When it comes to a strong relationship between retailer and customer, the golden rule is knowing the customer inside out. It’s an age old notion: meeting the desires of the customer keeps them coming back for more, again and again. Whilst the year ahead presents much for retailers to profit from – the growing popularity of Insta-shopping, heavy discounting and the rise of experiential retail – it also presents many challenges, including the increasing expectations of customers, which stretches far beyond the product.
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 are expecting 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.
Despite much of the industry struggling to cope with changing consumer habits, research shows a concerning lack of productivity from the industry when it comes to investing in change. Despite 74% of retailers claiming they are likely to invest in new technologies, KCOM Enterprise has revealed that only a third (36%) of retail business leaders see digital transformation as a top priority in the next 12-months.
The key to digital transformation is not in using technology alone
In its rise to success, Uber, redefined what we know as the traditional taxi service, positioning itself as a digital, technology-first company. In taking a similar approach, retailers can put themselves in the driving seat to satisfy the generation of shoppers demanding a personal, seamless and convenient experience, above all else.
Digital transformation goes far beyond simply making processes more efficient, it often creates new operating and business models that ensure customers are at the heart of the retail experience. It goes without saying that harnessing technology is critical to digital transformation, but it is important that retailers view this as just one ingredient of the recipe for success. Digital transformation is more than just a buzzword; it’s about using technology to make huge changes to an entire business. To stay competitive in today’s digital world, companies need to commit to transforming into full digital businesses.
Digital transformation requires a cultural shift
Digital transformation is not built on a one-size-fits-all model. Retailers must change the way people work, challenging mindsets and the daily processes they rely on to become more efficient, data-driven and better able to take advantage of more opportunities. But first, they need to figure out what digital transformation means for their business and what their ultimate goals are. By defining the issues first, you can work on the right strategy for your business.
Implementing digital transformation does not simply mean investing and installing brand new technologies as fast as possible. Retailers should not be afraid to aim high when it comes to digital transformation, but no matter the size of the company, implementation should be focused on reaching mindset change from the bottom up, so that everyone in the business understands the need for change and there is a collective willingness to disrupt the status quo. A gradual implementation journey for digital that ensures retailers gain buy-in from their employees is also the right approach for the customers who sit at the heart of the transformation.
Informed planning with the right people
Undergoing digital transformation gives retailers the ability to tailor every product and experience to address the needs and tastes of customers, which, in turn, builds loyalty. New technology, however, relies on a strong underlying network to ensure processes run seamlessly without interruptions or downtime. Research from ByBox recently found that one in three British consumers have experienced some sort of technology failure that meant they were unable to complete their purchase. It goes without saying that this issue will cost retailers significantly, even without factoring in the maintenance costs in resolving unforeseen issues.
We often see connection as linear – once we’ve got it, it’s there. But just as anything else, with too much strain and pressure, network connections can struggle to cope with overloading, so ensuring the capabilities of the network are sufficient for your usage will reduce downtime. It is important that retailers have a clear, thought-out strategy as to how they will implement digital transformation within their company, as well as a realistic timeframe for when each will come into succession.
The retail environment is very similar to the technology industry: it’s fast-paced, driven by consumer demand and everyone wants the next big thing (despite not having quite worked out what to do with yesterday’s idea). That’s why having a technology infrastructure that provides the foundation to get ahead of the curve is imperative to every retail organisation, regardless of size.
Retailers must make commitment to digital transformation
In a competitive and challenging marketplace, retailers must put their stake in the ground, make a commitment to understanding their customers’ expectations and over-deliver with both their in-store and online experiences. With the expectation of a personalised experience now commonplace, leveraging digital technologies is the best way for them to maximise the huge opportunity this presents.
Iain Shearman, MD KCOM NNS