As highlighted by a Retail CIO roundtable discussion held by Exponential-e, in order to compete with e-commerce "bricks-and-mortar" retailers will have to personalise their in-store experiences - and they'll need to do so with the aid of Digital Transformation.
In part one of this two part blog series, we look at why the high street needs Digital Transformation to survive and prosper.
Despite digital retail becoming ever-more dominant, some high street stores are actually flourishing in the current climate. But how? As Marketing Week reports, such trend-transcending success can't be explained by a single factor alone. To take Shoezone as an example, success has been achieved through (amongst other factors) maintaining a lean operational structure and increased concentration on online sales and email marketing.
But, as confirmed at a recent Retail CIO roundtable discussion organised by Exponential-e, the one factor of many that should perhaps be of most interest to CIOs is technology-assisted enhancement of the in-store experience. After all, as Sir Charlie Mayfield, Chairman of John Lewis admitted recently, high-street retailers will "never beat Amazon by having better algorithms", but nevertheless have a "huge opportunity to use [their] people and technology to offer better service to [their] customers."
Key to improving the in-store retail experience is replicating the attractive features of the online retail experience. Kees Jacobs, Vice President of Global Consumer products and Retail Sector at Capgemini points out in a recent interview with Gigabit magazine that "shoppers have grown to expect in-store experiences that reflect [the] level of personalisation, ease and speed" they've come to expect through their laptops and handheld devices. According to Jacobs, bricks-and-mortars "need to provide consumers with a seamless, quick and intuitive digitally led experience."
One way to do this is by replacing the traditional Electronic Point of Sale (EPOS) systems - in other words, checkouts - with a so-called Mobile Point of Sale (MPOS). In February, a survey by Retail Week (in collaboration with Worldplay) reported that 63% of consumers they surveyed said that checkout-free stores would make visiting retailers more engaging or desirable. We're already seeing this on the high street; for example, customers at Wetherspoons can now use a smartphone app to order food and drinks to their table without leaving their seat.
Not content with dominating e-commerce, Amazon has been making inroads into brick-and-mortar retailing for some time now, and its checkout-free grocery stores are ample proof that (surprise, surprise) it can more than match the traditional brick-and-mortars technologically.
However, if traditional retailers learn to use technology - and in particular customer data - more strategically, there's an opportunity for them to beat the e-commerce giants on their home turf: the high street.
As Kees Jacobs writes:
"AI has the potential to help retailers understand their customers' buying behaviour in more depth. By analysing data from customers' repeat purchases and online transactions, retailers can create hyper-personalised buying experiences in-store. Armed with this knowledge, shop assistants could, for example, provide customers with tailored buying suggestions, creating a VIP experience for them."Kees Jacobs
For retailers, then, the incentive to Digitally Transform is clear; so, however, are the challenges that come with it.
I'll discuss these challenges, and how they can be addressed, in part two.