It’s now or never: time is running out to adapt to the digital economy

By Perry Krug, principal architect, Couchbase.

This article is brought to you by Retail Technology Review: It’s now or never: time is running out to adapt to the digital economy.

Today's retail landscape is defined by the weight of expectation. Ever since Amazon made its mark by offering previously unheard of conveniences such as next-day delivery and unquestioned returns, modern shoppers have taken them for granted.

Now, most large retailers proudly display their digital credentials, offering sophisticated eCommerce experiences designed to inspire customer loyalty by putting them at the centre of the process; whether they are shopping in store, online or, increasingly, an omnichannel combination of both.

So what's the problem then? Society has put the pedal to the metal where change is concerned, and the retail industry is no exception. Strategies and products that brought the customers flooding in last year may be irrelevant next. Retailers that cannot adapt to new consumer demands will quickly lose customers, and have to watch their competitors disappear over the horizon.

Keep on moving

Cast your mind back just a decade, and consider how your buying experience unfolded. Was your purchase made through a retailer's smartphone app? Were you able to track your purchase at every stage, without calling customer service? Did you have a single, consistent experience across all channels, even if using different channels to complete a single purchase? More pertinently, were these luxuries available to you just three years ago?

The rate at which buying habits have changed is astounding, and on current evidence, only seems likely to increase. The modern, digital economy is now focused on the ultimate needs of the customer, and the customer knows it. Retailers are expected to know their customer's history and needs, and predict what they want in real-time. Online shoppers already demand that their application already knows whether they prefer red or white wine, for example. Now, they might demand that they're offered recommendations based on just the ingredients they're buying, with the ability to track their delivery in real-time, whether on their smartphone or their Amazon Echo.

Ultimately, the modern retail experience is focused around applications; whether they are harvesting social media data to more accurately profile the customer, or introducing AI to predict buyer behaviour. The mark of a successful retailer will be in how quickly they can adapt their applications in order to meet consumer demand.

The pressure is on

There is no time to stop for breath. We're in the midst of the 'golden quarter;' last year saw £24bn spent online in this period – a 12 percent increase on 2014, and this is an increase that's likely to be repeated in 2016, in which the UK has already broken Black Friday records. If customers decide to shop elsewhere in this period, a retailer is waving goodbye to a considerable proportion of its annual revenue.

Speed is everything in this environment. Festive buying habits could change with the popularity of something as simple as a particular film or song, so retailers need to be able to immediately react and respond to this. It's no good if it takes a matter of weeks to add a new product line to an app – the opportunity has gone, and the customers have already moved onto a retailer which can deliver. More nimble retailers, with the agility to update their apps and website on demand, will be the winners here.

This is just as true when we consider the new landmark shopping days that have appeared on our calendar over the past few years – the latest of which is China's 'Single's Day'. An eCommerce operation which groans under the huge weight of traffic on its app, or worse, which suffers an outage, is facing disaster. Customers will simply look elsewhere, and remember their experience next time around. Retailers need to remember that customer confidence is everything – unless online shopping applications offer a flawless experience to every customer, every time, regardless of the level of demand, that confidence will soon vanish.

Successful retailers, such as Dixons Carphone, have seen real success in these peak periods by ensuring they can scale their operations to suit. Instead of making customers wait to be served on Black Friday, Dixons Carphone ensured its database could deal with data in real time and give every single customer a faultless experience, which translated into record 2015 and 2016 Black Friday results.

Getting the basics right

In order to stay afloat in this new digital landscape, flexibility, adaptability and reliability should be the mantra for every eCommerce operation. Flexible retailers can accommodate constantly changing demand, adaptable retailers can quickly implement changes to every aspect of their business, and reliable retailers can guarantee performance remains consistent even at the busiest times. Most importantly, they can do this whether a customer is approaching them over the web, on a mobile device, or in-store.

To achieve all three, every eCommerce operation should take a look at the systems which power it. An application whose underlying infrastructure is incapable of making sense of reams of data on a demand-basis can no longer be considered an option in the new digital economy. Retailers need to be able to rely on their database to guarantee a faultless and reliable experience to tens of thousands or even millions of users, wherever they are, and whatever the level of demand. Given the sheer pace at which we as customers change our demands, the casual observer could be forgiven for wondering what's taking so long.