Where are tech-savvy retailers investing their budgets this year? That’s the question on the lips of both retail budget holders and tech vendors.
Luckily, the US market research firm Forrester has already polled extensively around this question and Frank Lochbaum from KPS, suggests the answers provide an insightful snapshot of where retail is headed in 2019 and where we can expect the big tech breakthroughs to appear.
Forrester broke the responses down into hot, lukewarm and cool categories, depending on the retailer responses. Here, we’ll look at the ‘hot’ areas of investment, which promise to be the key battlegrounds for retail in the months ahead.
The personalisation conundrum
It’s becoming ever clearer that consumers are developing a love/hate relationship with personalisation. They love the benefits associated with retailers recognising them and generating accurate and relevant recommendations on past-purchasing behaviour, but they’re also worried about privacy. Forrester has used recent stats to show the fine line that retailers must walk. Respondents were asked what kind of information they were willing to share in return for personalised discounts and offers. For instance, while 36% of consumers wanted retailers to offer more personalised experiences, 59% of shoppers were worried retailers know too much about them.
When you dig a little further the type of information consumers are willing to share becomes apparent. Product specific data is fair game, for instance 60% of consumer are happy to share product preferences, 40% hobbies and interests, 37% favourite styles and colours and 26% are quite content to share how much they spend on products. However, when it comes to sharing wider on-line activities and data, the vast majority of consumers quickly raise a red flag. For example, only 7% want to share social media information and just 4% are happy to share details of friends and followers on social media.
The fact that the retail industry is having this detailed debate about personalisation, and discussing data at such a granular level, shows how far personalisation has developed and the sophistication that leading retailers are now achieving.
The solution clearly isn’t to avoid personalisation, the answer for forward-looking retailers is to ensure that they have the right systems, processes and infrastructure in place to collect the right kind of high-quality of data the full length of the customer journey and to build-in the flexibility and agility to react if the goal posts are suddenly moved.
This clash between personalisation and privacy will be critical in 2019 and beyond. Retailers capable of plotting the right course will gain a significant competitive advantage.
Get mobile and stay ahead
Mobile retail solutions have been a top priority for bricks-and-mortar retailers for some time, but Forrester’s research helped to bring renewed focus to key areas under the spotlight. These included mobile real-time monitoring, self-service anywhere and frictionless feedback.
Retailers revealed they want to achieve these goals for the full range of personas: shoppers, store associates, merchants, marketers, store operations and partners/suppliers.
Mobile solutions come with a tantalising list of benefits including a real-time, single view of customer, stock and order that can be simultaneously accessed by anyone with an internet-enabled device and the necessary authorisation. The implications for retail operations are nothing short of revolutionary. For example, a single view of stock will give your customers the ability to buy anywhere – online, in-store, mobile phone app, contact centre – with access to the same inventory. But achieving this 360-view takes time, effort and investment, and of course the real challenge is to update IT capabilities without wiping out margins or betting the business on new technology. That is why implementing the right processes and choosing the right retail consultancy is vital.
The reality for large long-established retailers is that they are not going to strip out legacy technology and introduce perfect inventory oversight in one giant leap. Board-level decision makers must grapple with complexities such as profitability of change, and the reality of implementation. They are asking: What new capabilities will new technology deliver? Will true visibility be delivered? Is the investment guaranteed to deliver a prompt and worthwhile return on investment? And ultimately, what will be the impact on the bottom-line?
Top level decisions must be made to invest in the right technology, with backbone, flexibility and longevity, that won’t simply prove to be a technology fad, locking a retailer into a costly mistake for years to come and progressing no further than an embarrassing stain on their annual results.
Time to double down on data security
Data security is another key area for investment this year. Data security clearly doesn’t drive revenue in the conventional sense, but it certainly protects growth when the alternatives are operational shutdown, the theft of customer data and the resulting reputational damage which ultimately translates to reduced sales and reduced profit margins. One of the big emerging cyber threats for 2019 is the prospect of hackers using artificial intelligence (AI) to detect and exploit weaknesses in retailers’ critical systems. The best remedy is likely to be bigger and better AI, capable of evolving to deal with the threat. Retailers who have trusted AI partners and whose processes and systems are configured to enable close working are likely to be best prepared for this step change.