Blogs & Opinions

Transforming your bricks and mortar retailer into tomorrow’s successful digital business

The future of bricks and mortar retail is bright, despite speculation to the contrary. But it is set for dramatic transformation and you should start preparing now. The rising costs of real estate, customers’ widespread adoption of new technologies and other factors are forcing retailers to seriously rethink their value proposition.

While physical stores will still dominate as far ahead as 2025, they will have evolved into bricks and clicks hubs, forming part of an overall digital business model, according to Miriam Burt, Retail Industry Research Vice President at Gartner. She said: “The digital store is not a store of the future, but rather a store of the past, present, and future. There is also evidence that the click and collect service is on the increase, and that the store will remain the heart of digital business execution.”

Selling and display space will be greatly reduced and there will be a much stronger focus on providing a differentiated customer experience. New technologies will be an integral – and differentiating – part of that experience, engaging customers in new ways and also increasing efficiency throughout the supply chain.

More than ever customers want retailers to service them based on a strong understanding of their individual lives and interests. Getting that right in the future will require advanced, AI-driven, predictive analytics that go far beyond any of today’s loyalty-card data applications. Personally, I can’t wait for that to happen – it’s hugely frustrating to me, for example, that my favourite retailer – an outdoor pursuits store – clearly thinks it’s engaging with me by sending me email requests to give it a review of something I’ve bought. The day they realise that inviting me to – for example – hear Sir Ranulph Fiennes remind us all that ‘there’s no such thing as bad weather, only inappropriate clothing’ will be the day my loyalty is sealed, especially if I can buy some of the clothing he’s endorsed.

Marks and Spencer’s loyalty scheme, Sparks, provides what it describes as tailored offers. While this is a commendable first step at targeted offers, especially as compared with most loyalty cards, the suggestions it makes don’t often chime especially loudly with my needs. But it’s still early days and, more and more, we should expect retailers to successfully predict our interests.

Those systems of knowledge will come to be fully integrated in real time with new systems of service, including mobile phone apps, covering social media and harnessing internet of things (IoT) technology to provide live, digital, personalised in-store experiences. And they, in turn, will have to be part of broader, unified and consistent experiences that follow customers everywhere – especially into competitors’ stores.

A great example of fitting the retail experience around the customer’s lifestyle is the brand new Amazon Go store in Seattle. It uses hundreds of ceiling-mounted cameras and sensors to track each customer and their shopping. Customers simply check-in to the store using their app, and everything they put into their bag will be caught on camera and billed. That eliminates the inconvenience of queueing, and also stops shoplifters in their tracks. Such innovation is key to competitive success, going forward, ensuring that your brand is the first choice for all your customers’ different lifestyles.

Technology will also achieve valuable supply chain efficiencies, both through greater horizontal systems integration – enabling real-time information-sharing, so that supply is driven more precisely in response to demand, and so that retailers can respond faster to shortages and seek alternative supply sources – and also through increased fulfilment direct from suppliers to end users.

And these IT infrastructure pieces are exactly the areas that Allied Worldwide is able to offer specialised help with. We have a rich pedigree in retail technology, with several key people – including our CEO – having come from that world. Our service portfolio of strategic consultancy, IT managed services, business solutions and e-commerce capabilities is ideal for retail. Indeed, we also have a specialist retail analytics offering for optimising revenue that delivers 2-3% margin uplift on average.

We recently helped a large fashion retailer align its entire business information infrastructure in one single view, enabling real-time decision making on a global scale. Solutions that were specified for EMEA were quickly adopted more widely – harnessing our global footprint and the power of our ‘Country-in-a-Box’ solution – enabling the client to deliver on its ambitious global growth plans. And capex savings that we achieved were used to fund customer experience innovations, ensuring that all retail systems were scalable and could cope with seasonal trends and peak trading.

Whatever shape your retail operations take, and however you choose to approach creating your own digital business, Allied Worldwide has over 25 years’ experience of helping customers harness IT infrastructure globally to achieve their goals. For more information please get in touch.