Tech in retail: The year 2018 ahead
The days of the build-it-and-they-will-come in retail are now over. No longer can the construction of either a magnificent brick-and-mortar store, nor the launching of a gleaming online commerce platform guarantee retail success.
Like every other aspect of human commerce, understanding, implementing, and efficiently harnessing technology is pretty much key to creating a strong, growing retail enterprise.
Hot on the heels of the National Retail Federation’s (NRF) event in New York earlier this year, here are Tech HQ’s 2018 take-homes on the future of retail in our digital environment.
The business press is full of calls for digital transformation and the implementation of a technological backbone. What both of these buzzphrases mean is that technology and data now need to form the basis of retail.
Being able to collect information from multiple sources accurately, normalize it (that is, create a platform on which all data is cross-compatible) and use it, will make the difference between the winners and losers in the retail space.
Of course, just the intention of undertaking a digital transformation is not enough. There are several high profile cases in retail recently which show that even during the transformation process, large enterprises can go to the wall.
An excellent place to start is in the so-called back office. Systems exist already which run HR, accounts, business intelligence, CRM and even supply chain monitoring and stock control systems. These systems are essential, but the role of the back office needs to change so it becomes the central repository of data for the entire organization.
To implement this change (to create, effectively, a single ‘point-of-truth) the right software, hardware and, importantly, people need to be in place. The back office has to transform from peripheral and supportive into a data-driven powerhouse for the entire organization.
As Chieh Huang, Founder and CEO of Boxed said during his address at NRF, “The back end is where you live and die. You must own it!”
Customers’ demands are now adding levels of demands on retail organizations which are driving many to the wall. If a retailer cannot provide an omnichannel platform on which its customers transact, the customers will go elsewhere.
The consumer-driven levels of customer service and the required malleability of service provision mean that technology has to be employed to keep track of business processes, even of the most mundane of transactions. Here’s an example:
- Your customer wants to use your service. Do you offer a per-desk, per-user, monthly fee? Short term contracts? Are you able to keep payment details on file, to recharge or refund?
- Customers expect to be able to order goods online and have them delivered to multiple physical locations. Plus, they expect updates by SMS, or via social media as to progress. Your supply chain may need to see where in-transit goods are, and suppliers are increasingly using a just-in-time model of manufacture. Can your retail operation cope?
- In the B2C space, customers want to return goods online, send others back via brick-and-mortar premises, and receive returned monies in the form of refunds, or credit against an account, or both. And all this needs to take place with accompanying communication.
Even huge companies like Adidas are working towards personalized customer offers. It is working with FindMine to use artificial intelligence (AI) to create genuinely personalized product collections. The bespoke is now expected by just about everyone, and that applies too even in B2B contexts.
And the larger the retailer, the more difficult it is to create the personalized service (and offers, and discounts, and more) without the practical use of technology. While single storefronts physically recognize their customers and welcome them by name with a quiet word of a recommendation of a new product line, even wholesalers’ largest customers can benefit from such attentions, and the canny tech-powered retailer knows this.
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Because retail is a truly global concern, the choices of social media and the way it is used vary greatly. From different platforms (WeChat, Line, KaKaoTalk, FaceBook), different languages and different expectations, the myriad of possibilities demanded by customers mean that again, technology has to be implemented to manage social media interactions smoothly.
As the role of the traditional call center declines and an increasing number of people prefer person-to-automata communications for many interactions, technology’s role is becoming one of managing comms and integrating multiple social channels.
Like personalization, this is possible even on a semi-automated basis. But on a larger scale, the software and hardware which can power this function are out there, and it needs to be used.
China is run using a rather strange amalgam of state control and free-market capitalism, the like of which has no parallel anywhere else.
From being a manufacturing powerhouse, the country is transitioning, on the back it’s immense consumer market, to be a retailing pioneer, especially in the use of technology, and the country’s innovative prowess is showing the West the way.
Alibaba and Tencent in particular, the Google and Facebook of the country, should be looked to as an example of how impactful retail can take place. Alibaba, for instance, uses a single sign-on to an enormous ecosystem, which includes multiple retail channels, a host of other communication channels, chat, transport and even review apps. This innovative customer experience is spreading West and retailers would do well two take note as a possible model of the way the future will look.
Alibaba has recently trialed stores which are cashier-less, giant car vending machines, augmented reality games locations, live televised events which run alongside online shopping, and even a virtual reality Macy’s.
The increasing dissemination of information and data is leading to a new generation emerging of data-aware and technologically-savvy young people who are concerned about the effects that big business is seen to be having on communities, and indeed the planet as a whole.
Shinola, Detroit Denim, and Wholefoods, for instance, all told powerful stories at NRF of how they are working with local communities to build successful businesses at street level, providing opportunity and education to the populace, and enhancing local environments. These community-led projects can play influential marketing roles as well as fundamentally doing good in their communities.
In the space of a few short years, technology’s role in commerce, shopping, and retail, in general, has completely changed the landscape. This tendency shows no sign of abating in the medium to long terms, and it is only by embracing technology that retail enterprise can survive and adapt to changing tastes, expectations, and new business models arriving from the four corners of the globe.
23 October 2020
23 October 2020
23 October 2020