Retailers have always been at the forefront of each new wave of digital advancement, in an effort to accommodate the increase in both the number of customers and the ensuing volume of products and transactions.
By Tony Nugent Executive, retail practice at Britehouse
Their own digital transformation started decades prior, with investment into core transactional and system of record platforms designed to manage the massive data volumes in as efficient and resilient manner as possible, including ERP systems like SAP.
Now, the constantly changing consumer behaviour, increased online competition, and a generally challenging global retail environment means that to remain competitive today, means retailers must drive much more value from their technology investments to target operational efficiency, reduce wastage, and increase agility.
Above all, retailers need to focus on banishing bad customer experiences, delivering superior customer experiences, growing their customer base and share of wallet, and creating moments of pure retail magic.
Using technology to keep up with the new consumer
Influenced by the online shopping experience, consumers have taken on a new persona. Having been able to browse through various options online, find exactly what they want, buy how much of it they need, and get it delivered to where they want, consumers now walk into stores and are more assertive, aware, discerning, price-savvy – and their expectations are higher.
They expect stocked shelves, variety, store employees who understand the store layout and stock inventory, and a stream-lined billing process. Importantly, they want to be delighted and have a reason to return to your store over another.
The issue is that all too often, customers are walking into stores and having the opposite of their online experience. They can’t find what they want, and store employees usually aren’t even aware of gaps on the shelves, let alone what’s in-store. They also can’t manage the customer’s expectations by pinpointing when the next delivery will be and whether their sought-after product is expected with that delivery.
When the dissatisfied customer leaves without buying anything, the retailer is none the wiser. But this could be different. By combining the underlying data available in the ERP system together with new sources of data gleaned from cameras, beacons, IoT devices or social media, there’s a veritable smorgasbord of shopper insights that retailers can use to radically improve the employee and customer experience.
For instance, retailers can track customers entering their stores or even specific departments and gauge from their behaviour what is likely to encourage them to buy more. This could mean changing the store layout, repositioning merchandise, or allocating more employees to busier departments.
There’s also the opportunity to put real time data and insights into store employees’ hands via one mobile app. This way, they have access to accurate, up-to-the-minute store inventory updates, notifying them of gaps on the shelves that must be restocked, allowing them to put in orders, and digitally find stock wherever it may be in the system. Retailers like UK brand, John Lewis, have demonstrated large ROI by automating several in-store processes through mobile applications for employees.
Bridge the software gap with the right partner
Unfortunately, many retail CEOs have been frustrated by the apparent inability to derive this level of value from their investments in IT. Traditional core systems are seen as expensive to run and inflexible in responding to new requirements, while digital apps, which are typically developed outside the realm of the core development teams, create issues with data integrity, security and sustainability. What’s needed is a holistic model that builds on the strengths of both modes of IT to enable both stability and speed of development.
The good news for retailers is that the underlying technology platforms are now more able to support this type of delivery. Software vendors like SAP are developing architectures which extend the traditional core ERP into a truly digital and intelligent enterprise platform, including Mobile and Cloud, IoT, Artificial Intelligence, Machine Learning, customer experience and social media insights. These platforms leverage both the vendors own digital offerings but have APIs to integrate seamlessly with other niche retail technologies.
To take advantage of the new digital opportunities, retailers need to partner with organisations who clearly understand the retail value chain and how the myriad of available technologies can be combined to deliver rapid business benefits.