Retailers: Dismiss connected commerce at your peril this year

UK retailers experienced a difficult Christmas on the High Street, according to national statistics for December.    

So much so that Scotland was the only part of Britain to experience an increase in retail footfall, with growth of 0.2%, compared with the rest of the UK’s high streets and shopping centres, where total footfall was down by 2.2%.

The majority of retail brands are already under pressure to improve the performance of their bricks-and-mortar shops this year, yet if the plethora of January forecasts and predictions are correct, this will involve innovation beyond the simple act of increasing numbers through the doors.

For instance, Natalie Gross, CEO at Amaze, says more retailers will need to have the vision to understand how their physical stores fit within a full ‘connected commerce’ ecosystem this year, and start building for omnichannel and even the Internet of Things (IoT):

“Digital transformation and change is moving at an increasingly rapid pace and brands need to stop the boardroom talk, restructure and get a framework in place that is agile enough to evolve as technology does.

“If the web browser is the first dimension of the Internet and mobile the second, then IoT and connected commerce are the third. This technology is rapidly evolving and nearly every brand with a product is investing in IoT. Its applications are infinite, and so are the associated disruptions to business. Product design is going to be fundamental to IoT and connected commerce…while many brands have budgets set aside for innovation, they need to understand the possible applications first to ensure they are planning for the long term. 

“What these disruptions don’t necessarily mean, however, is that brands need to abandon their existing investment and digital ecosystem. Products may be changing as well as the consumer experience and business model but that does not mean you need to reinvent your digital estate. It is vital that organisations do not approach connected commerce and IoT as a gimmick – there needs to be real innovation and use.”

While some experts suggest the agile approach can be applied to something as small as the 10% of a 70:20:10 strategy, others believe it is a more fundamental requirement than that.

Jes Breslaw, director of strategy for Delphix, for instance, states that retailers must focus the early part of 2016 into their IT infrastructure, to place data at the heart of future innovation. And this could mean some heavy investment to get things right:

“This won’t be achieved through the same thinking as the past, but through a new vision where IT is a service broker for the business and able to run multiple projects simultaneously and with extremely fast delivery.

“However, whilst it has long been recognised that data sits at the heart of every retailer, the major bottleneck to speeding up the development process is getting the right data into the right hands and at the right time. This means that projects can’t be worked on in parallel, with development infrastructures shared between large teams both inside and outside the company, killing productivity.

“With such complexity and constraints, retailers need to take a data-first approach to their IT transformation. By centralising the data in non-production environments, it can be offered on-demand via a self-service portal or through automation tools. This means retailers can make unlimited, near-live virtual copies of data to speed up the development process and embrace IT methodologies like Agile, DevOps and Continuous Delivery that increase the efficiency of software development.

Omnichannel or die

Part of the connected customer’s expectation lies with receiving a truly omnichannel experience from a retailer, yet nearly half of all retail marketers have yet to implement an omnichannel strategy, according to a Rakuten Marketing survey of over 100 Chief Marketing Officers (CMOs) in November 2015.

Omnichannel may well be seen as a utopian view of digital’s future by some, but according to Pierre-Emmanuel Perruchot de La Bussière, general manager, Vend, 2016 represents the year that retailers will need to comply or die:

“Earlier this year, a study by MasterCard found that eight out of ten consumers now use a computer, smartphone, tablet, or in-store technology while shopping. And [this year], omnichannel is showing no signs of slowing down. In order to keep up, retailers will need to merge their physical and digital systems to serve the modern ‘omni-shopper.’

“Consumers now expect a seamless and unified shopping experience. In 2016, retailers will need to merge their physical and digital worlds to serve this new wave of shopper. We’ll see retailers make their physical stores stand out from the crowd by using ecommerce technology to transform the in-store experience, and more online stores will move into brick and mortar territory, whether through seasonal pop-ups or long-term stores.”   

Mobile journey

Of course, much of the omnichannel experience revolves around mobile, and indeed, much of retail’s future appears to revolve around mobile too.

Natalie Gross may have referred to mobile as the second dimension of the internet, but upcoming trends for 2016 suggest it will sit very much at the heart of the retail battle over the next 11 and a half months.

According to a report published at the end of last year, 33% of retail purchase journeys already solely involved use of a mobile device. This is a huge shift in buying behaviour, but doesn’t necessarily mean brands should simply ditch their bricks-and-mortar strategy completely in favour of getting mobile right. As La Bussière states, organisations investing in mobile solutions in 2016 need to be mindful of how these can be optimised to fit into a wider eco-system. This includes not only IoT, but more pressingly the mobile journey, how it connects with bricks-and-mortar shopping and the opportunities around maturer technologies such as click-and-collect and location-based marketing:

“Retailers are increasingly experimenting with mobile for new services such as click-and-collect, coupled with technologies like Beacons which let retailers know when a customer is near their store, reducing wait times to collect orders.

“Marks & Spencer, for example lets customers buy via mobile and pick up in-store, while others, like Argos, are using mobile to send text notifications whenever an order is ready for in-store pickup.”

And Gross adds that, “more focus needs to now be on how brands can engage with customers from a mobile perspective, creating the very best possible mobile experience”, and increasingly, part of this engagement piece will simply mean ensuring every mobile base is covered.

App experience

48 out of the leading 50 now have mobile apps specifically geared up for the buying process, and indeed, apps have become a major play for retailers in recent years as many try to reduce customer effort and the path of least resistance in making sales.

Yet a number of studies at the start of the year suggest many apps are not being used to their full potential; something that retailers will be desperate to rectify through 2016.

Teradata’s study, for example, highlighted that just one-third of online retailers that gather data reflecting customers’ preferences and get permission to send targeted push notifications actually make use of the opportunity.

Only 31% of the apps analysed were using personalisation in their messages, according to the findings, while just 13% used customer names.

More focus needs to now be on how brands can engage with customers from a mobile perspective, creating the very best possible mobile experience

The study also found that less than half welcome new customers to their app with an offer and of those in the top 50 that have retail stores, only half encouraged app users to visit.  In addition, none of the apps sent “abandoned cart” push notifications to alert customers to incomplete transactions.

And to reiterate the pressing need for improved omnichannel experiences, further research from Apadmi found that 59% of Brits do not download retail apps because they fail to complement and match up to the instore and website shopping experience.

The research also found that only 11% of consumers are interacting with their favourite retailers across all channels including its store, website, and mobile app.

“Not all retailers are using each channel to full effect and mobile apps are not up to scratch or consistent with the experience shoppers may have on the retailer’s website or instore,” says Nick Black, CEO of Apadmi.

“A staggering 71% of consumers stated there is room in the market for better mobile apps so it’s now up to retailers to invest in mobile to improve the shopping experience. And if done well, retailers should also see an increase in sales and loyalty to keep them ahead of the competition.”