Digitalization of Retail: A customer first approach geared by agile technology delivery

A stalwart technology strategy leader Anurag, leverages around 19 years of insightful experience in both the physical and digital retail industry with multiple global retailers across SEA, MENA, ANZ, Europe, Americas and India.

With new-age, digital first businesses bursting into the retail space, and injecting development and innovation, retail has emerged as one of the most dynamic and fast-paced industries and witnessing an ever-changing landscape filled with advancement. Today it is more consumer-centric than ever, which is paving the way towards the biggest revolution in the industry globally. The pandemic has had significant impact in changing the buying behaviour, with massive boom in ecommerce adoption, across all demographics of consumers. This has driven a drastic business strategy change across global traditional retailers, who are now focussing on fast tracked launch of their digital channels and building an Omnichannel customer experience. Many major players in the industry are now engaged in experimenting with their business models to improve the customer experience, and implementing new technologies and innovations in order to transform the retail sector, and make it more integrated across all channels by combining both traditional and digital retail channels.

The expectations of digitalization in the Retail Industry

Primarily the retailer’s expectations are revolving around automation of operational processes, better control of data, and a seamless customer experience. The focus is concentrated on how to give a better in-store and onsite digital experience to customers by moving out of people and manual dependencies to a more system driven agile operating model improving bottom-line, and driving topline strategy with data driven decision, to impart an overall better experience to customers. As the retail industry is evolving and transforming in a widely positive manner the demands and expectations of the retailers are also evolving with focus on introducing more digital touchpoints across channels, and ensuring a seamless and homogeneous customer experience, in order to retain and ensure repeat purchases.

Role of Technology & Technical Strategy to excel in Retail

Information Technology which was considered just as a support function previously, is now an integral part of the retail business strategy, and contributor to both topline and bottom-line dynamics. From traditionally being considered as a cost center, it is now looked as a profit center. Today the retail industry is experiencing rapid growth globally. Advancement in technology offering in the sector is a key factor to this growth. With cloud and hybrid infrastructure setups, robust and industry aligned ERP’s and packaged solutions, AI driven customer personalisation, growth focussed BI and Analytics solutions etc., the retail industry is now conducting operations seamlessly, advancing in a more efficient way, and making the shopping experience more personalized for customers.

Management and processing of adequate data points is paramount to achieve an accurate demand forecasting and inventory predictions, as well as, understand customer behaviour and dynamics. However, this data needs to be secured, cleaned, and sanitised to be able to churn out proper analytical vision and help in driving business strategies. Technology is crucial, but it imparts the best impact when implemented in an orderly manner. There is no ‘one size fits all’ solution. The approach to any technological strategy should be a three-stage approach. The first focus is on the business idea and purpose. Next is, what technology elements are needed to achieve that goal. And then, it is finally followed by the technology tool that needs to be on boarded for the purpose. This streamlined business driven technical strategy helps increase the business growth, ensures surplus in revenue, and provides the best customer experience.

Brick & Mortar Vs e-Commerce

Brick & Mortar refers to a physical store locations to sell from, where customers can visit, and touch and feel the products in person whereas e-Commerce platforms are the digital retail channels from where customers can shop products from anywhere and anytime, but have only a virtual experience of the product. Both channels are going to co-exist as per the evolving consumer preference. Online stores have an advantage over physical retailers as they are able to sell the goods to the consumers 24*7. It is a real blessing for customers who don’t want the hassle and time requirement of in-person shopping. On the other hand, the offline stores are convenient for shoppers who like to understand the products, don’t want to pay extra in terms of shipping or convenience fee, and wants instant gratification.

Information Technology which was considered just as a support function previously, is now an integral part of the retail business strategy and contributor to both topline and bottom-line dynamics. From traditionally being considered as a cost center, it is now looked as a profit center.

However, the evolved shopper’s mind set is to explore both channels adequately, with decision making driven by multiple factors like type of purchase, price, essentials vs luxury, time to invest in decision making etc. For formats like grocery and QSR, online purchase has risen drastically. On the other hand, for luxury products such as premium watches, designer clothes and handbags, high-end automobiles, jewellery etc. consumers prefer offline stores to physically examine the products for quality check, trust issue, try-on, and more. Then there are formats like fashion and lifestyle, where the evolving trend is ‘research online buy at store’, and formats like electronics where ‘experience offline buy online’ is evolving.

Irrespective of the format, what essentially should be the core of the business strategies today is ability to be present in both channels, offer digital experiences in all channels and be able to get customers transitioned across channels with O2O and Omnichannel strategies. For some formats, online will complement the physical channels, and in others the vice versa. And, in some it can grow to equal and balanced contributions.

Hence, while one side we are seeing physical retailers launching their brand sites, trading through digital marketplaces, and offering in-store digital experiences of click & collect, reserve & collect, order at store with endless aisle fulfilment etc., on the other side we are also seeing the pure play e-tailers and digital marketplaces opening up physical kiosks or stores.

There is no one channel prosperity that is the game changer. It should be about co-existence and supporting each other’s growth.

Future of the Asian Retail Market

The young and growing population demographics is the main asset across the Asian region. They are quick, adaptive, and open to embrace new technologies. There has been rapid improvement in internet penetration and smartphone ownership, and availability of various mobile apps to support a digital savvy customer pool. Customers here are becoming more demanding on ease and convenience of shopping. This is influencing retailers to explore smart technology solutions across their physical and digital footprints, re-haul internal processes to focus on a customer first approach, and build their individual USP’s on the customer experience. It is early stages, but Asian market is gearing up to become the biggest future player in the retail industry.