Retailing has changed fundamentally over the past decade and the pace of change continues to quicken. The focus is no longer on making incremental gains but embracing new ways of working, including tight integration between retailers and wholesalers to transform in real time the stock range and mix available to customers.
With new market entrants taking a tech-first approach, Robert Sindall, SVP Solution Design at Anatwine, outlines the need to combine technical innovation with retail vision.
From customer experience to profitability, speed of expansion to market share, the difference between those retailers that adopt a technology first approach and the rest is becoming stark.
While Amazon is a clear example of a business that has not only changed the market but continues to dominate by reinvesting heavily in technology, there are many, many others. The speed with which Zalando, for example, has achieved success across multiple markets is primarily due to the company's continuous drive to use technology to innovate, from transforming logistics to delivering a fresh, new customer experience.
The challenge for more traditional retailers is the sheer scale and speed of tech-enabled change now required. How can the multi-channel retailer drive change not just online but across both the retail estate and wholesale? The agility and speed to market achieved by new tech-led players has proved the value of massive technical investment and innovation but for retailers still reliant upon legacy mainframe platforms to run the operations, from merchandise to logistics, making the change is far from easy.
The potential wins, however, go far beyond simply transforming the in-store experience by enabling store associates to use tablets to view stock in other stores or even across the entire business; by facilitating click & collect; or introducing innovative mobile loyalty programmes. While such technology adoption can of course enhance the customer experience and drive up sales, it does not represent the step change in retail innovation now required – and possible.
Rather than relying on a tiny subset of a brand's product mix, leading retailers are increasingly combining real-time access to brands' warehouses – and hence massively extended product range – with a standardised and guaranteed customer experience. Eliminating inefficiencies and presenting customers with unprecedented choice, retailers can maximise sales and improve customer engagement. Indeed, with a far more diverse product range to consider, customer personalisation can become a reality, enabling a retailer to present offers based on a massively diverse mix of branded goods rather than the tiny, highly subjective subset currently available in the warehouse.
Of course, technology alone is not the answer. Retailers need to determine how best to explore new platforms to transform the business, from improving the customer experience to leveraging analytics to fine tune merchandise in real time and expanding into new markets. Technology must be combined with the right expertise, corporate culture and a commitment to innovate. Boohoo's decision to hire tech entrepreneur Sara Murray is a clear example of a relative newcomer actively embracing technical expertise in its bid to stay ahead of the competition.
Technology is evolving at a phenomenal pace and the choice is both compelling and daunting. Retailers need to be constantly assessing the new ideas and technology, triaging to determine their value and quickly deciding the right strategy for the business. When start-ups can gain market share at an unprecedented pace, the market is clearly hugely challenging. But the opportunities for those with the right approach are also significant and can take retailers into new markets, a new customer base and a new level of profitability.