Retail Digital Transformation
Changing consumer behavior is driving Retail's digital transformation
Covid-19 has allowed us to glean many insights on what is working and what's not in Retail. As shops worldwide begin to welcome back their customers, there is little doubt that the retail industry has changed forever. Technology is transforming many industries, but nowhere do we see this change more than in Retail. Most of us can recall a recent experience where we – as consumers – have changed our behavior to react to this "new normal." This changing behavior is driving Retail's digital transformation.
Retail IT departments and CIOs are looking for the best available technology to navigate this new normal. What is the silver bullet that can transform the way they do business? Maybe it's a POS that integrates with your E-commerce and BOPIS solutions, bridging the online and in-store experience? Perhaps it's a new LMS so you can efficiently offer employees the practical training required to improve consumer satisfaction and loyalty. Maybe it's an ERP to gain the information needed to manage customers and retention. The pandemic has left retailers scrambling to leverage new technologies to solve the new business problems that have arisen. The right technology is transforming the way Retail does business, and the effects will undoubtedly remain beyond the pandemic.
"COVID-19 didn't create a retail apocalypse, but has been its most swiftly destructive horseman".
More than 9,300 U.S. stores closed last year, and over 5,800 the year before that, according to tracking by Coresight Research. This came after many years of changing consumer behavior - moving from shopping malls to shopping online, backed up by experiential brand-boosting street-front locations. The lockdown of spring 2020 pushed many of America's brands to the brink, and by summer, we saw the likes of J. Crew, JC Penny, and Brooks Brothers file for bankruptcy.
The changing landscape of Retail Technology
The retail industry is one of the most important ways that humans interact, consume and exchange value. It will change, but it will never go away. From the invention of the first cash register in 1883 to barcodes and inventory tracking methods in 1974, this is not Retail's first rodeo in adapting to consumer behavior with technology. World events have permanently modified the retail industry. Brands that embrace new behaviors and attitudes tend to weather the storms.
One emerging trend is the relationship the consumer has with the brand and where it now begins. Not so long ago, window displays, visual merchandising, and traditional advertising were the primary methods in which brands communicate with their customers. Now, the conversation and introduction to the brand begins online and follows the customer right into the store.
Looking at the trends, E-commerce will continue to drive retail sales after the pandemic. The category has grown for over a decade compared to brick-and-mortar retail. Benedict Evans
"over the past three quarters, U.S. e-commerce has grown as much as it normally would in three years."
This is unprecedentedly fast. Customers nowadays expect a seamless online and in-store experience, and their behavior of shopping online has been reset permanently due to COVID-19. One brand that does a great job of integrating the online and in-store experience is Nordstrom;
"Nordstrom now earns the internet retail crown, slipping 1% to an ACSI score of 81. In 2020, the company further enhanced its store and online integration, giving online customers expanded merchandise selection, delivery, and store pickup options. During its Anniversary event, Nordstrom's digital sales accounted for 60% of total sales."
What Technology will help Retail thrive in this new normal?
Ultimately the best technology for retailers are solutions that remove any obstacles to the customer experience and make it easier for customers to buy. Recently, Retail has adopted many new digital technologies, hastily introducing POS systems, CRM platforms, ERP systems, AI (Artificial Intelligence) systems, RMS (Retail Management Software), and many more. However, speeding through the process can lead to problems down the road. It's essential to go through the traditional software evaluation process to choose and procure solutions. Defining the business problem to solve for, including the right stakeholders, and methodically working towards the right solution that meets every need is necessary to ensure that you don't waste resources on the wrong tech. It's never been more critical for CIOs in Retail to get it right and choose the best solution for the company's needs. How do we link these technologies back to the customer experience to achieve digital retail transformation? What technology should Retail invest in to improve the customer experience? We've mapped out 4 pillars of innovation below.
1. Optimize supply chain and fulfillment
(ERP, IoT, AI, Demand planning software)
With customer expectations rising, companies have begun to adopt and integrate new technology to transform their supply chain from an operations hub into the epicenter of business innovation. By leveraging AI, machine learning, and predictive analytics, companies can optimize and automate operations to improve delivery times, manage inventory, optimize customer experiences, and create new experiences that increase satisfaction and boost sales.
2. The right product in the right place at the right time
(Warehouse management software, demand planning software, SCM solutions)
Seventy-one percent of retailers say "lack of real-time inventory visibility" is a supply chain obstacle that reduces efficiency and productivity. Retailers should have a clear and accurate understanding of inventory to meet consumer demands and expectations. Products need to be in the right place at the right time, and Retail needs to have this real-time data on hand to avoid losing sales. Lockdowns worldwide exacerbated supply chain systems and processes for many retailers. These issues had a trickle-down effect on consumers; stores missed out on sales because of this lack of visibility into supply chain issues. Inaccurate inventory counts led to consumer frustration after orders were accepted, not filled, and ultimately refunded or canceled.
"When a retailer doesn't have a product, has the wrong product, or even worse, doesn't know if they have a product, they can't sell it – and their shopper will go elsewhere to find it."
3. A seamless experience between online and instore
POS, BOPIS, eCommerce (Buy Online Pickup In-Store)
With the right eCommerce, POS, BOPIS (Buy Online Pickup In-Store) solutions and integrations, retailers can deliver a seamless conversation to customers that encourages them to buy more, more often. Making it easier for customers to buy is now essential and expected by the public. With the right software solutions, Retail can benefit from lower operating costs, customer tracking, expanded reach, and improved customer experience. Even before COVID-19, the concept of offering BOPIS had been growing. Now, customers expect BOPIS. Customers like to feel like they are in control of the buying process. They are too busy to browse items in-store, and they are more comfortable buying online. BOPIS allows retailers to blend the online and in-store experience to engage with customers while offering a more convenient way to shop. Integrating your eCommerce platform, BOPIS and POS can only lead to more accessible opportunities for customers to increase your average sale and strengthen your brand.
4. Leverage customer data
Customer Data Management (CDM), Customer Data Platforms, AI (Artificial Intelligence), VoC (Voice of the Customer Software)
Customers are spending much more time online, and thus, digital transformation projects moving at a snail's pace are now the top priority. In 2021, a robust online presence is critical for Retail. 2020 pushed companies over the "technology tipping point," which has changed marketing and operations forever. Retail can harvest data from this increased time online. Listening to your customers through data can open up a wealth of advantages. Voice of customer software (VoC) delivers insight into the customer's behavior. Understanding and measuring customer experience through data can provide measurable results such as enhanced customer experience, revenue growth, and enhanced operational procedures.
Before the pandemic, modernizing and automating work with digital technologies wasn’t a huge priority. Now it’s necessary. "The COVID-19 pandemic has shone a light on the weaknesses of all companies not currently embracing digital technologies for both internal operations as well as external sales, marketing and support efforts." -Schaut
Retail must embrace digital transformation to survive in this 'new normal.' Why?
"Because transformation is better than extinction."
Ready to Optimize your Retail Tech Stack?
If you are looking for retail tech, get in touch with us! Olive is a platform used to manage enterprise IT projects. Using Olive's SaaS platform, you can manage any digital transformation project; from finding new technology solutions to ensuring a successful implementation, Olive simplifies and streamlines the process. Learn more about how Olive has helped retailers streamline their Digital Transformation Efforts