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This article was originally published on CIO Review May 2017 Issue.
The success of retailers is finding the right balance between providing a seamless shopping experience and how effectively they leverage retail software to track, analyze, and act on consumer behavior. With customers having more power and choices than ever, the demand for exceptional experiences—both online and offline—has become a driving force in the retail industry.
Retail, with its dynamic and complex business processes, has shown remarkable adaptability. However, the industry faces significant challenges, including disruptive technologies and increasingly demanding, digital-first customers. To thrive in this evolving landscape, CIOs and CXOs need to leverage retail tech, shifting their focus from simply maintaining operations to driving innovation and transformation.
Revolutionizing the retail segment, there have been some retail players who have already looked out for their evolution. By introducing new store formats and integrating multiple selling channels—like kiosks, online platforms, and call centers—they are creating omnichannel experiences that cater to modern shoppers. These advancements demonstrate the potential of retail software and tech to revolutionize the industry, setting the stage for future trends that will continue to shape and lead the sector.
Customer experience is becoming a key differentiator for retailers, over price and product. Retailers continue to invest in newer channels and assess the ROI on each of them. However, with each additional channel, managing seamless customer experience across different touchpoints becomes progressively difficult.
Seamless customer experience across channels cannot be achieved unless one has a unified platform. That is the nexus for all customer experience. Many merchants realize the need for this; though most have admitted to not having the technological capabilities required to make it happen.
The disparate systems that operate in their own silos will no longer be preferred and with advancements in handheld devices and network infrastructure, unified systems on the cloud will evolve that will eliminate the need for multiple system integrations. Some of the forward-looking requirements are –
O2O (online-to-offline and vice-versa) is an integral part of the omnichannel strategy. Amazon Go in the US and Myntra’s brand store in India are classic examples of engaging with customers across channels seamlessly.
In the omnichannel retail world, fragmented analytics will not suffice. A natural expectation with retail software or retail tech would be to gather, organize, and analyze all kinds of data—transactional, behavioral, price changes, store staff performance, footfalls, stock management, campaigns, loyalty, etc.—across channels. With fragmented analytics, data-to-action analytics may take several days, causing business loss to the retailers.
To reduce the time taken to arrive at actions, the industry is moving towards predictive and prescriptive analytics powered by retail tech, offering actionable insights beyond traditional diagnostic analytics. For instance, if the performance of a store is going down and it is less likely to hit the monthly target, the analytics tool within retail software should be able to make the store staff aware and suggest several corrective actions to achieve the target.
Catering to the ever-growing demands of consumers, in terms of product and service delivery, is another aspect that retailers are focusing on today. Using technology, these retailers are making efforts to reduce waiting time by providing real-time delivery options, choices of a time slot, notifications by email and SMS, etc. However, led by evolution, retailers are using software like field service management for before-time workforce scheduling. They are also using route optimization software for swift deliveries. Consistently adding value to their services, retailers are introducing new delivery options for various channels such as click and collect, premium same-day service, hyperlocal, etc. Taking these services a notch higher, retailers have now started focusing on one-hour delivery services as well.
The success of a CRM strategy will depend on the ability of the analytics data warehouse to provide automated actionable insights and will have the above expectation of unified data. CRM intelligence such as segmentation/micro-segmentation will be further refined on the unified data to better understand customer behavior and customer triggers that drive them to make a purchase. As the customer migrates to a different channel, CRM will understand and adjust accordingly. The customer engagement solutions will understand customer likes/dislikes at a deeper level and suggest the marketing manager’s necessary adjustments.
Different retailers will have different success rates on different channels. The channel communication cost and ROI will be useful feedback to assess the tradeoff between incremental sales and channel communication cost in addition to the cost of the transaction. CRM solutions will also largely head towards personalizing channels and effectively managing customer experience across channels. The channel engagement strategy will be personalized heavily based on customer’s past purchases and behavior.
Technology innovations, such as endless aisles and in-store kiosks powered by retail software, allow customers to order products that are no longer in store, preventing loss of sales while expanding the breadth of their inventory. With such advancements in retail tech, out-of-stock situations will become a thing of the past.
Offering quality products, accurate products, timely delivery, and a range of products to choose from, although play an important role in the success of any retail business, a seamless, secure, and convenient payment option nails it. Corresponding to such demands, some retailers have now started accepting multi-tender, multi-currency, coupons and customer loyalty cards online. They also link verified customers to transactions for efficiency and security. These endeavors by retailers are making the payment process more agile and seamless.
AI plays a dual role in the retail tech space, offering deeper insights into individual customer behavior while also facilitating a comprehensive understanding of overall business performance.
At the customer level, AI enables personalized experiences, elevating customer engagement and driving sales and loyalty for retailers. At the business performance level, retail software powered by AI helps retailers pinpoint the exact reasons hindering performance, supporting informed decision-making.
One of the most common questions these days: “Who will win the retail battle – E-commerce or the B&M stores?” has divided the entire world with solid arguments on both sides, but we may not have a clear answer or prediction at this point. The future may not have a single winner, but the gap between the online and offline is reducing to provide the best of both worlds.
Retail software integrated with VR and AR, provides customers with an alternative to the offline store’s ‘touch and feel’ experience through brands’ web fronts and mobile apps. Features like showing store availability of products on websites enhance inventory management efficiency—this concept of ‘reverse showrooming’ has rapidly grown in industries such as large appliances, jewelry, electronics, and furniture.
Similar retail tech innovations are being applied in brick-and-mortar stores, leveraging online tools to enrich the offline experience. Virtual mirrors, endless aisle merchandising, seamless checkout, and other advancements powered by retail software will elevate in-store customer experiences. For retailers, capturing offline purchase and user behavior data is a major leap toward gaining deep customer insights.
The emergence of Artificial Intelligence, Computer Vision, and Deep Learning will drive a radical shift in the way we interpret and capture data from the offline world, which until today was a big void for offline retail managers to fill. There are many ways in which the offline or in-store experience can be seen evolving in the near future.
The store traffic data will help brands plan the store staff at the stores by predicting when and which stores will expect how many visitors, thereby providing better customer experience. It can also enable retail managers to tweak their sales pitch and optimize the merchandise and aisle placement by understanding the conversion rates across demographic segments and traffic hotspots within the store. At an individual level, the technology is not too far from correctly identifying a customer in the store’s vicinity, thus providing the store staff with very customized and targeted guidance/instruction for every customer.
In totality, the way forward for the retailer is very clear- Technology. In the generation of an omnipresent consumer, being omnichannel is no more an option, but an imperative need. By focusing on a single channel, retailers stand to lose customers, and without being able to track their own customers they may be unable to provide a personalized shopping experience that today’s consumers demand. This lack of insight may also lead to delayed business decisions. By implementing these technological breakthroughs in their business, retailers stand to fulfill customer expectations and provide a rich and seamless buying experience, irrespective of channels. Retailers also gain valuable insights that allow them to make informed decisions, which result in profitability and incremental returns.
The path ahead for retailers is undeniably rooted in technology. Retailers who embrace retail tech solutions can meet customer expectations and provide a consistent, rich buying experience across channels. By integrating cutting-edge tools like Capillary’s robust loyalty software, businesses can go a step further—engaging customers meaningfully, fostering brand affinity, and driving repeat purchases.
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Modern retail software leverages technologies like AI, ML, and cloud-based platforms to offer features such as real-time inventory management, personalized customer engagement, and seamless omnichannel experiences.
Retail tech enhances the shopping journey through personalized recommendations, automated checkouts, virtual try-ons, and real-time inventory visibility, creating a seamless and engaging customer experience.
AI in retail software helps businesses analyze customer behavior, optimize inventory management, and provide predictive insights for targeted marketing campaigns, ensuring smarter decision-making.
Advanced retail software empowers businesses to stay competitive by streamlining operations, enhancing customer engagement, and offering robust analytics to adapt to market trends effectively.
Key trends in retail tech include AI-driven personalization, blockchain for supply chain transparency, AR/VR-enhanced shopping experiences, and sustainable retail technologies aimed at reducing environmental impact.
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