Namics: Five digital trends for the retail sector
1) Data collection: The digitization of space
Customers bring a lot of data into the retailer's showrooms. So far, however, it has rarely been collected. This means that bricks-and-mortar retailers are missing out on enormous potential: after all, the information generates revealing insights from which companies can derive appropriate measures or even new business models. For example, data can be used to answer the following questions:- Which products immediately catch the customer's eye?- Does the consumer touch certain objects to check the material?- What effect do advertising measures have?- What patterns of movement occur in the sales area?Amazon Go is a pioneer in the digitalization of the space. The American supermarket operates without checkouts, but customers have to register at the entrance using a smartphone code and their movements and actions on the sales floor are recorded by various sensors and evaluated by an algorithm.
(2) Offline, online, timeline: Networking data optimally
Data also plays the main role in the second trend: the more facts about the customer are available, the more important it is to network them. Smart shopping carts, RFID and iBeacon technology are used in the retail sector to collect numerous values offline, and a functioning link with data from other channels, such as customer relationship management or search behavior on the website, is essential in order to make optimal use of them. A sophisticated strategy is required to ensure that the values are combined to form a 360-degree customer picture, and the following aspects must be taken into account:- What data should be collected and what does it say?- Which platform is used to collect or link the data?- How is the evaluation carried out?- How can I use the original data for predictive and prescriptive analytics?Prescriptive analytics in particular are becoming increasingly important for retailers: they go one step further and enable the company to make additional recommendations for action. One example is the adjustment of parameters as part of a promotion in order to increase sales figures.
(3) From shopping to experience: the in-store experience
Customers themselves are also moving more and more in digital worlds. Be it online shopping or social interaction. To ensure that the experience in the real store can keep pace with that in the online store, retailers should rethink the design of their salesrooms and incorporate digital solutions.Smart screens can, for example, suggest matching accessories for trousers or dresses in the fitting room. The use of virtual reality, on the other hand, makes it possible to better plan furniture or pictures into one's own interior design. Robots can, for example, bring suits in a different size and color to the customer's dressing room. And thanks to intelligent mirrors, new outfits can be shared with friends via social media channels.(4) Disruption: B2B platforms on the riseFor the entire B2B segment, the entry of various global players such as Google, Amazon and Alibaba into the B2B business harbors both risks and opportunities. One thing is certain: in the long term, retailers will not be able to avoid platforms such as Amazon Business or Google Shopping. Anyone venturing into this still unknown territory must be prepared with a good strategy. Is the platform in question even relevant for the customer journey? What technological requirements do I need to fulfill in order to become active on the digital marketplaces? Retailers urgently need answers to these questions in the coming year.
(5) Technology: changing system architecture
In order to survive in the digital world, the right tools and methods are also indispensable in the retail sector. The technology behind them is becoming increasingly sophisticated and diverse. Thanks to modularization, software architecture is also becoming more flexible. The replacement of previously used systems is up for debate. Today, and especially in the coming year, companies are confronted with the following questions:- Software on premises or cloud-based services? However, this question is becoming less and less important, as many manufacturers now only offer their software as a cloud service and are doing away with on-premise software - Can AI be used to present offers in a more relevant way or to optimize channels? For example, it can help to suggest the right products based on browsing behavior.- How can data availability be increased across touchpoints? One touchpoint, for example, is the stationary checkout, which shows the retailer the entire purchase history of the customer in question.- How can the DevOps approach be used to create a continuous improvement process? For example, digital innovations can go live more quickly and be brought to the customer.Regardless of the decision, retailers should always bear in mind that change not only creates more convenience for their own company, but also for the customer.*Alexander Henss is Senior Principal Consultant at Namics.
