Think Tank: Pulling Back the Curtain on Retail’s Digital Transformation
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As the modern shopper’s expectations and standards continue to rise, retailers no longer have the wiggle room to make tiny mistakes or skate by unchanged. Shoppers today expect experiences that align with the smart technology they are already using, and they expect rapid and personal customer care responses in real-time.
The industry is at a moment when consumers can ask connected devices in their homes to order a new pair of jeans, receiving orders in two business days or less. Consumers are being conditioned from their very first shopping experience to expect the world. Simultaneously, retailers are hit with the harsh reality that if a customer is faced with extended lag-time, an out-of-stock notification, or even the smallest mishap while shopping — their customers can get the product they want somewhere else, faster.
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Instead of feeling inadequate next to big industry players, retailers should lean into change, and embrace new windows of opportunity, adopting innovative solutions that other retailers haven’t tapped. The industry is at a tipping point, and retailers of all sizes can affect change by leveraging the right technologies and customer data to make informed decisions, and become equalizers in the retail sector.
Avoid band-aid solutions
What retailers need to do to fix these problems permanently — and not just slap a band-aid over them — is start making changes to their strategic approach to evolve alongside their customers. If their business isn’t connected, they miss out on a key opportunity to have a 360-degree view of their business, including their web, mobile, social, digital and in-store presence.
Retailers that are winning in this space incorporate real-time customer feedback into frequent product and software updates. This builds trust and loyalty, in turn, positively affecting their bottom line. Retailers need to start investing in digital in ways that will benefit their business from a long-term, holistic perspective. The companies doing this now will get and stay ahead.
An example of a retailer leading the space is Nike — a global retailer that has lots of in-store foot traffic. In 2018, Nike launched “Nike House of Innovation 000,” their flagship store that incorporated a bundle of new solutions for streamlining in-store shopping. One of the most popular is their mobile checkout, which allows shoppers to check out without standing in line or even speaking to a Nike employee. Several retailers have incorporated mobile checkout into their in-store experience to drive sales, including Walmart and Target.
If you’re small, dip your toes in first
Regardless of company size, every retailer must find a way to start leaning into digital innovation, as well as customer feedback and data. A great starting point for smaller retailers is to leverage a mobile app to amplify their in-store experience. According to a Synchrony study, the number of retailer mobile apps doubled in 2018, and 83 percent of consumers are happy with the customer experience provided by mobile apps. The same study found that 50 percent of consumers prefer to use apps to access discount codes. There’s a major appetite for mobile in the retail ecosystem, which is why investing in an app is a great first step for retailers who only want to start small and test before building out a bigger experience.
Home Depot is an excellent example of a retailer that has curated a mobile app experience that truly benefits the consumer. The company’s app was rated number one in a 2019 Forrester report analyzing mobile apps, and has been praised for a feature that provides customers with the ability to scan barcodes in store to view mapping data and exact inventory availability. This feature empowers shoppers to get the information they’re seeking quickly, which is especially useful when store associates are not available.
Don’t be afraid to flip your current strategy on its head
If a company still relies on an age-old strategy that isn’t driving results anymore — completely rethinking their approach may be the best advice. The most innovative experiences don’t happen without a bit of trial and error — sales improve by change, not chance.
An example of this is legacy brand Ralph Lauren’s decision to launch their own coffee blends and coffee shops in New York and Asia. Even though Ralph Lauren has been around for decades and is prominent for their clothing — they rolled out luxury coffee blends which can be bought online and in select stores, which complements their long-standing brand nicely.
Ralph Lauren made the decision not by chance, but by considering the human element of shopping and needing a relaxing reprieve, and says on the company’s web site: “The smell of freshly brewed coffee evokes so many memories for me. Mostly of time spent with friends and family, the people I love. I wanted to develop these coffee blends in that spirit, and create a place where people could come together and take a break from their busy days.”
Ralph Lauren’s success breaking into coffee is a critical example of why retailers shouldn’t approach digital transformation. By looking at your customers, their lifestyle, their behaviors, your brand relevance and resonance, you can find opportunities to create complementary experiences that may appear nontraditional, but add value over and above the purchase of a piece of clothing.
Digital transformation doesn’t come with a manual and success metrics for every retailer will differ, which is why the companies that let their guard down and don’t play by the rules are reaping the greatest benefits. By carefully paying attention to how your customers are interacting with your brand, you can continuously discover new opportunities to create amazing experiences or solve customer pain points, which have a lasting effect on customer loyalty and retention.
Jennifer Shannon is senior vice president of marketing at Rangle.io.
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