It’s no secret that in-store retailers have been facing threats of online for quite some time now. In fact, a recent study shows that 61% of responding retailers recognize that their business faces risks of disruption. However, despite this fact, only about 15% have been focusing on scaling this technology. How could this be?
Whenever there are multiple organizations within a business, there is going to be some lack of collaboration, however small. Due to this, many organizations have trouble prioritizing what things to invest in. This is especially true when it comes to retail technology investments, as they’re relatively costly.
At Luminos Labs, we’d like to help you cut through the hype and help you figure out what kind of retail technology your business should be investing in now, and in the future.
Based on Gartner’s retail priority matrix, we have a list of technologies that you need to be including when it comes to your e-commerce. The priority matrix allows us to see what would be most beneficial to invest in now, and what might be wise to invest in a little later down the line (more on this later). Of course, if you’ve got the flexibility, there’s no harm in getting ahead of the game and investing in the present and future early on. Here’s our list of must-have’s when it comes to the most promising investments:
Marketing products to specific customer segments has always been a significant challenge for retailers. Gathering consumer behavioral data can be messy, and it’s hard to analyze correctly and continuously even when you have it. Customer-centric merchandising and marketing allow retailers to offer the right assortments to customers as well as define customer behavioral segments, correctly.
While many retailers understand this concept at a high level, there are still many that can’t find success at the micro-level. The difference in approach is the application of algorithms to big data to enable the use of customer information in a consistently meaningful way. Retailers have started to collect customer data from several different touchpoints to understand them deeper. Even things like loyalty management initiatives are being considered. The bottom line, the best investment in this area is to develop more accurate means of collecting more-specific data from consumers.
As we see more physical store closures and overall changes in customer shopping patterns, it’s important to focus on differentiating your stores and overall shopping experience. Simply put, the typical store layout planning processes just aren’t going to cut it anymore.
Instead, advanced analytic capabilities are required. This includes predictive analytics and pattern matching to provide precise recommendations for the placement of categories and products, all to maximize sales of a specific store. Intelligent virtual store design uses scientific space-planning techniques, such as system-generated recommendations, to enhance the effectiveness of store-specific spatial assignment.
This certainly applies to online stores too, from a UI/UX standpoint. The better you can predict where your customers will go and why – whether online or in the physical store – the more sales success you will enjoy. This technology is predicted to progress rapidly so it’s definitely something to consider sooner rather than later.
Labor is one of the most costly forces behind any business. So, of course, being able to successfully automate labor will save you money in the long run. The keyword there is successful. Robotic process automation (RPA) presents a great opportunity for retailers to automate the more repetitive and mundane tasks in their business model to optimize profit and efficiency.
RPA tools use “if, then, else” statements on data to carry out important tasks online. These can be combined with UI interactions, mainframes or HTML. RPAs work by mapping a process in a specific language for the “robot” to follow, with run-time allocated to execute the script by a control dashboard. Operational jobs such as cashiering will definitely be affected by automation, but even some higher-level jobs such as those at a company headquarters may be affected too. The point being, investments in automation have the potential to save you way more than just “chump change”.
Note again that all of the above technology isn’t predicted to hit the mainstream for another 2 to 5 years. So, if you’ve got the capital, you might want to consider looking into how these retail technologies could fit into your business model to get the most benefit for the future.
According to the same matrix, there are also a number of valuable retail technologies that will yield a high benefit but won’t hit the mainstream until 5 to 10 years from now. This means that while they’re still great options to consider investing in now, they have ultimately had a lower priority compared to the above items. (High benefit with 5-10 years before mainstream adoption)
The price of products sold online can change rapidly, and this is a common issue that most retailers face. Contextualized real-time pricing allows for retailers to update the price of their products in real-time, across all channels. This is done based on a number of important variables, such as competitive pricing, what’s being promoted, item availability, and customer loyalty.
This process must be instant and seamless to be worthwhile, which is why new retail technology is being entertained to address this e-commerce challenge. There are a few ways retailers are handling this today. Some use electronic price tags, shelving labels, or digital signage to manage price changes in-store on a 24-hour basis. Others use mobile applications to control pricing with personalized offers and post-transaction settlement. A good example of the latter is Walmart offering a “savings catcher” on their mobile app, allowing customers to receive a refund or credit when a better price is found elsewhere.
With more and more companies offering online chat, customers are beginning to expect 24/7 access to retail representatives. Retailers have thus started to invest in conversational commerce, which uses online messaging to allow customers to interact with people, brands, or bots to facilitate their transactions. Most importantly, customers expect to be able to reach retailers through their platform of choice.
Apart from the general push for retailers to make their stores totally accessible on all platforms and operating systems, focusing on virtual personal assistants (VPAs) as eCommerce channels is a big opportunity for retailers. With many large tech companies coming out with their own VPA – such as Apple HomePod, Amazon Echo, or Google Home – it’s critical for retailers to focus on these devices as a way to sell products. Think about when you return from the store and you forgot “that one thing!”, wouldn’t it be great to seamlessly chat up your Google Home to have the product ordered to be delivered the next day?
Okay, so this isn’t necessarily a new concept, but it’s becoming increasingly critical for retailers to optimize the core components of their distributed order management (DOM) solutions. These components are as follows:
Right now a lot of retailers are filling orders with legacy systems that don’t really support multi-channel systems and eCommerce platforms. This is a big issue. Whether you want to adapt a DOM solution from another industry to support yours, or if you want to build a custom DOM specifically for your retail needs. The important thing is that you prepare your company with a flexible DOM that can support ERP and Warehouse Management Systems across all channels.