With so much technology to choose from, however, a business might not know where to start or how to move forward. For this reason, we offer this guide to help any retail company determine where they sit on the tech curve. We’ll begin with some Essential tools and move forward in sophistication to Differentiator and Disuptor retail technology categories.
It’s important to mention early that even though solutions are readily available, one of the biggest stumbling blocks is integration. No matter how slick the tech, if the parts don’t work well together, you can lose valuable data insight, business efficiency, and sales. But when things do work smoothly, the outcomes can be phenomenal.
Essential Technology - The Nuts & Bolts
Before we get into more advanced, in-store or online possibilities, let’s begin with the basics. These proven, Essential solutions can be deployed rapidly with minimal business disruption.
Ecommerce - Website Vs. App
Ecommerce is a catch-all term for the ability to buy and sell products online. Any company can quickly set up an ecommerce website or app. They may seem similar, but there are important differences to consider.
Mobile websites are accessed through the browser (like Chrome or Microsoft Edge). Meanwhile, apps work as standalone, non-browser based portals which can be downloaded from an app store or via your company’s website.
Websites excel at:
- Product searches
- Getting to know the brand
- Appearing in web search results
- Working on different operating systems (iOS, Android)
- Support and maintenance ease
Mobile apps win at:
- Encouraging customer loyalty
- Direct customer engagement (discounts, sales, new products, and news)
- Improved user experience (faster, customizable, easy to use)
- Offline interaction
For many retail brands, having both a website and an app improve reach and outcomes. It’s important to keep both solutions integrated and transmit the same brand message.
Sales, marketing, and management tools can be deployed on pre-built (Shopify, Big Commerce, ATG, etc), customized implementations of these choices or others (Magento, BloomReach, etc.), or completely custom-built platforms. Mobile, web, apps, fulfillment, and online payment all must be fully integrated so there’s no process friction. For example, your warehouse system should be integrated with your online store so that orders are filled automatically and inventory is updated in real-time. Depending on the size of your company, these orders may be fulfilled from the store which is typical of smaller scale, single-location businesses or from separate logistics warehouses that serve both your retail locations and your e-commerce fulfillment. Your e-commerce platform should help you seamlessly manage this along with your other operating technologies (eg. 3PL or Warehouse Management).
Nearly everybody with a computer or cellphone has received some kind of personalized marketing. It could be an ad you see related to a personal interest or an email offering something you might like.
Personalized marketing analyzes interactions people have with your brand. It could be what they do when they visit your website (links, pop-ups, shopping cart, banners, etc.), see an online ad, or receive an email. All of this can be tested to find which tactics work best.
Eventually, you get enough data about customer behavior that you can send them content tailored to their preferences. The technology to support personalized marketing may be advanced, but it’s actually easy to use and affordable. Again, integration is critical, for example, make sure your e-commerce shopping cart connects to your marketing data analytics.
Retail Technology Differentiators
Now let’s move into more advanced tech territory. The solutions in this section gain more traction everyday. Retail companies are quickly catching on to the clear business benefits that these tools offer. We encourage all of our customers to have a smooth implementation (well integrated! Go Microservices!) of all of the essential technologies as well as these technologies below.
Inventory & Warehouse Management
No matter how amazing your website is, if your warehouse and fulfillment aren’t optimized, it hurts business. For instance, you might be fulfilling orders from your retail store thus incurring double shipping fees. Now, easily accessible inventory and warehouse management software enables operational improvement and control by a central command.
Some advantages to warehouse and inventory technology include:
- Real-time inventory tracking
- Automated reorder
- Demand trend analysis
- Accelerated delivery time
- Improved warehouse efficiency (picking, packing, labeling, putaway, kit assembly, etc.)
One of the biggest wins associated with automated warehouse management solutions is the reduction in human error. In one survey of 250 supply chain companies across the U.S. and Europe, the average mis-pick costs about $22. On average, the companies reported a total loss of $390,000 per year due to inaccurate order picking.
Upgrading from paper-and-pencil to integrated order processing results in an average 25% gain in overall productivity, a 10–20% gain in space savings, and 15–30% more efficient use of stock.
Although warehouse solutions are key, graduation to a greater business maturity level involves inventory and distribution management systems that are fully integrated with ecommerce and retail operations. Any roadblocks along the way could significantly limit business growth and advancement in the intensely competitive retail sector.
With the rise of online shopping, fast shipping has become commonplace for the likes of Amazon. With the democratization of logistics technology, however, rapid delivery can be provided by nearly any sized brand.
It begins with some of the tools previously mentioned, such as warehouse management software since it optimizes order filling. Next, parcel carriers (USPS, UPS, FedEx, DHL, etc.) can be integrated into the process for a fully automated, end-to-end system.
Everything from order placement to picking & packing to contacting the carrier to sending email confirmations can be accomplished digitally with near 100% automation. Meanwhile, you can gather data during the process to identify bottlenecks and make improvements.
For retail businesses, the interest in fast shipping is huge. These stats explain why:
- Over 70% of consumers name convenience (77%) and free shipping (72%) as top reasons to shop online.
- Up to 88% of consumers are willing to pay extra for same-day or faster delivery.
- Approximately 72% of Amazon Prime users name unlimited free delivery as the most important benefit of the service.
When we combine aspects of inventory/warehouse management and expedited shipping, we move into a fully automated fulfillment scenario. This requires full integration of all fulfillment components, such as:
- Warehouse and inventory systems
- Shipping automation rules
- Multi-warehouse integration
- Ecommerce order & payment platform and/or marketplace
- Shipping carriers
Again, seamless integration is the key to getting the most out of automated fulfillment. The benefits include meeting rising customer expectations and improved insight/control into your operations.
Curbside Pickup or In-Store Pickup
The COVID-19 crisis made curbside pickup a common household reality as people ordered takeout more than ever. This same trend spilled over into the retail sector. Now, the notion of shopping online and picking up your purchase at the store adds another dimension to retail strategy. The entire online + in-store relationship has led to new experiences never before imagined.
Consider what Nike does at their flagship stores with ‘Speed Shop’. Customers can reserve shoes and apparel online to try on in-store. When they arrive they find a dedicated locker with their name on it. The locker is unlocked with a smartphone.
Image source: Potsi
Meanwhile, the Finnish company Posti provides a parcel pick-up space called Box that has 600 stylish lockers to pick-up packages. The location has fancy fitting rooms, hang-out areas, a coffee station, and a space for retailers to feature new products. Also, what people don’t want, they can return right on the spot.
Omni-channel is intimately linked to personalized marketing. Omni-channel basically means selling on multiple channels since people shop in different places. For example, does your social media also enable purchasing capability? The key is to provide a frictionless experience from physical store to website to app to social media and more.
The goal is to enable conversion at any touchpoint and have them all interconnected. These days, 72% of consumers expect companies to know their purchase history regardless of the method of communication. A shopper might even make a purchase using their cellphone while visiting a brick and mortar store. All channels are linked to each other, and every one is integrated to your inventory system as well. From a central dashboard, you see individual channel activity and overall sales data at a glance.
This is the next iteration along the lines of personal marketing and omnichannel marketing. Both of those processes collect massive amounts of data. Predictive marketing goes a step further by leveraging audience behavior data, consumer research, purchase history, and website analytics to forecast marketing outcomes.
So instead of simply pushing out a fall fashion line, individual customers get shown customized marketing based on data analysis. Leads can also be qualified to predict which customers are most likely to buy, thus optimizing marketing resource use. Other predictive marketing tactics include the best time of day to show an ad tailored to user behavior.
The power of predictive marketing was boldly proven by a Sprint customer retention campaign which resulted in:
- 10% decrease in customer churn
- 40% boost in customers adding a line
- 800% increase in customer upgrades
Disruptive Retail Technology
At the more extreme end of the tech curve, we find this provocative category of technology. At the cutting edge, fewer companies have implemented these solutions. Still, they are already making a difference, and these tools may prove to be game changers for early adopters. Below are just a few examples to get you thinking of the possibilities for your company.
Visual search uses artificial intelligence to enable search through the use of real-world imagery, instead of text or voice search. Visual search works by a user snapping an image of an object (using Google Lens). The search software then identifies the object and provides search results, item information, and even the possibility to buy on the spot. Pinterest is a visual search pioneer, and they found that 80% of their users start with visual search when shopping vs. 58% of non-users.
By implementing a combination of computer vision, deep learning, and sensor fusion technology, the in-store payment and checkout process can be fully touch free. Today, at Amazon Fresh stores, customers can place items in their cart and leave without check out or lines. Meanwhile, payment is automatically made through the Amazon Go app.
Digital twins are software models of real-world items and even entire logistic process flows. As virtual replicas, digital twins are used to run simulations before real-life deployment. This enables in-depth analyses through big data, IoT sensors, and AI. Digital twins can simulate in-store experiences, spot potential flaws, minimize downtime, test new process flows, and even predict future scenarios. Digital twinning has already proven useful in the manufacturing sector.
Eyeglass brand Warby Parker leverages augmented reality digital twinning by providing an easy virtual try-on experience. Customers can download an app that activates their smartphone camera and superimposes a frame image onto the person’s face. In this virtual mirror, customers can even move their heads side-to-side to see how the frames look at different angles. Purchases can be made on app as well. This is an example of how digital twin technology brings the brand experience even closer to end-users.
Supply Chain Robotics
This category encompasses an immense sector that ranges from autonomous freight trains and trucks to warehouse robots and in-store inventory tracking/replenishment machines. Robots are actually a collection of technologies including AI, navigation, and IoT. As costs fall and regulatory hurdles are overcome, we can expect to see more robots being used to accelerate the supply chain.
Integrate & Lead Retail Into the Future
There’s never been a more exciting time for the retail sector. Amazing advances are being realized in processes such as fulfillment, as well as in hyper-personalized marketing and dynamic in-store experiences.
One place where some brands might drop the ball, however, is in integration. All these incredible solutions won’t be nearly as effective if they don’t work well together. Despite many solutions being available off the shelf, make sure they work well with your existing systems to achieve the highest ROI possible.
As AWS Advanced Partner, Azure Gold Partner, and Google Cloud Platform experts, and deep experience in microservices architecture and implementation to make all of the technologies listed above possible, Xerris can help you improve retail performance through integrated technology.
Reach out and discover how we can propel your retail brand forward on the tech curve.