Solving the retail industry conundrum by engaging the customer during the "moments that matter"
Large format retailers had lost USD 65 billion worth of market share since 2009 to the smarter, agile, new-gen smaller players, says a Deloitte study. During the same period, the market concentration has also decreased as well the competitive intensity has increased, this means for the same dollar-the past leaders in retail has lost their share to smaller players as well there are more no. of players fighting for the same dollar !
This doesn’t mean that only large retailers are under threat, every retail player is constantly being threatened by a new player or by technology which can be leveraged for converting that one prospect into a customer. Add to that the complex world of e-commerce companies threatening the brick & mortar players.
The head-on competition between ecommerce players and the brick & mortar players are compelling both of them to venture into their opponents territories, but this is fraught with its own challenges. In India, the big billion days sales by the online retailers ahead of the festive season resembles the frenzy of the black friday sale in US. Now every major brick and mortar retail chain in India has an online arm be it Tata’s CLiQ.com to complement their Tata Croma stores or the Aditya Birla’s ABOF.com to complement their More & Unlimited (erstwhile Megamart) stores to counter the likes online only retailers like flipkart, snapdeal etc who are eating into their offline business. But as the saying goes, enemy’s enemy is friend – it is said that Walmart is in talks with Flipkart to take on common rival Amazon in India. This competition and collaboration list is endless!
With all this in the backdrop, for the industry that is in a state of flux and to find a via medium for their common dilemma that arises between saving inventory costs or offering choice to customer along with providing an optimal shopping experience, the industry has a common friend in technology.
Some of the major challenges that a retailer faces today would include
- Inventory accuracy (including store level inventory visibility)
- Customer’s physical shopping behaviour
- Speed of fulfilment to meet consumer’s demand
- Connecting consumer’s online & offline behaviour
- Visibility into customer’s online shopping behaviour
Some of the ways thru which using technology (Internet of Things), the above challenges could be addressed include
If one can decipher the above technology based solution, there are 3 elements to the solution
1. Devices – This encompasses wide variety of devices such as point of sale terminals, RFID tags, sensors to monitor –lighting, force, temperature; beacons, NFC tags, digital signage, Barcode readers, Touchscreen based mobile devices, smart phones, communication equipment – switches, routers, wifi devices
2. Data – The amount of data that can be collected can be unlimited but in general one can classify based on data source such as instore data (pricing , transactions, past purchase history etc.), external data (social media mentions, likings, weather data, logistics related data etc.)
3. Analytics – I see this element as a marriage between the past & current data generated from the devices to the results that are generated for future purpose. Case in point could be, co-related purchasing patterns that could be associated between any two elements, ex: under certain weather conditions a customer buys certain product or when product A is purchased then product B is also purchased or during certain days certain products are purchased etc.
When all this are put into action, a retailer could offer a holistic shopping experience to his customer.
Here is a visualisation of how this could be put into action. In the not-so distant future, when you enter into a retail store you can experience this. The store’s app in your phone gets triggered by the beacon placed on the entrance with a customised welcome message with different options related to shopping alongwith exclusive offers tailor made for you based on your past purchase & your social media likings. Once you have shortlisted on the list of items you had decided to purchase, the live map guides you to the different sections where the chosen products are stacked up in the store. With the sensors placed in different aisles, your app may highlight on the trending products. If this happens to be an apparel store, the dressing room “smart mirror” may allow you to try different clothing and accessories by visualising how it pairs with other set of chosen products. Once the choice is made and while you are proceeding for checkout- the smartphone app triggered by sensors tracking your location, may ask you for applying the exclusive offer to the purchase. Upon making the payment with your “smart wallet” or NFC based payment option, the app acknowledges the payment and thanks for the purchase and offers a complimentary recipe or music download upon exit!
Wouldn’t this create a lasting impression on the customer for the seamless shopping experience it has provided and the customer also feels happy for the customised offers based on his/her likes - resulting in MORE SALES !
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8yVery good article KK. I just hope that retailers make this a quick reality for customers