The Retail industry business has been around for centuries around the world. It all started with a community general shop where people of the community would shop for items of necessity. In the early days, the average customers were shopping from mom and pop’ stores in communities. As retail evolved, first to arrive were the department stores in the bigger cities. Then came the mega shopping centres in suburbs, where everything was found under one roof, causing smaller local stores to bow out to the success of giant, one-stop shops. In addition; the online shopping medium has added a completely new dimension to the Retail Industry and customer experience.
As it is; the Retail sector is no stranger to change and transformation. But the impact of technology have been the greatest game-changer of all. Fundamental shifts and shocks, like the power of distribution technology, the impact of advertising and branding, the seachange the web unleashed and the ability for anyone to ultimately sell to anyone, anywhere, have changed the way we shop, forever. Consumers don’t even need to leave their houses to shop or can buy things on their daily commute, putting convenience at the heart of the shopping experience. The latest wave of emerging technology is affecting both smaller, local shops as well as the retail giants. One underlying theme for each wave of change is that the incumbents of all sizes have either adopted or died. Retailers which have been unprepared for new ways of doing things have found themselves in a graveyard of ‘has-beens’ and joined a list of those which have suffered, such as Circuit City, Borders, Blockbusters … to name just three. The empowered consumer has fundamentally changed retail.
- The technology advancements in the Supply Chain are also enabling new business models in the retail sector. Until now, physical stores had the protection of immediacy compared to online. Customers want things cheap and they want them now. E-commerce could compete on price, but not speed of purchase and availability. However, technology giants such as Amazon, with Amazon Prime and Amazon Fresh, or Google, with Google Express, and even Uber are slicing away the advantage from bricks-and-mortar retailers by piloting same day delivery services which provide a further threat to physical stores by catering for immediate needs.
- Similarly, In-Store Operations have been transformed by new developments such as interactive kiosks, mobile payments, BLE technology, RFID tagged products and smart shopping carts. Most of these aim to reduce the friction of in-store customer experience; from minimizing wait times at the register to making sure customers can find out which products are in stock, while still managing an efficient inventory. Smartphone penetration in particular is creating pressure on physical store sales, and trends such as “showrooming” are causing physical stores to become the means for customers to see or try the goods they want, only to find a cheaper alternative online.
- The customer experience is no longer limited to browsing or purchasing of certain goods in physical stores. It now extends to an end-to-end customer journey, starting with the customer researching the goods online, coming into a store or ordering online to purchase the goods, and continuing well after the purchase has been finalised by vocalising feedback about the product and the brand. Throughout this journey, customers are leaving breadcrumbs of information that some retailers ignore and sweep away, but others leverage Big Data/Predictive Analytics to make sense of this information, and use the insights to encourage customers to spend more at their stores.
Six main areas where technology is transforming retail include: Supply Chain, Marketing & Merchandising, Procurement, Customer Experience, Finance and HR support function. The technology footprint leading this transformation is impacting many stages of the retail chain; from back office and enterprise systems, to many customer-facing functions such as payments, loyalty programs and customer services.
Technology has been making consumers’ lives easier for many years, as individuals can use computers and now mobile devices to access bank accounts, keep in touch with others and shop for retail products. Merchants have begun taking notice of this increasing technological trend and are doing two things – first, they are implementing systems that accommodate customers who prefer to use their devices to browse for and purchase items; and second, businesses are incorporating solutions that enhance their own operations. Whatever the reason, technology is helping to boost retailers’ strategies, whether they pertain to customer satisfaction or improving internal processes. CPI Consulting Associates; specializes in SAP solutions which help retailers establish a digital foundation to simplify their business with a detailed understanding of their customers’ needs and the ability to serve them individually and seamlessly across all channels.