There are so many technology solutions available to the retail sector that arguably the most critical step in investing in this area is to separate the technology that will drive business growth from that which will end up being just another toy in the toy box.
In previous eras, technology was considered an office supply job and decisions were delegated to “the tech folks”. With digital infrastructure critical to business success, many companies have paid the price for badly thought-out technical decisions, from poor e-commerce solutions that can’t cope with the peak and trough retail sales cycle through to low-end marketing automation platforms that can’t scale.
The list of potential pitfalls is endless and varied but one constant is that bad technology can cripple a company’s strategic growth. Today, the most progressive businesses view their tech “stack” as being just as important to long-term success as customers and strategy. Nowhere is this more heightened than in retail, an ever-evolving ecosystem with changing consumer habits at its core. But, if retailers thought technology was the only thing to change how they operate, the rise to prominence of millenials will have come as a shock.
The demands of the modern consumer
The age group that has grown up with technology has transformed how brands and customers interact. Communication is driven by images and video on platforms like Instagram and YouTube, while content is shared on WhatsApp and Twitter. There is no trade-off between speed, performance, price and quality: millennials expect the full package and in an age of public rebuke at anything less than peak performance, retailers are walking a very fine line. However, the ‘glass half full’ scenario paints a different picture of a demographic that trusts its peer group more than traditional advertising and is happy to spread positivity. If retailers can solve issues quickly, engage on a personal level with shoppers and deliver a fluid and seamless experience, they will gain the loyalty of a hugely influential section of society.
Of course, the shopping experience today does not end at the checkout. Customers want an experience that follows on naturally from their store visits without any issues. This means it’s not just goods and cash being transacted but also data. Billions of information points – on dwell time, historical purchases and spend, search terms and many more – are now setting the parameters of how we shop. This is placing critical emphasis on establishing a digital infrastructure that is fit for purpose at the core of retail.
How hyperlocal businesses can harness customer insight
Data, the asset it has been able to harness so successfully, is all around every store, individual and location, and comes in multiple forms, be they socio-demographic information, geo-local shopper reviews, influencer blogs, local mobile search or points of interest. Today, retailers can rely on hyperlocal data to pinpoint exactly where to build their stores, determine the right merchandise for each location and send the right products at the right time to optimise supply chains. Using cognitive insights from shopper data, combined with information such as weather, local events or holidays, demand forecasts can be dynamically updated in real-time.
Harnessing this data, transforming it with analytics and discovering new opportunities with AI is the way retail winners will be able to distance themselves from their competitors. Doing it at scale requires a reimagination of business models but will fundamentally change the potential for what can happen in a store. It will convert many more browsers into customers, reduce shoplifting, eliminate lines and make the supply chain more efficient. It will also help to streamline activities in other areas of the business, such as merchandising, operations and marketing.
There’s no doubt that we’re about to enter a new technologically-enabled dimension of retail. The modern consumer demands more now than ever before and there is a critical need for retailers to solve issues quickly and sufficiently to avoid anything less than peak performance. Customer insight is invaluable for hyperlocal businesses and now is their opportunity to harness the potential, not only to make the supply chain more efficient, but also to create seamless shopping experiences for their customers.
By Iain Shearman, MD, KCOM NNS for Retail Sector