Digitization is becoming the key differentiator for the retail industry worldwide as it empowers the consumers as well as the retailers. This was a recurrent observation among the who’s who of the retail industry at the two-day Retail Technology Conclave (ReTechCon 2015) held on June 17-18 in Mumbai.
The retail industry’s empowerment and indeed that of consumer through the digital world is making all the difference in the retail world. And due to increasing customer expectations and their ability, willingness and the desire to put their feelings out on the World Wide Web about the smallest of their experience has changed the rules of the game. The reach of internet can make or mar the reputation of many a retailers. Especially if the player is small, how does the average retailer use the digital world to successfully do business and tackle crisis as and when it occurs?
The technology base that has made the average consumer a very powerful figure is evident in the shifting world of technology that is amplified through social media. Keeping this in mind, the ReTechCon speakers spent considerable time in creating awareness about the latest global technology trends in the world of retail. They felt that digitization would be an enabling factor for
● helping traditional retail businesses cope and thrive with the help of technology
● helping inclusive adoption of technology in the retail business as a whole
● bringing IT solution providers and seekers onto a common platform
According to a “Retailing In The Digital Era” report prepared by PWC for the Retailers’ Association of India, “digital touch points such as electronic POS, mobile applications, websites, customer loyalty programmes and interaction with retailers on social media help gather customer-related data that can be translated into valuable insights”. This is also true of the brick and mortar retailers. The speakers at the ReTechCon conference emphasized the importance of incorporating these digital points in the larger game plan of each and every retailer.
This is because the digital space will not only get bigger but will also see changes faster and therefore it is imperative for retailers to bridge the gap in the consumer experience in the digital and physical world felt many speakers.
Worldwide, there are about 6.8 billion mobile subscribers and 2.7 billion of these are online. Mobile broadband subscription is at 2.1 billion and over 1 billion people use social networks. India is the second largest user of social networks, R. Chandrashekhar, President, NASSCOM, said.
Across the world, the retail landscape is going through a major metamorphosis triggered by “disruptions” such as global demographic shifts, changing mobile phone technologies, surge in social networks and the evolving role of the store. In the developing world, social network is part of the daily fabric of buying, Chandrashekhar pointed out. These developments do have an influence on product design, lifecycle, results in closer interaction and impacts demographics and reach.
Alongside data explosion, social media has grown in leaps and bounds. Also, the number of channels to connect to the consumer is increasing along with shifting consumer demographics. Technology is enabling retailers to retain their competitive edge and stay relevant to their consumer base. The “disruptions” are also changing priorities for companies in the areas of SMAC (social, mobile, analytics and cloud) technologies, security, which includes data security, enterprise security, Radio Frequency Identification (RFID) and 3Dprinting.
The eco system of retail industry necessitates building a single customer experience, stepping up skilling of employees and modernizing merchandising systems. In this context of technology redefining consumer experience, Burberry World Live was an appropriate example, according to Santosh Sagar Reddy, India Retail Practice, ThoughtWorks.
He said Burberry is bringing live catwalk shows real time on to stores. It brings every aspects of the website’s content including events such as catwalks, music among others in to the store.
Today, retailers are inclined to look at all kinds of data to understand consumer behavior. Images of consumer browsing patterns from CCTV also help retailers understand patterns in buying. Data including CCTV images help retailers to find out what is relevant to shoppers.
The concept of “profiling” may have a wrong connotation in the normal world but for the retail industry it is a means of understanding its customers and thereby working on the correct connections with them.
Retailers are now beginning to use big and small data to understand consumers and changing buying patterns. Retail companies will have to take on analytics at some point of other, speakers at the conference said. Today, the scope of analytics for retailers has graduated from simple mining techniques to complex statistical and machine learning algorithms to uncover latent patterns in data as well as predict future outcomes, PricewaterhouseCoopers said in its study released at the conference.
“With the disruptions in the retail industry today, use of analytics can help organizations build efficiency in decision making,” the study said. Retailers can no longer rely on historical shopping behavior as consumers increasingly expect more personalized, digital experience, PWC said. Customer experience has emerged as an important lever to help retailers create a niche for their brand in the minds of the consumer.
Analytics can play a major role in addressing key concerns and thereby enhance customer experience, the study said. Many Speakers felt like wise. Smart data can fuel smart decision, said Anupam Dixit of Twitter. In an era when the mobile phone is one of the most important contact points, brands will have to target moments, according to him. On an average consumers unlocks their phone 110 times a day, he said.
Connecting at the right moment with the consumer is very important. He pointed out to two examples – running and hunger. Conversations in the social media space about these subjects typically have fixed patterns. Therefore, connecting with the consumers at crucial moments can offer great opportunity for retailers and manufacturers.
Retailers and marketers will have to understand social media conversation patterns to know when to strike with the right message. In the complex world that we live in buzz words such as hunger, food retailers and manufacturers give the retailers a perfect opportunity to intervene.
A study done by RAI and Octane said, customer acquisition continues to remain the primary marketing goal of retailers, both offline and online. Social media marketing saw a spike of 30% in FY2015 compared with the previous financial year. The study also said that 83% of online and 76% of offline retailers uses social media as their primary online activity, the study said.
Mobile phone is very important element in the marketing plan for retailers, the RAI-Octane study said. About 95% of retailers voted for mobile as an important part of their marketing plan, the study showed. A closer look at online marketing initiatives showed that social media remains the top most priority of retailers. Social media is the most prevalent channel for customer engagement. E-mail marketing and SMS marketing continue to be high too.
“A huge proportion of Indian retailers already use social media as a part of their online activities and a massive 74% of retailers want to increase their investment on the same,” the study said.
Internet of Everything is the next new frontier in the digital era, said Joanne Cheigh, Director, Cisco Consulting Services, Asia Pacific, Japan and China. Internet of things or everything is a network of physical objects embedded with electronics, software, sensors and connectivity to enable it to achieve greater value and service by exchanging data, according to Wikipedia.“Internet of Everything value is not in the number of connected things but in connections between people, processes, data and things,” Cheigh said.
For the retail industry, more the data sources more the connections, she said. In the data driven approach to retailing, three steps are key – benchmark and manage, identify root cause as to why they are buying and why not and finally anticipate and respond like the smart store. Consumers, according to her, want efficiency followed by savings and then engagement.
Trust building is key element for retailers especially as competition heats up, speakers said. Digital retailers will have to make sure they sell good quality goods and products.
As buyers increasingly reach out to their laptops, tabs and mobile phones to make purchases, retailers are likely to step up their investment in omni-channel retailing. Many retailers are trying to integrate online channel with store channel to create a seamless experience.
Adidas Group recently announced that it will rollout Omni-channel model at its retail outlets in Punjab. The company aims to fully integrate 200 outlets using this technology across India by March 2016.There have been instances when customers walk into the store but end up buying online, said Abhishek Lal, Senior Director E-commerce, Adidas Group India.“We want to know who our customers are and we want to talk to them,” he said.
Integrating online and offline is essential and that would entail backing each store by e-commerce fulfillment centre. This helps in empowering the store manager. “A key challenge today is getting the offline team to connect with e-commerce team,” said Sumat Chopra, Head eCommerce, Godrej Nature’s Basket. Integrating is key to keep operations seamless, he said.
Omni-channel retailing is more about experience. There are instances where many customers come to the e-commerce sites but do not buy. The reverse is also true where customers walk into stores but end up buying online. Many brick and mortar retailers are keenly opting for omni-channel retailing though it does involve making large investments in digitization.
The evolution of shopping technology leading to a whole new retail experience will drive the way forward for this industry.
