Retailers are feeling the burn to keep up with the constantly moving target of consumer demand for an ever better experience. But as the pace of these demands accelerate, most retailers continue to operate on a six- to 10-month lead time to implement new innovations, with another couple of quarters to realize financial return from them (assuming there is any financial return). The race to keep up is on and the question becomes, “How fast can you move?”
Today, retailers use improving the customer experience as the driving force for change. Think of Amazon.com purchasing Whole Foods to create distribution hubs for shoppers for quicker home delivery. Or Warby Parker opening brick-and-mortar locations to make the search, purchase and try-on process more accessible to its customers. The downside? Investments like these take significant time and it can be difficult to measure the return on investment immediately.
According to RSR Research, many thriving retailers are taking a “fail fast” approach to their reinvention. Retailers that are succeeding understand that not every investment will work in their favor. The risk is worth it for the ultimate payoff for the idea that does work and keeps customers happy and coming back for more. But how can retailers justify this when their business is on the line?
Time is the most important currency brands have. Traditionally, ROI was measured by the cost to complete a project vs. the revenue generated — a measure which remains intact but is a limited understanding of the pressure now on retailers. With so many innovators invading all corners of retail, the time it takes to get something live and in testing is the more relevant metric. A key way to take down the competition is with agile, time-efficient business investments in innovative new experiences.
Leverage APIs in Commerce
Until now, figuring out the trade-off between innovation and business as usual has been a fool's errand. Everyone wants innovation, but it's been too “costly” to prioritize — too much time spent, resources used and budgets hitting their threshold.
An easy way to quickly act on swings in consumer preferences and habits is through integration with application programming interfaces (APIs). These flexible tools enable pieces of software to “talk” to one another. Within the commerce industry, APIs are used to create seamless experiences for shoppers by connecting websites to chatbots, mobile apps to smart speakers, payment systems to inventory management, and the list goes on. With APIs, the time to innovate rapidly changes and it doesn’t have to be a costly payoff.
In practice, it can be as simple as reimagining the checkout process. Sock retailer Stance took advantage of APIs to quickly deploy a progressive web application that's optimized for mobile. Stance built an app-less mobile checkout system that allows customers to skip the line and the need to download an app in short order. This solution was created in less than eight weeks from ideation to launch.
The key lesson here is that change doesn't need to take months, which allows companies to test features and their related processes before rolling it out fully. In the first month post-launch, over 30 percent of Stance’s sales came from the mobile self-checkout. Beyond the fast time to build, that also gave store associates more time to sell, less time wasted at the register and, ultimately, more incremental sales. The company currently has now deployed mobile self-checkout in six stores, growing to a total of 12 by end of year.
Retailers need to ditch the thinking that every investment must be decided based purely on costs and revenue. Time is, as they say, of the essence, and the essence is standing out in a competitive business. By taking the approach that time is the new ROI, retailers will find themselves able to build on the cutting edge of the retail experience and, as a result, succeed on more traditional ROI measures.
Jamus Driscoll is CEO of Moltin, an API-first digital commerce solution that embeds commerce into any channel, device or experience.
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