Technology can help reinvent the high street and deliver a new era of lean and mean retailers capable of capturing the imagination of a digital native generation. Given the carnage of the last 12 months, it would be easy to dismiss retail, especially on the high street, as a spent force. The demise of Debenhams and Arcadia has understandably rocked the retail world but in fairness, this has been on the cards for some time. The COVID-19 pandemic has just accelerated what was already in motion, a retail market at a tipping point between the large, traditional stores of the past and the modern, digitally-driven stores of the future. The emergence of online-only retailers Asos and Boohoo as buyers of the Debenhams and Arcadia brands just confirms the changing of the retail guard. This is now a digital retail age and everything from supply chain management through to customer engagement is being data-driven. The challenge for the larger, traditional high street stores is how to adapt and adapt quickly. Some, such as Next, have already been better at it than others but as history has taught us, technology change can be a great leveller.
Bad businesses are bad businesses, regardless of the pandemic and they were always going to be found out – Steve Ingram, Deloitte
It has enabled disruption across industries and in retail you get the sense that it has only just got started. According to Steve Ingram, a director and retail expert at Deloitte, Debenhams and Arcadia are just two examples of that shift, of brands that have ‘lost touch’ with the will and sentiment of the consumer market. And therein lies the problem. As Ingram adds: “Bad businesses are bad businesses, regardless of the pandemic and they were always going to be found out sooner or later.” So, what does this mean to other retailers? How can technology make them better businesses, more in-touch with their customers and more efficient and relevant places to work? And will technology help reshape the high street and lead to an emergence of more digitally-savvy and data intelligent omnichannel outlets? One of the interesting trends that is emerging, at least according to Ingram, is the idea of digital partnering, bringing several brands together in one digital marketplace. “That’s what Boohoo is going to do with the brands it has bought from Debenhams, a sort of online department store,” says Ingram. “It’s about having a digital platform which is scalable, enabling them to bring in brands easily and efficiently, without disrupting existing business and loyalty.” Even for a seasoned online retailer such as Boohoo, this is still a moment of truth, and it will take time to get a return on investment. But if other outlets are a useful measure of the value of partnering, such as Argos and Sainsburys, Next’s online store and, of course, the biggest of them all, Amazon, then it’s an understandable tactic. The challenge however, for all these and other retail outlets is to grow and yet operate more efficiently, use the technology to increase accuracy in stock management and delivery and ensure, in the words of Alan Sugar, “smell what sells.”
The latest breeds of OMS use AI to enhance forecast accuracy – Stuart Higgins, Bearingpoint
Amazon of course has been a master at this, blending customer knowledge with convenience, choice and great logistics and delivery. It has even reversed the trend and opened physical stores (there are now seven in the US, including Amazon Go grocery stores and bookshops) and of course owns the Whole Foods chain. If retailers are to learn anything from the Amazon success story it is to think differently about retail and the use of technology. As Stuart Higgins, partner at Bearing- Point says, “the stark reality is that the majority of retailers are still labouring with technology solutions geared towards store fulfilment,” and this, in a nutshell, highlights the cultural challenges of turning years of entrenched retail processes on its head. “Even before the COVID-19 pandemic, many retailers were struggling to meet the service expectations of increasingly tech savvy consumers seeking to blend their online and in-store experiences as part of a purchase journey,” adds Higgins. “The accelerated uptake of digital sales channels combined with a desire for increasingly contactless transactions in-store has left many retailers struggling to find short term solutions to overcome more entrenched legacy IT issues.” So, how do retailers manage inventory deployment in multichannel outlets? How can retailers enrich the online purchasing experience to emulate store-based colleague interactions and advice? And how can they guarantee stock availability for click and collect transactions and move rapidly to seamless, contactless, payments in-store? “Order Management Systems (OMS) are the key to unlocking the capability to fulfil online, from store stock,” says Higgins, adding OMS is the critical enabler of true omni-channel retailing. “The latest breeds of OMS use AI to enhance forecast accuracy, manage inventory deployment and stock allocation to meet specific order demand and also orchestrate the order fulfilment journey. This means that distribution or store colleagues can manage the pick, pack and dispatch process within customer fulfilment lead time promises.” Of course, omni-channel fulfilment requires a high level of stock file accuracy and Higgins suggests that RFID (radio frequency identification) is therefore critical. It is, he says, being increasingly deployed, not only in distribution centres but in retail stores so that stock can be made available for online fulfilment. Of course, once RFID is deployed in a store environment, it is also a critical enabler of the future, contactless, customer offer.
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[Customers] expect online experiences which focus on sustainability, convenience and creating experiences – Susanne Zander, Reply
According to Ingram at Deloitte, Spanish retailer Zara invested early in RFID and committed to having a tag on every product opening the way for a potential ‘touchless’ journey to the consumer, from supplier through distribution, store and checkout. RFID costs have plummeted in recent years making this possible but for many retailers it is not the focus, at least according to Fujitsu’s Global Retail Industry Digital Transformation 2020 study. Retailers, says the report, are responding to these challenging times by recognising that digital transformations are now essential to survival, such has been the shift to online across markets. While times are undoubtedly tough, technology budgets are increasing, at least for just over a third (40 percent) of retailers. The spending emphasis is, it says on digital transformation (39.8 percent) but also communications and networking and cloud services. To see change in action you need look no further than retail giant Walmart, which recently announced plans for localised, automated fulfilment centres to meet the dual demands of in-store and online shoppers. Using bots to retrieve items from the store, personal shoppers will then be able to assemble orders more quickly and efficiently. It’s the sort of plan that feeds that idea of personalisation, a much-vaunted term but one that has yet to really blossom in retail. According to Susanne Zander, partner at Reply, familiarity with online shopping has made customers more demanding. “They expect online experiences which focus on sustainability, convenience and creating experiences,” she says. “Hyper-personalisation is at the core of this, meaning retailers can offer exclusive experiences to each customer, such as deals based on their shopping habits or showing suggestions for alternate brands which they might like in their weekly food shop.” So, how do retailers get there? What do they require more than anything to make this happen? “Data-driven processes are key players in transforming this shopping experience with AI and ML enabling applications such as voice commerce, digital shopping assistants and interactive shop windows,” adds Zander. “By using the available data to understand what a customer likes, retailers can predict their future needs. Therefore, stable and accurate algorithms must be put in place to ensure that retailers have the ability to use new technology, to deliver a more personal experience.” Ingram at Deloitte agrees. “Data is going to be everything,” he says, “and many stores have had data for quite a while but it tends to be business operational data and they’ve struggled to use it or know how to use it. But this is the ‘what’ and stores need to know some of the ‘why’ to understand behaviours and trends.” As Jean Shin, director, strategy and content at communications firm tyntec suggests, retailers are now dealing with a new type of customer and it is imperative that they don’t just get to know that customer intimately but they also have the tools and intelligence to deliver experiences. “Online shopping makes it more difficult for customers to experience products in the same way they would in-store. Consumer emotions can range from satisfaction to frustration, which is why over 75 percent of shoppers choose to leave the site without completing a purchase,” says Shin. “According to SAP, companies must move from the robotic, unfeeling interface of technology to an experience where the customer can sense the people and brand behind it all.” For many years now, technologies to improve human interaction have been talked up, not least augmented reality (AR) and virtual reality (VR). For Raymond Ma, general manager for Europe at Alibaba Cloud, AR is just part of a mix of technologies needed to improve online and in-store experiences. Alibaba, of course is a company well-versed in retail experience having grown to become the world’s second largest retailer after Amazon, at least according to Global Data. In China it has a mix of grocery stores and physical retail stores, as well as online presence, and has been a pioneer in technology adoption, from digital payments using facial recognition through to automated service using robots. So, what does Ma see as some of the leading technologies that will not just invigorate consumer experiences but actually make products easier to try and buy?
Online shopping makes it more difficult… emotions can range from satisfaction to frustration – Jean Shin, Tyntec
“Virtual shop assistants,” he says. “These have been developed to understand and interact with consumers and bring a human element to the online shopping experience. They can bring products to life, by explaining product details and responding to certain inquiries, thereby helping to recreate a near human-like and more personalised shopping experience.” This experience is enhanced through livestreaming, which enables translation, while image search, he says, will improve browsing and remove frustrations when consumers try to find the products they want. AR, he adds, has a big role to play in “trying on different clothes and different outfits,” enabling images to be shared to get opinions and then there is presenting the products themselves. “Advanced 3D modelling technology has enabled the creation of virtual 3D products, which adds a whole new dimension to viewing products online,” says Ma. “Thanks to great advances in Object Character Recognition (OCR) technology and visual AI, visually impaired shoppers can also navigate sites with ease, too. OCR makes understanding images and videos easier, which means shopping is more accessible and enjoyable for blind and partially-sighted customers.”
Virtual shop assistants have been developed to understand and interact with consumers – Raymond Ma, Alibaba Cloud
Interestingly Ma talks about High Street retailers rethinking their stores completely, using the lockdowns as opportunities to reimagine stores. These retail spaces can become experience centres, that supplement an online store, offer special product displays and demonstrations, digital signage, VR/AR capabilities, play zones, relaxed seating and so on. Retailers, he says, need to be innovative, to not just drive sales but to drive interest and loyalty. At the heart of this has to be digital transformation but when retailers consider technology change and the impact it will have on stores and consumers, it’s also essential to think about the workforce. How can retailers ensure data accuracy, speed and efficiency in back office and supply chain processes? How can retailers change and plan?
Speed, accuracy of information and reduced errors in the back office will mean huge savings on the shop floor – David Starkings, TTS
According to David Starkings, business development director at corporate learning company TTS, people working in the background that have to use transformational technologies are often forgotten. TTS in Germany has worked with a number of supermarket chains and retailers, usually following large scale SAP implementations. Starkings points out that this often-forgotten area of change can have huge and sometimes detrimental effects on the business unless retailers focus on ensuring accuracy from the start. By that he means giving users knowledge tools to enable accuracy, especially with data. “Speed, accuracy of information and reduced errors in the back office will mean huge savings on the shop floor,” he says, and he has a point. Accuracy in data will make or break operational and customer insight, and it’s this sort of attention to detail through a transformation process that will surely empower retailers. The transformational challenge was never going to be an easy one in an industry facing the double whammy of COVID-19 and a rapidly evolving consumer base. But there is considerable hope. The high street is not dead, and in fact, has an incredible opportunity to re-emerge post-COVID as a dynamic centre for change, if retailers are willing to lead that change. At the root of this is data. That will feed everything, from customer insights through to supply chain intelligence and operational efficiency but that data has to be accurate and well-structured. As Ingram at Deloitte suggests, “there’s no use making better decisions on the wrong data, because it will just send you in the wrong direction,” and after the year retailers have had, that’s the last thing they would want.
Capgemini launches ‘retail innovation store of tomorrow’
Capgemini and experience platform SharpEnd have launched a partnership with global media platform, The Drum, to launch a new retail innovation store, CornerShop. Located in London, CornerShop has been designed as a ‘live testing environment’ for brands, retailers and shoppers to get – post-COVID – hands-on with the latest technologies that reimagine the shopping experience across food and drink, cosmetics and fashion.
The new approach will support retailers and brands as they seek to understand how digital innovation can enable new ways to evolve the customer experience, improve in-store operations and allow consumers to rediscover the joy of in-person retail.
CornerShop is split into four sections, each exploring fundamental aspects of the shopping experience: the automated store, the augmented store, the purposeful store and the personalised store.
The shop will allow visitors to interact with different technologies and purchase products from various brands. As soon as a visitor enters the store, their mobile phone becomes the retail experience remote control, leading them through the space and allowing them to engage with new shopping concepts and technologies. Some of the shopping experiences currently testing in store include a customisable store environment, virtual try-on technology, a ‘pay by the pick’ in-store farm, social distancing automation, and more.
Commenting on the launch of the store, Steve Hewett, head of retail customer experience at Capgemini Invent, said: “While the long-term impact of the pandemic on retail stores is yet to fully reveal itself, the events of the past year have radically escalated retailers’ needs to redefine the purpose and experience of the store and its connection to the ever-changing digital ecosystem that customers engage and shop within. This means it’s never been more critical to build the digital capabilities required to underpin a new shopping reality. Providing a glimpse at what retail of tomorrow will be, CornerShop has been specially designed to bring to life the most innovative technologies and how they can blend the physical and digital to create a seamless, differentiated in-store experience.”
Rob Hollands, managing director at SharpEnd, added: “As the change in consumer shopping behaviour continues to accelerate, brands must find new ways to connect, deliver relevant and engaging experiences and drive loyalty. From virtual-try-on to connected packaging, we’ve created an environment that allows brands and retailers to explore the technologies that provide the most engaging customer experience and the option to shop and interact in the way that best suits individual needs. CornerShop aims to help brands and retailers drive their transformation further and faster, explore the latest technologies and rapidly test and learn with real consumers, in the real world.”
Gordon Young, founder of the The Drum, concludes: “The pandemic has thrown the high street into crisis. Against the odds, we’ve launched CornerShop in the midst of lockdown to prove to brands and retailers that there are inspiring solutions available. We are excited to showcase new experiences, industry innovation and pioneering technologies that can help retailers not just survive but thrive in the post-pandemic world.”
The store is ready to host virtual tours and will welcome visitors in person in the near future, subject to government guidance.
