For retailers, factors like reduced time to market, less inaccuracies, no manual latency will be the differentiators
Suparna Goswami Bhattacharya
May 26, 2015: A couple of months ago, Tesco hit the headlines when it opened the world’s first virtual supermarket store in South Korea’s Seoul subway station. The pillars and platform screen doors of the subway station have been plastered with images of life-size store shelves filled with goods such as bananas, milk, sugar or chocolates which each carrying a barcode. Shoppers have to download a related app on their smartphone and make purchases by taking photos of the barcodes. In fact, if the barcode is known, consumers do not even have to stop by the subway station. For instance, if they want to replace a jam bottle, all they need is scan the barcode and the products are delivered later at home or office.
Though the above may not be a mass trend soon, since the web grocer model still has to mature and develop as a profitable one, the retail industry is surely at the cusp of change as the consumer’s path to purchase is experiencing a fundamental change.
|For one, mobile devices are now a necessary part of purchases — on-device, online and in-store. “Our 2015 State of the Market Report predicts that nearly 86 million consumers will make a purchase on their device in 2016 as growing consumer confidence in the technology fuels the drive towards buying on smartphones and tablet computers,” says Theo Theodorou, general manager EMEA at xAd, mobile location based targeting platform, which allows retailers to map consumers nearby and attract them into stores with relevant and targeted ads.|
In particular, apps which recognise a consumer’s location at any given time represent a large and growing subset of the mobile application marketplace. “These apps are changing the way we shop, travel, eat and connect. With an understanding of consumer movements, impulses, preferences and purchases, brands have the knowledge to meet the expectations of a generation of consumers who are looking for instant service access at any time, from anywhere.”
Though mobile will continue to drive change as it witnesses a rapid growth in international markets, many more changes in the retail space are expected to take place over the next couple of years. And Tesco’s virtual supermarket store is still only the tip of an iceberg. “We’ll see many more exciting changes in retail over the next couple of years. Consumers will expect to personalise their shopping, leisure and marketing experiences to a granular, person-by-person level and will continue to interact with stores via multiple channels, often at the same time,” says Giulio Montemagno, SVP of International at RetailMeNot, an American multinational company headquartered in Austin that maintains a collection of coupon websites.
And for retailers to survive in this competitive world, factors like reduced time to market, less inaccuracies, no manual latency will play a differentiator role. “We’re entering an era of change in the way retail companies look at IT. It has become a critical differentiator in how leading retailers operate – a real strategic asset. Retailers who combine an industrial mindset with strategic process automation to make back office work less tedious, risky and time-consuming will gain a definite competitive edge and be on the front foot to react to market changes and implement new technologies,” says Neil Kinson, VP EMEA at Redwood Software, a leader in enterprise process automation, offering solutions across the financial and retail space.
And thanks to the many channels available today, customers often demand and expect a seamless and a continuous, uninterrupted experience between store, online and call centre. This is challenging for retailers since for them it becomes all the more important to remove infrastructure-related bottlenecks.
“See, it is mostly retailers who think in channels, shoppers think about brands and they don’t care so much about where they shop. If a virtual store delivers a satisfactory shopping experience, is faster than an online order and less of a hassle than a purchase at a regular supermarket, they will most likely come back,” remarks Montemagno. If on the other hand it is just a concept to stir some buzz and offers no real advantage, shoppers will be less inclined to follow.
What is certain though is that the lines between the different channels are blurring and will continue to do so. Consumers are ordering online and retrieving their products at the store, or they may order the product online directly from the store when the product or size they’re looking for is not available online. “Going forward, retailers will certainly use digital channels more to bring shoppers into their stores where they can get not only the products they’d come for but also buy additional items they’ll discover while they’re there,” says Montemagno.
Dwight Hill, partner, with McMillan Doolittle, LLP, an international retail consulting firm feels that going forward most stores will be a combination of both online and offline. Though brick-and-mortar models developing ‘in-store digital’ experiences is common, there are online players who are setting up offline stores as well. “We are seeing pure-play e-commerce retailers opening stores like Warby Parker, Bonobos and Suit Supply. We are at our infancy in seeing how these efforts will play out,” says Hill.