In theory, retailers have all the evidence they need to make the case for building the digital stores which are fast becoming a key requirement for ensuring success in a tech-enabled industry.
But it can be tricky to get commitment to developing digitally-enabled customer experiences without a solid business case for transformation. As with all new business ideas, retailers who aren’t prepared to take the long view rely on those who are more forward-thinking to take the risks and make the case for them.
The good news is that the retail pioneers who saw what was happening to the industry and decided to lead the charge are now seeing valid results coming from four fundamental initiatives:
Retailers that are weathering the current economic storm have fully embraced omnichannel. Allowing customers to shop wherever and however they choose is becoming a standard strategic element which is making a significant difference to the bottom line. According to global research and advisory company Forrester, retailers have seen omnichannel customers spending up to 22 times more than single-channel shoppers, with digital touchpoints driving all sales.
Colleagues empowered with tools to provide a cross-channel customer experience are also proving their worth – 35% of customers expect them to be able to check product availability, and 47% expect them to provide roaming checkout/payment facilities.
It’s an ongoing challenge to make customers feel special in an age of multiple touchpoints and rapidly-evolving expectations. It’s just not possible to provide great, context-specific, personalised customer service matched to their individual needs if there is no consistent way to identify a customer across channels.
Research by data management professionals Segment reinforces the value of personalisation in-store – 40% of shoppers said they had bought something more expensive than they intended because of a personalised recommendation from a retailer, and 44% said they would become a repeat buyer after a personalised experience.
3 On-demand fulfilment
According to Julio Hernandez, Global Customer Lead at KPMG International: ‘As part of an integrated customer-centric business model, customers expect that goods can be delivered or picked up wherever they are located. They want their orders consolidated, they want shipping bundled with service, and they want to be able to return things easily’.
Forrester backs this up – as much as 60% of online sales are now picked up in-store, with up to 40% of customers buying additional products when they arrive to collect their goods. And a number of retailers have reaped the benefits of ‘flexible reverse logistics’ by building global returns policies, cutting costs by around 50% in the process. With each failed home delivery costing the retailer £151 on average according to Barclaycard, on-demand fulfilment has measurable value to customers and retailers alike.
4 Core capabilities
You can’t transform customer experience without adjusting your core capabilities. None of these initiatives will work without developing a single enterprise view of the customer, and breaking down internal operational silos.
Each individual core capability will make a contribution to the bottom line, so it’s worth looking at what happens if retailers fail to invest in omnichannel customer experiences and the digital store. A survey conducted by RIS News found that they stand to lose 4.5% of earnings if they have unsynchronized processes, technologies and corporate structures that cannot support omnichannel services and functions from inventory management to personalisation and pick from store. In cash terms, that means a billion-dollar retailer could leave $45 million on the table by choosing not to invest in digital store strategies. It’s a significant amount of revenue in a market where every penny counts.
Let the results make the case
The results from retailers who have implemented these initiatives are doing a lot to prove the point that digital stores are the only way forward for brick-and-mortar retailers. The facts and figures are undeniable – robust enough to persuade even the most risk-averse retailers to support investment in the technologies and strategies needed to make digitally-enabled in-store customer experiences a reality.
About Dan Hartveld
Dan Hartveld has a global reputation for excellence in the field of mobile retail. He has developed award-winning, first-in-class commercial solutions for leading retailers including Topshop, Burberry and MasterCard. Known for his expertise in the practical application of innovative technology to achieve measurable results for retail, Dan is a trusted expert and advisor with a proven track record in real-world business.
He was instrumental in developing Red Ant’s Connected Retail Platform and rolling it out across retailers, and he was a key member of the team which won the prestigious IBM Watson Mobile Developer Challenge for its cognitive sales associate app.