and behavior.
Serving Every Order Through Inventory Management
Technology innovations, such as endless aisle, and in-store Kiosks that allow customers to order products, which are no longer in store, keeps retailers from loss of sale, besides improving the breadth of their inventory. With such technology, out-of-stock situations will become history.
Enabling Multifaceted Customer Payments
Offering quality products, accurate products, timely delivery, and range of products to choose from, although play an important role in the success of any retail business, a seamless, secure and convenient payment option nails it. Corresponding to such demands, some retailers have now started accepting multi tender, multi-currency, coupons and customer loyalty cards online. They also link verified customers to transactions for efficiency and security. These endeavors by retailers are making payment process more agile and seamless.
The Emergence of Artificial Intelligence
AI has a dual role to play in the retail segment, while at one end it gives a deeper understanding of individual customers, on the other end it is also facilitating deeper reasoning of the overall business performance.
To give a better perspective on things, AI at the customer level, aids in offering a personalized experience, taking customer engagement to newer heights. This consequently adds to the number of sales and loyalty for retailers. Likewise, at a business performance level, AI technology is enabling retailers to identify the exact reason, hindering better performance, which further aids in better decision-making. With such continuous evolution, the retail industry is certain to take over leading industries in India, particularly in terms of GDP.
Online vs Brick & Mortar
One of the most common question these days: “who will win the retail battle – e-commerce or the B&M stores?” has divided the entire world with solid arguments on both sides, but we may not have a clear answer or prediction at this point. The future may not have a single winner, but the gap between the online and offline is reducing to provide the best of both worlds.
Bringing the Two Worlds Closer
VR and AR on the brands’ web-front and mobile apps give customers an alternative to the offline store’s ‘touch and feel’ experience’. Ability to see store availability of the products on websites makes the inventory management more efficient- this concept of ‘reverse showrooming’ has seen a rapid growth in recent times, especially in large appliances, jewelry, electronics and furniture industry.
Similar innovations are seen in the B&M stores where they leverage the online counterpart to enrich the offline store experience. Virtual mirrors, endless aisle merchandising, seamless checkout etc. will take customer experience at stores to the next level. For retailers, the ability to capture offline store purchases and user behavior data would be a huge leap in gaining deep customer insights.
Enhancement in In-store Shopping Experience
The new technologies like Artificial Intelligence, Computer Vision and Deep Learning will drive a radical shift in the way we interpret and capture data from the offline world, which until today was a big void for the offline retail managers to fill. There are many ways in which the offline or the in-store experience can be seen evolving in the near future.
The store traffic data will help brands plan the store staffs at the stores by predicting when and which stores will expect how many visitors, thereby providing better customer experience. It can also enable retail managers to tweak their sales pitch and optimize the merchandise and aisle placement by understanding the conversion rates across demographic segments and traffic hotspots within the store. At an individual level, the technology is not too far from correctly identifying a customer in the store’s vicinity, thus providing the store staff with a very customized and targeted guidance/instruction for every customer.
In totality, the way forward for the retailer is very clear- Technology. In the generation of an omnipresent consumer, being omnichannel is no more an option, but an imperative need. By focusing on a single channel, retailers stand to lose customers, and without being able to track their own customers they may be unable to provide a personalized shopping experience that today’s consumers demand. This lack of insight may also lead to delayed business decisions. By implementing these technological breakthroughs in their business, retailers stand to fulfill customer expectations and provide a rich and seamless buying experience, irrespective of channels. Retailers also gain from valuable insights that allow them to make informed decisions, which result in profitability and incremental returns.