What It Takes for Retailers to Transform Their Operations in the Digital Age
Microsoft’s new report, “Reimagining Retail in the Digital Age,” just came out and it is jam-packed with excellent points, examples and research of why and how brick-and-mortar retailers can adapt to a changing shopping landscape.
There’s a lot to delve into in the report. Today, we’ll provide an overview of the content before diving into greater detail in subsequent posts. I think it comes as no shock that the retail industry is being rocked by a $2.3 trillion global e-commerce market, and the rise of savvy, brand agnostic consumers that can purchase anything they want with the touch of a button on their smart devices.
Retailers and brands today must embrace digital intelligence and innovation like never before. It’s truly the only way they can continue to drive sales and margins in what amounts to an “on-demand consumer economy,” as the report states. That’s because retailers – no matter where their stores are located – are competing in a global omnichannel marketplace. And the store’s role in the shopper journey is rapidly changing. It’s so much more than just the fact that consumers are less brand loyal than ever, or that they can purchase and price check items on their devices from any location. It’s also being driven by the fact that consumers increasingly turn to their peers and influencers to determine what they’ll buy, and that they are becoming more apt to physically walk through doors and open their wallets for experiences like spa treatments or “eatertainment” establishments versus the purchase of tangible things.
There are ways retailers can adapt to the above-mentioned forces of change. Digital technology is the “connective tissue,” as the Microsoft report puts it. It’s what will bring the ease, convenience, customization and automation to every aspect of a retailer’s organization – from its business processes, to everyday logistics, to the way employees work, to the customer experience and to the very products and services it offers.
For retailers willing to adapt, the report highlights four key pillars of digital transformation success that leading-edge technology can help with. At a high level, they are:
· Create meaningful shopping experiences for your customers. Data-driven solutions, like beacons and sensors to cross-channel analytics and AI are helping retailers redefine the way they engage with their customers. Personalization also calls for recognizing the multichannel shopper and communicating with him or her in a consistent manner.
· Empower employees to wow your customers. Sales associates in the store must be able to quickly and easily adjust their merchandising strategies to reflect customer preferences in real time. This means empowering them with leading-edge technology that incorporates inventory visibility and advanced data analytics. It also means giving them tools that allows them to locate an item anywhere in the store or supply chain for customers to “save the sale.”
· Build an agile retail organization by streamlining operations. The days of collecting endless amounts of data about your customers, and then only using a small percentage to inform your business are over. Technology now allows retailers to transform reams of complex data signals into meaningful, actionable insights. This helps retailers take demand forecasting and customer targeting to new levels. In addition, a now-digital retail marketplace means that a unified commerce platform is essential to creating a frictionless shopping experience across all channels.
· Reimagine your products. Shoppers nowadays are craving personalized, time-saving services and experiences on demand, according to the Microsoft report. This could include offering unique, 3D-printed products to show a consumer how his or her kitchen could be renovated using mixed-reality technology. Ultimately, retailers have to work hard to excite, delight and solve unmet needs – and technology can help them get creative in doing so.
We’ll dive deeper in to the four points above in future blog posts, and you can download the full report here.
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