The digital disruption in retail
The retail sector is a fascinating one when it comes to digital transformation. It was one of the first sectors to ‘go online’ – with a book store called Amazon becoming one of the first online retailers in 1995.
Almost 25 years later, however, many multi-channel retailers are still failing, with many major brands disappearing from the high street in recent years and not just their physical stores.
The first wave of disruption was a race for retailers to establish a successful online presence. But new digital disruption is now sweeping the sector, and organisations need to act now to survive the next shakeup.
A multi-pronged attack
Digitalisation is the biggest buzzword in the business environment today, and many different trends are wrapped up in this catch-all term. For the retail sector, there are four major digital trends that will influence their performance in the years to come. They are:
1. Internet of Things (IoT)
This is a technology that has been talked about for almost two decades, but is now approaching reality. It holds enormous potential – and threat – to the retail industry.
As it becomes more cost effective to embed micro technology into individual items, the impact becomes huge. Every item in a supply chain can be individually tracked. IoT could enable customers in store to choose the items they want and simply walk out – with sensors determining what they’ve purchased and automatically deducting payment via their smartphone. Smart shelves will ask to be restocked.
While most brands shy away from being the pioneers of this kind of new technology, once customers get used to it and embrace it, they will actively seek it out. Stores that are behind the curve will struggle.
2. Data science
Data is now much lauded to be a business’ most valuable asset. As analytics become more and more sophisticated, retailers need to make sure that they are collecting and combining all kinds of data, from sales trends by location, time and season through to more esoteric sources including the weather forecast, political landscape and social media trends.
By understanding all the factors that may or may not influence how people shop, you can better anticipate their future behaviour and deliver to their exact aspirations and expectations.
Many retailers today have introduced self-checkouts to speed up the purchase process, but this is just the tip of the iceberg and not leading edge. Many retail tasks can be automated, saving on people costs and relieving employees of the most menial jobs. US retailer Target is already using robots in its aisles to check stock levels and identify misplaced items. Meanwhile its staff are freed up to focus on customer service.
Other tasks that are ripe for automation are online chat functions on a retail website, ‘last mile’ drone deliveries to the door, along with many supply chain functions.
4. True multichannel retailing
Many retailers are exploring ways to blur the boundaries between online and in store shopping. One aim is to encourage people to shop in store with a mobile device in their hand – to help them locate the item they want and then access product descriptions and online reviews to help them make the decision to buy.
There are many products that people would rather view in real life rather than online. Technology can enhance that experience. With augmented reality, customers in store could view different furniture might look in their living room, or view products in different colours. Enriching the in store experience encourages customers to choose your brand for a high value purchase.
Clearly, embracing these revolutionary ideas requires investment, commitment and vision. WIL Group works with interim professionals that live and breathe major digital transformation. Businesses all over the world now recognise that the secret to embedding major change is to seek external expertise – the right WIL Group interim consultant could be the cornerstone of your future success.