Companies that can figure out how to take advantage of new technologies for digital retail will outsmart and outpace competitors.
Any company of any size — whether it’s one employee working out of her basement or a multi-national company balancing millions in revenue — must consider how digitization is affecting business as we know it. The question is no longer “When do we innovate?” but rather “How do we innovate?” According to Gartner, in the next five years, U.S. CIOs expect their companies’ digital revenues to grow from 16 percent to 37 percent. If digital innovation isn’t part of your current strategy, you’re not going to be around for long — just take a look at what’s happening in retail.
Retail continues to be an industry where the “innovate or die” adage has proven true for old giants (think Sports Authority or Circuit City) and has shown its value in creating new ones (like Amazon). And innovation doesn’t discriminate based on a company’s size or revenue.
Smaller retailers, in particular, must prioritize innovation and take the often feared leap into digital. These small businesses often stand to gain the greatest potential from digital transformation. By taking advantage of CRM software, ecommerce websites and marketing automation, small businesses can compete, and even beat larger competitors, whose implementation processes are often complicated and time-consuming due to legacy technologies.
The digitization of shopping, paired with digital evolution in adjacent industries, is creating an ever-changing retail experience. In the small business world, companies that can figure out how to take advantage of new technologies will outsmart and outpace competitors. To survive the imminent tectonic shift in the industry, emerging retailers must think about the customer from the inside out. Here’s how:
Ensure a seamless experience.
Anyone carrying a mobile device can shop anywhere, and at any time. Think about changes in the modern consumer’s path to purchase. This past year, 51 percent of purchases took place online, more than 90 percent of consumers used smartphones while shopping in-store and 78 percent of global shoppers were influenced in some way by social media. This consumer behavior calls for an integrated shopping experience that is seamless across physical stores and online platforms alike — from purchase and delivery all the way to returns. And for small retailers that don’t have a mobile app or don’t plan to sell online, there are still ways to engage with today’s digital crowd. For example, ensure that your website has a responsive web design that looks uniform across any digital device.
Consequently, today’s customer expects vastly different service than the customers of 10 or even five years ago. Millennials make up the majority of the global population — and these tech-savvy shoppers are anything but traditional when it comes shopping. To attract and retain this generation, personalization is key. Retailers that can offer consistent yet customized offerings are most likely to come out ahead of competitors.
The seamless shopping experience doesn’t stop when a company successfully synchronizes digital and physical shopping platforms. The crucial next step for retailers is unifying these channels — breaking down silos between mobile, online and in-store experiences so that every channel operates as a single, unified system, with the customer experience at the forefront.
Personalize every aspect of the interaction.
When it comes to shopping, every customer wants to feel unique. Creating a sense of personalization has become a golden standard in retail. By leveraging predictive analytics, companies can anticipate the wants and needs of their customers to create customized experiences — finely tuned for individual preferences.
More and more, retailers are employing sophisticated technologies to capture, store and analyze customer behaviors — not just online, but in-store as well. The ability to track customers’ movement and behavior throughout the store is giving traditional brick-and-mortar retailers the same level of analytical capabilities that online retailers have enjoyed for years. Once that data is paired with purchase history, behavioral analysis and market trends, the capabilities are almost endless.
Take, for example, BaubleBar, an online jewelry store that recently opened two brick and mortar locations in New York City. BaubleBar provides customers with a unique online and in-store experience via interactive display cases, which include tips on how to wear the jewelry, pictures of other buyers and recommendations for future purchases. Totaling only 150 employees as of 2016, this small business uses data to determine the jewelry a customer will want before she even sees it. When a customer searches the web, Baublebar gathers real-time information about the media outlets she frequents, other designers she shops and how long she spends looking at each page. By collating and analyzing the data, the site can craft a clear picture of each customer’s needs, style and preferences. The company not only puts this information towards personalizing the shopping experience, but also is able to forecast trends and make future design decisions — giving the customer more power than ever over product creation.
Tailor the technology to your business.
When entering the digital sphere, small retailers should follow the examples of large, successful companies and partner with technology experts to improve the customer experience. Forming a strategic technology relationship is a growing trend; Whole Foods and DSW are among the companies partnering with my firm, Infor. Co-innovation partnerships allow retailers to ramp up capabilities under the guidance of trusted technology experts with vast experience in ushering retailers into the future. These partnerships bring together people who know both the business and the technology landscape best.
Now is the time for retailers of all sizes to rethink their industry and draw inspiration from platforms like Netflix and Pandora to get inside the head of the modern customer. By calling on UX experts with creative design power to elevate their business to the cloud, companies can meet the demands of the modern day customer.
The retail industry is undergoing massive disruption, and there is no sign of slowing in sight. Disruptive technologies like the internet of things, automation, artificial intelligence and 3D printing are no longer just concepts or pilots, they are a reality of today’s business operations — and the benefits they provide are endless. Just look at Amazon’s new grocery store which is making lines and checkout counters a thing of the past, thanks to AI and sensor technology.
Surviving retail transformation is not about embracing every new technology, but rather about making informed decisions about which technologies to pursue, and understanding when the time is right to make these investments. Small companies that can spot opportunities on the horizon, identify potential threats and re-evaluate its business strategies with digital at the forefront will dominate the marketplace of the future.