Omnico was recently featured on IT Pro Portal answering the question “what does the future hold for retail technology?”. Steve Thomas, Omnico’s CTO, addresses this in the following article.
How can the retailers who don’t understand 96 per cent of their customers find out what they want?
What many UK retailers lack is effective omni-channel technology that provides them with an all-round picture of each customer and their history from every point of contact. This is very difficult to achieve when retailers are hindered by a mish-mash of disjointed, siloed systems.
To overcome this, they must use a new breed of omni-channel solutions that enable legacy and business-critical systems to connect seamlessly by sharing data and logic across all channels. Then they can understand customers’ product preferences, purchasing history, preferred channels and how they respond to various types of promotion. This real understanding of each customer enables real personalisation beyond the algorithm-generated recommendations used by larger retailers, which consumers now take for granted.
How does a retailer address the decline in satisfaction levels that gets worse as consumers use more channels?
Is it cost-effective to devote resources to this at present? It is a question of having the right technology. Shoppers today expect the same stock, offers and promotions to be available whichever way they shop. Omnico’s previous research showed that only 45 per cent of retailers have a consistent view of customer orders across all sales channels. Even fewer – 29 per cent – have a single view of all customer sales, refunds and other activities.
Stock-management is critical but why not have a more efficient central hub, rather than using stock in stores to fulfil orders? Isn’t that the real challenge?
Of course, ensuring maximum efficiency in a central hub is vital, but there are major gains to be had from making stock held by stores part of the fulfilment solution. What can be more inefficient than having expensive stock languishing on shelves in one location when it is in demand elsewhere? The stores of the future can become multi-purpose showrooms, order and sales channels and indeed, mini-warehouses.
These are important capabilities. Some 40 per cent of consumers in our research named lack of stock visibility or information as the biggest frustration in shopping. Customers now expect to see all the stock available and to be able to buy what they want wherever they are. In a store this requires digital displays and tablets to create an “endless aisle” of stock visibility, backed up by easy ordering and delivery.
The retailer also, however, needs a single view of all their stock and orders, with updates in real time. A revitalised company like Jaeger is using these methods without ripping out entire IT systems or relocating a warehouse or central hub, which is vastly expensive.
Although shoppers say they like the high street, how can retailers use technology to achieve more sales and combat its apparent decline?
After years of decline the UK high street is beginning to show signs of re-inventing itself. Our Gap Barometer research showed that 43 per cent of the public still prefer shopping in bricks-and-mortar premises, indicating that there is still plenty of goodwill towards the high street.
The renaissance may, however, take it in a new technology-driven direction. Intu, for example, gives shoppers the chance to click-and-collect through its website when they buy items from the retailers in its malls, making the experience very simple and easy. The increasing importance of leisure is evidenced in the planned opening of a Nickelodeon branded theme park at Lakeside in the UK. This convergence of retail and leisure means the high street may have to learn from the US parks in Orlando and introduce queue-busting advance online booking for restaurants and other facilities, perhaps with the option of cashless wristbands for greater convenience.
Having the technology to tie all this up, even in the high street, is going to be essential.
How should current returns policies be changed or amended? Where do they fit into the bigger picture?
While on the one hand retailers know that returns can be a make-or-break interaction with customers and require more flexibility, they know how costly this area of business can be. A survey from EY for example, showed that nearly a quarter of online clothing purchases are returned.
Retailers need to make more intelligent use of returns to mitigate their impact. The high number of items returned to stores means it makes commercial sense to keep them there and use them to fulfil online orders, rather than sending them back to the main warehouse. A company like Oasis, for example, does this very effectively, creating an endless aisle effect online.
Customer expectations are increasing all the time. They become frustrated and annoyed when they cannot return an in-store purchase through an online touchpoint, as they know they can do the reverse. Retailers who fail to invest in systems that give them the necessary flexibility and omni-channel integration to meet these expectations will definitely fall behind.
How do you see omni-channel developing in the next five years? What for you is the single most influential factor?
The future of omni-channel retail is already being seen in pioneering retailers such as Oasis, HMV, Adidas, Jaeger, Rose and Shoes of Prey.
Within the next five years we are also likely to see the integration of Internet of Things technologies in the shape of voice-activated digital assistants with a high degree of automation, taking care of purchases through interfaces with retailers’ ordering systems.
Technology to pull everything together will be the key essential, providing a platform for the elements of convenience, personalisation and a touch of theatre that will characterise successful omni-channel businesses.
It will allow shoppers to view stock wherever it is held, ensure items are sent with maximum efficiency, guarantee that promotions are consistent, relevant and personalised across every channel and underpin the returns policies that consumers want. It is the innovative technology that will make the difference.
Read the article on IT Pro Portal here: http://www.itproportal.com/features/qa-what-does-the-future-hold-for-retail-technology/