Retail Technologies for a Superb Customer Shopping Experience
Unified Commerce has become a strategic objective for most retailers today, by means of connecting all channels in real-time: online retail with e-commerce and m-commerce, and now also s-commerce (“buying buttons” in social media are gaining ground). Given this reality and contrary to some initial analysis, we can today clearly state that the role of the physical stores is more important than ever. Let me develop why.
Physical stores play a key role today, with a clear influence on the final buying decision whatever the final chosen channel. Consumers often still prefer to interact with the brand in physical stores and their products, so they can touch, try and feel them, something that cannot be offered via the online channel. In this way, physical stores will still dominate sales, with more than 95% of total sales in the coming years. The shopping experience in physical stores has therefore become a strategic goal for many retailers who are allocating more resources, both financial and human, to ensure they provide the promise of an excellent shopping experience and satisfy increasingly informed and demanding customers who expect higher speed, convenience and personalization in all their interactions with brands. And technology is a clear enabler of these capabilities.
In the stores we are seeing a growing adoption of new mobile-enabled POS that empower associates more and can influence buying decisions anywhere in the store with assisted sales capabilities and real-time inventory visibility across locations, a key omnichannel capability today. The capacity to support mobile payments is another priority, today clearly driven by key market players such as Apple, Samsung, banks or even retailers themselves (Walmart launched recently its own mobile payment solution). Or the use of in-store localization technologies such as RFID or beacons that enable new interaction and personalization scenarios. And the list of potential technologies is large. Digital signage, smart wallets, augmented reality and others will undoubtedly be increasingly present in our visits to the stores. It is no surprise then that Customer Engagement will be the top IT investment priority over the next 3 years amongst retailers according to Gartner (Gartner/RIS News Retail Tech Survey 2015).
Related to the physical stores and unified commerce, we must talk about the online channel, which can’t any longer be considered a thread for the physical stores, but a complement or ally. Thanks to cross-channel scenarios such as buy online pickup in the store (click-and-collect), retailers are reporting an increase in the number of visitors to their physical stores, which in turn provides new sales opportunities. In the UK, the most mature market in e-commerce in Europe, click-and-collect is already chosen by 35% of online shoppers, which is expected to double in 2017. According to another study this year by UPS and ComScore, the UPS Press Online Shopper, 45% of people have made a new purchase when picking up the purchase in store, among those who have used an in-store pickup option. 70% of those who return items to a store will purchase a new item.
This win-win relationship also benefits the online shopping experience. Store Fulfillment, for example, can reduce the time for online order delivery. This strategy also allows the retailer to increase the inventory turnover ratio in the physical stores, which avoids applying larger discounts in those locations where sales for some products are not so good. Another increasingly common scenario especially for fashion retailers is the opportunity to reserve online and try in the store before buying.
To make these cross-channel scenarios possible, retailers are also adopting new systems that support distributed order management, or the so called Order Management Systems (OMS). The OMS supports cross-channel business rules required for effective order management across channels, including enterprise wide inventory visibility.
Given this reality, a lot of retailers lack a clear omnichannel strategy, mandatory for guiding business decisions and investments in the years to come. From the technological point of view it means that any IT initiative should be validated against this strategy. As part of these IT strategies, Cloud is also becoming a key element to achieve higher business agility, a must today in a fast changing industry like Retail, once retailers have already overcome past concerns about security and reliability. Cloud adoption allows greater focus on the business, greater capacity to innovate and differentiate, higher scalability across multiple locations and the possibility of adopting lower cost IT operating models. Being business agility a key objective, retailers must also adopt technologies that can be easily adapted and extended for future needs and are very easy to integrate with existing systems to leverage prior IT investments, a key decision factor in most cases.
If you agree on what we exposed here, the Openbravo Commerce Suite can clearly help you!