Three areas of tech transformation retailers are set to embrace
September 12, 2018 | With Intelligence
By the Withpr Content Team
It is well documented that the high street is in a precarious position at the moment. Footfall is not what it used to be, and the struggles of some of the biggest retailers in the UK have been well-documented: Debenhams, House of Fraser and Homebase are but a few that have found themselves in trouble recently because they have failed to keep up with the evolving retail landscape. Retailers must be prepared to innovate and expand their in-store offerings in line with digital culture if they wish to continue to thrive. With this in mind, what are the three key areas in retail that technology is set to transform?
1. Supply chain management
In an industry where consumer-facing technology is so important for marketing and brand recognition, the potential for innovation behind the scenes is often overlooked. In fact, the supply chain industry has a very low level of digitisation, standing at only 43%.
In the time of the “me-now” consumer, who expects customizable and faster time-to-market products, retailers are re-visiting their supply chain and inventory models to identify where they can integrate technologies such as AI into the complex web of production and distribution to help increase efficiency and meet consumer demand. We’re excited to learn more about how AI can revolutionise the supply chain this week at Tech By Retail Week.
The latest Gartner Report shows that the leading retailers in supply chain management – such as Unilever, Nike and Nestlé – are scaling automation where possible in their supply chains, from manufacturing and logistics, right through to customer service. One such move that has hit the headlines is autonomous vehicles for logistics and delivery (such as Amazon drone deliveries). An interesting alternative to this that more brands are exploring is the move of supply-chains underground – installing pipelines directly to and from customer fulfilment centres to central consolidation centres at half the cost.
2. Hyper-personalisation and an omni-channel experience
Moving on to the customer-facing side of things, it is clear that the days of the ‘spray-and-pray’ technique – spamming the same offers at vast swathes of people – are now gone. We live in a data-rich world where retailers are racing to understand a new generation of customer – with ‘Generation Alpha’ the next upcoming consumer base.
The rise of e-commerce has driven the race to hyper-personalisation, with customers now expecting individualised offers as soon as they log on to their account, making it much easier and to shop online than in-store. Amazon leads in this kind of personalisation, with an estimated 35% of purchases coming from product recommendations based on algorithms.
The trick for in-store retailers will be creating this kind of easy shopping in the physical world. One good example of retailers attempting to bridge the gap comes from Hammerson Shopping centre’s ‘Plus App’. Through visual search AI technology developed by Cortexica, the app allows shoppers to browse thousands of items in each of their 10 shopping centres across the UK, simply taking a picture or uploading an outfit that they like, with the app showing customers where to find similar outfits. The only way to drive footfall and increase engagement with the high street is by embracing new technology such as this.
3. The in-store experience and the store of the future
By focusing on “clicks not bricks”, physical retailers have somewhat sacrificed their in-store experience for their digital offerings. However, bricks-and-mortar retailers are catching on that providing a frictionless in-store experience is crucial to their success. As such, customer experiences in physical stores are set to evolve massively in the near future.
Zara is one such retailer with one eye firmly fixed on the future in this regard. They opened their re-purposed flagship store, in Westfield shopping centre, Stratford, in May this year – to a fantastic response from competitors and customers alike. Features of their new ‘digital’ store included: automated online collection points (able to handle 2,400 orders simultaneously); a self check-out section that automatically detects garments being purchased; and interactive mirrors that suggest alternative outfits to the one you are handling.
The interactive mirror, such as Charlotte Tilbury’s mirrors allowing customers to ‘virtually’ try on makeup products without having to physically apply them, is an AR innovation that is not an uncommon feature among flagship stores these days. In particular, AR is increasingly a focus the in-store experience, and the session: “What retailers can learn from FMCG brands use of augmented reality” at Tech By Retail Week will hopefully illustrate the interesting ways new us on how AR can be leveraged for customer experience in the future.
By focusing on an omnichannel experience, bridging the gap between the convenient world of ‘recommended’ sections on e-commerce websites and the manual, directionless style of traditional shopping. Customers now expect fast and easy shopping experiences – and all innovations should help ‘Generation Alpha’ achieve a frictionless experience, and encourage them in to the physical store in future.