Retailers live or die: now is the time to embrace digital
With many high-street stores and e-retailers still unable to offer a true seamless user experience (UX), it is no surprise consumers are becoming disengaged.
The pace of IT change within the sector is moving at such a rapid rate that it is time for retailers to recognise those that innovate through technology will win the hearts and wallets of the customer, and those that don't will be left behind, says David Rigler, Director for UK Retail and Manufacturing at SQS.
At the Retail Business and Technology Expo, Zugara demoed a virtual dressing room of the future. Customers are able to try on one garment and scroll through additional colours and styles, are given an instant view of how they would look in them without having to physically change.
Ray-Ban launched its own reality experience with a virtual mirror on its online store, which allows customers to try on different styles of sunglasses, in the comfort of their own homes. From the large supermarket chains, Sainsbury's launched a GPS app to help guide shoppers around its stores and find items on their shopping list.
By engaging with an integrated UX, retailers are giving customers a convenient, customised – and fun – experience. It's not very often that any of us look forward to doing the weekly shop, but innovations like the Sainsbury's app change things. Suddenly it's easy to find that tricky item when you're in a rush. Sainsbury's, Zugara and Ray-Ban, among many others, are recognising the value of greater engagement, which will ultimately help them build trust and promote long-term loyalty with their customers.
Digitisation in retail encompasses three broad areas: customers, the value chain and the real world. In the case of customers, information can be captured on the likes of buying habits, preferences, body size or dietary requirements. This information can then be used to enhance and customise the overall UX. Digitising the value chain can optimise profits by highlighting the various cost components, while enhancing the businesses of all members of the value chain, thereby building stronger relationships and mutual success. Digitising the real world as seen above by the likes of Sainsbury's, Zugara and Ray-Ban, will radically alter a consumer's retail UX and lead to a more enjoyable buying experience.
As the desire for a digitised UX becomes more prevalent in retail and the technology backbone needed to support it becomes more complex, the potential for failure, if not properly tested, rises exponentially. The price retailers pay when things go wrong can be very high. Just last month, coffee shop behemoth Starbucks experienced an outage caused by a failure during a simple daily system refresh that wasn't tested properly. The point-of-sale outage, which lasted five hours across company-operated Starbucks stores in the US and Canada, led to disgruntled consumers expelling their wrath on social media sites and the store being forced to offer free drinks as compensation, costing the company millions of dollars.
The desire to digitise the retail industry has certainly put pressures on existing systems and it is only set to continue. Customers that focus on their digital strategy can reap the benefits of today's technology to ensure they remain one step ahead of the competition. To help overcome the complexities associated with new IT systems, speed of technological change and the potentially damaging effects of a software ‘glitch', quality assurance needs to become a priority and is more important than ever if retailers are to lead the way.
As with any new model, if retailers fail to ensure their new platform performs successfully, it won't take much to put off a customer completely. Today, software is critical to UX and the repercussions of an IT failure can mean more to a business than simply loss of revenue. News of system failure can be spread quickly by disgruntled customers via social media channels, causing irrevocable damage to the brand.
There are a couple of key areas that retailers must consider before embracing IT change to avoid dreaded glitches and the potential consumer backlash that could follow.
Ensure goals are aligned
A critical step to make any new IT project a success is to ensure everyone in the business is working towards the same goal. In retail, that means involving sales, marketing, IT and store managers from the beginning of the project. For example, it would be unwise for marketing to promote channels that have not been fully tested and trialled, so it is important to ensure unity throughout the entire process. The focus should be on mitigating risk at every stage, keeping the business goals in mind and following technology trends closely to gain competitive advantage.
Take your time
It's important not to rush through a new 'big bang‘ project as a knee-jerk reaction to changing market dynamics. Despite peaks and troughs in technology advancement within the sector, change should be seen as constant, with each project undertaken with the same due diligence as another, for a smooth transition and outcome. Only by embracing flexibility, agility and constant change will retailers be able to be first to market and neutralise competitive threat quickly.
While many forward-thinking retailers have fully embraced digitisation, some have chosen to simply tinker on the edges and will ultimately be forced to play catch-up. Digitisation presents retailers with a wealth of opportunities to predict and offer their customers exactly what they want, when they want it, while harnessing the wealth of data it provides. Digitising the store experience is essential in generating brand loyalty and advocacy. With the likes of augmented reality changing rooms, iPad check-outs and zero inventory on the horizon, both the customer and retailer of the future are set to be heavily reliant on IT to create a truly digitised UX.
Live or die
It is clear that digital offers enormous opportunities. The approach taken by retailers will determine who will survive the next round of extinctions in the age of digital Darwinism.
