Technology for the Retail Sector
For the last decade, technology has been the hot topic of the retail world – increasingly part of every conversation, every strategy meeting, from the boardroom to the sales floor. The impact of the once-called (and almost forgotten) “world wide web” has been substantial, disruptive and game changing. Retailers – from commodity-selling big boxes, such as Walmart, to luxury fashion retailers the likes of Burberry -- have come to recognize that they must now engage their shoppers in very different ways.
Amazon, the disrupter of all disrupters, is the litmus test against which many retailers and many manufacturers now assess their own effectiveness, their pricing, their service levels, and their overall shopping experience. Apple (and increasingly other smart phone and tablet manufacturers) has redefined the way people go shopping. Shoppers now have a device literally at their fingertips that enables them to control their retail experience – checking prices, accessing product information, getting reassurances (from friends or strangers) about their decision to buy -- on their own terms. In fact, if they choose they can take the retailer out of the transaction completely.
In spite of all this, here we are a decade later, and the technology changes retailers have incorporated into their business models have been surprisingly few. Yes, of course, many feature tablets or kiosks in-store to help sales staff find an item or enable shoppers to get information. Most retailers have web sites (informational and/or transactional) and many offer shopping apps. There are virtual grocery stores on subway platforms in Seoul, South Korea and virtual beauty stores on subway platforms in New York City. Some specialty stores, such as Adidas and Kate Spade Saturday, enable shoppers to customize or order products not carried in the store. Retailers can manage their inventory more efficiently and more cheaply train their sales staff using new technologies.
But that’s about it -- at least from the retailers’ perspective.
From a shopper’s perspective, however, it is a totally different story. Shoppers have moved at warp speed to adapt to, absorb and use technology to make their lives easier, to be smarter when they buy, to take control of their retail experience and redefine the way they shop. Even the way they think about “the store” has quickly changed. No longer bricks or clicks, just “the store.” This is regardless of how much money they have, what age they are, the color of their skin or where they shop. Their “Path to Purchase” and their overall view of shopping has quickly been transformed in ways that few but the smartest technology experts could ever have imagined a decade ago.
The impact of all this is now revealed in ways many retailers have yet to recognize. For example, shoppers are now reassessing their in-store experiences based on their digital experiences, and vice versa. In one of our recent How America Shops® roundtables, what stood out was how many of the participants’ digital shopping experiences have changed the way they judge physical stores they shop, and vice versa. One participant said, “I like to visit clothing stores but if they are not organized I go nuts… because of my experience online. If I’m looking for something online I just type it into the search box and there it is. On the other hand, some stores are just a mess.” Another said, “I love to go to Target but the website doesn’t live up to the store at all.”
Retailers have been able to get away with messy stores and hard to shop categories for a long time, but no longer. As more people shop online or use their smart phones to help them shop, traditional retail experiences are no longer good enough or customized enough. And the reverse is true: if a retailer offers a great in-store experience but doesn’t deliver at the same level digitally then shoppers quickly become dissatisfied. And yet, very few retailers understand this or have done anything to address it. The in-store experience, in particular the way physical stores are organized, has changed little in the last decade.
But that’s only part of it. The impact of technology at retail today is broader and potentially more powerful than many – even the biggest or smartest retailers – have successfully executed against. The biggest opportunity technology now offers retailers is to enable them to understand and build a relationship with their customers in ways they never could before. It is the much talked about “Big Data” opportunity that will allow retailers to recognize each and every one of their shoppers more intimately so they can deliver a more customized experience to them and thus build a more personal, relevant and more profitable relationship with them. That’s where the next real retail technology breakthrough is.
Media Partner: CIOReview | B2B Online 2020
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