Find out how IoT enables retailers to serve consumers at any point of their shopping journey anywhere and on any device in a consistent, personal and differentiated way.
Mobile shopping, same day delivery, and growing volumes of data from online channels are forcing retailers to a tipping point to remain competitive and better respond to evolving customer needs and preferences. That is why omni-channel retailing lies at the heart of many retail transformation efforts, according to a 2014 report from Capgemini Consulting and information standards organization GS1 US.
“Retailers are transforming their organizations and market approaches to leverage the power of digital and satisfy the needs of the ever-changing consumer,” explains Dan Albright, senior vice president, and North America CPG, Retail and Distribution leader for Capgemini Consulting.
As Albright mentions, consumers are ever changing. Their shopping behavior, preferences and expectations change all the time, and vary greatly from person to person. Not only can customers shop whenever and wherever they want, they also have access to a wider than ever range of brands and products.
The shopping journey has also changed completely – customers may start their journey by researching the company or brand on Facebook, then ask their friends’ opinions on WhatsApp before going in store to try the product and then completing the purchase via their phone or tablet. Retailers need to get a handle on what the customer journey looks like so they can ensure that consumers are being engaged in a consistent and joined up manner to any confusion or conflict.
The difficulty is that there are many omni-channel permutations and one failure to satisfy the consumer can lead to damaged brand value and affected loyalty. Today, with so many ways to engage the customer, retailers must ensure that each point of engagement is personalized, consistent and connected.
“Retailers need to orchestrate all digital capabilities to create a holistic and consistent customer journey and unique experience,” adds Fabio Chiodini, Global Consumer Products and Retail Lead at Avanade. “To succeed, retailers need to provide a reason to engage customers and deliver relevant, convenient and delightful services able to activate brands and create ‘contextual epiphanies’ across time and space.”
Retailers need to make better use of the data surrounding what the customer has bought, where and when they have shopped, and what channels they have used. These data points can enable them to deliver a personalized, seamless and differentiated experience. Getting this right could lead to a gain of US$9 billion for retailers, according to research from IDC and Microsoft.
Big data can be broken down into internal and external sources. Used effectively, these aggregated sources give retailers remarkable insight into their target audience by helping to determine who is in their store and what they are buying. These predictions shape the content strategy, and optimize marketing calendars to ensure the right message truly finds the right customer. The use of geo-location also helps retailers pinpoint a customer’s proximity to their store or location within the store, and tailor the messaging accordingly. With the right digital platform in place, brands can now use a customer’s buying patterns and preferences to target the individual.
To take advantage of these data, retailers need to be agile and flexible so they can access critical information in real time and then communicate with consumers in the appropriate manner, for example, by refining the tone of its brand messaging to one that is right for their audience. True analytics analyses the outcomes of content strategies against business goals, optimizes the messaging and predicts best results. This affords retailers a level of accuracy in their messaging that has previously been left to assumption.
Convenience is also key and retailers should make sure that shoppers don’t have to repeat stages of the shopping journey when they move across different channels, or wait a substantial amount of time for a web page to load, for example.
When an omni-channel strategy is executed well, retailers can achieve significant benefits. “Retailers that are investing in omni-channel are achieving increased sales through alternate channels, thereby leading to improvements in inventory accuracy and productivity, reduced shrinkage and faster consumer demand fulfilment – which, in turn, leads to increased revenues, enhanced margins and improved consumer retention,” says Albright.
The more successful retailers will also integrate digital technology and online selling techniques in store to rejuvenate the high street, such as providing Wi-Fi in store will allow consumers to share their experiences with friends. Then, there are mobile POS solutions, which allow store associates to move round the store with a consumer while they are considering what to buy. Or a retailer could create their own app that alerts store associates every time a loyal customer comes in store.
The role of the store may also change from being a place where all stock is held to instead becoming a showroom or fulfilment center. Click and collect is only just the beginning. UK retailer John Lewis allows consumers to order online and pick up either at its store, in parent company Waitrose or at newsagents and petrol stores. A number of retailers are also trying drive-through initiatives, such as Carrefour, Walmart and Asda. And Amazon allows consumers to pick up from lockers with a personalized code. Blending these options with more flexible home delivery options helps bring together online and bricks-and-mortar stores. Further, with post-sale service, the store can be used as a local service center to get issues resolved, such as making alterations on an item bought online. The physical store gives traditional retailers many more options to be responsive to customers.
To achieve this, active collaboration is key. The good news is that the technology to enable this is already available. Now is the time to invest and define a holistic strategy, otherwise retailers risk falling behind. Microsoft Dynamics AX for Retail, for example, can help retailers and brands maximize opportunities to cross-sell products and improve customer service by providing a single view of the customer across every touch point. Combined with other Microsoft solutions such as Office 365, Xbox and Skype, retailers have a single vendor integrated solution for reaching customers when they want in the manner that is preferred.
But technology for technology’s sake is not enough; retailers need to align their entire operations with the omni-channel retail model and promote it throughout the entire organization. It takes a shift in company culture and needs to be about what suits the customers – retailers should keep up to date with how customers are using new technology and embrace any change in behaviour and trends to ensure they stay ahead of the curve.
Ultimately, retailers will find that the digital and physical arenas complement instead of compete with each other, thereby increasing sales and lowering costs. In today’s environment where information and ideas can flow freely, retailers that learn to take advantage of both will be well positioned for success.
Adapted from Karen McCandless from OnWindows