Retail’s Top Technology Priority: Digitizing Customer Experiences
Today, retailers with a heavy brick-and-mortar presence are hard-pressed to deliver on several fronts as the industry grapples with the best strategy for incorporating and optimizing digital best practices into physical store environments. Nowhere is this more apparent than in the search for more effective ways to collect and use in-store data more intelligently.
Through in-store data — which can be acquired via technologies such as Internet of Things (IoT) sensors, IP cameras and analytical software — retailers are able to gain real-time insight into shopper behaviors and needs, and serve customers better. By bringing digital best practices into store environments, retailers can shed light on data darkness and create a model for smarter business decisions.
At this year’s National Retail Federation Big Show, Samsung’s B-to-B retail vertical division conducted a survey of attendees to gather insight on a range of topics, including top technology priorities for the coming year. The findings revealed an industry that's shifting its tech priorities from the back end (e.g., inventory management and business processes) to the front end, which faces a retailer’s most important asset, its customers. In fact, according to our survey results, most retail decision makers are focused on how technology can help them create better in-store customer experiences, as the introduction of new digital technologies into physical stores have become top-of-mind.
Prioritizing Digital Experiences
The survey questioned a mix of industry professionals, ranging from brick-and-mortar and online retailers to supply chain and technology professionals. According to retail decision makers, the top in-store technology priority for this year is “deploying new digital experiences for customers,” followed by “improving in-store data collection and analysis,” reinforcing the shift towards not only serving customers better, but also having a keener insight into their needs through data.
Moreover, when ranking the top reasons for retailers to implement IoT technologies in their stores, the No. 1 response (out of four) was “enhancing in-store customer experiences.” This beat out “gain business intelligence to improve back-end resources,” which was ranked third. While back-end support will always be essential, these findings speak to the current trend in prioritizing front-end customer service, where enhanced experiences can mean the difference between an exciting, thriving store and empty aisles.
In other findings, it’s clear that retail professionals see the need to tie it all together and ensure customer experience remains seamless across online and physical properties. This may be why “Executing the right omnichannel strategy” was ranked as the most pressing technology challenge for retailers to address in the next three years.
Meanwhile, when asked if online-only retailers will require a brick-and-mortar presence going forward, the majority, 66 percent, said “yes,” echoing the trend of online retailers opening physical stores. Increasingly, we're seeing retailers blur the lines between physical and online retail environments, and recognition that when customers shop at either a digital or physical entity, they expect top-notch experiences in both channels.
As retailers embrace customer-centric strategies and aim to use technology to improve shopper experiences, new approaches will emerge. For example, the pop-up store model, which offers an ideal way to set up temporary shop to sell products or launch brands, is now becoming “connected”. This connectivity — driven by advanced software and analytics technologies — enables pop-up stores to provide retailers with data and insight on key store factors, including customer traffic, dwell time and demographics, enabling them to make better decisions on product layout, store design, scheduling and inventory management.
Lastly, when asked about the greatest benefit of pop-up stores, the top answer given by survey respondents — 53 percent — was that they “offer a way to experiment with and implement new digital technologies.” This, among other trends, further demonstrates that while challenges lie ahead, when it comes to embracing digital practices and new technologies in the physical retail world, more of the industry’s decision makers have decided they're ready to embrace the opportunity.
Ian Hutchinson is the lead for connected spaces, B2B retail division, Samsung Electronics America. John Gibson is senior manager, B2B retail division, Samsung Electronics America.
Related story: The 2017 Retail Technology Report