The retail industry is rapidly evolving. Digitally native companies are shaking up the sector, physical stores are adopting new instore technology and legacy retailers are turning to emerging technology to keep their competitive edge. In short, the retail sector has become a hotbed of digital innovation as brands seek to stay on top by delivering the fastest and most friction-free customer experiences possible.
Whether using biometrics to quickly access a banking app with their thumbprint or asking Alexa to remember a shopping list, consumers are growing accustomed to quick and seamless interactions. With consumer expectations at an all-time high, customer experience is more important than ever. From futuristic checkout-free concepts developed by Amazon to Marks & Spencer’s mobile shopping service, many retailers are now using artificial intelligence (AI) and mobile technology to improve customer experiences – speeding up shopping trips, cutting down on queues and making the customer journey as smooth as possible.
But it’s not as simple as investing in the latest technology available. Retailers must carefully consider their approaches if they are to create an improved, sustainable, differentiated customer experience through digital innovation. Otherwise, they may end up innovating for innovation’s sake – creating novelty value rather than real value for the customer. So how can retailers implement technology to improve user experience and help them engage with their customers?
Understand the customer
Organisations are increasingly using AI and machine learning to deliver more seamless, cross-channel customer experiences. While some companies have implemented AI to interact directly with consumers – such as SoftBank’s humanoid robot Pepper – many more are using AI to make sense of their data. The real power of AI and machine learning is the ability to analyse huge amounts of both unstructured and structured information, helping brands understand preferences and behaviours better in order to create more personalised experiences for customers.
The retail industry today is dealing with data explosion. The volume of information collected by retailers continues to grow but it cannot provide real value without smart analysis. By deploying technology to navigate these huge quantities of data successfully, retailers can speed up processes, reduce human error and improve frontline services. With AI and cognitive technologies, organisations have faster access to sophisticated insights. Real actionable intelligence gleaned from data analysis allow them to make better decisions to improve the customer experience. For instance, many shops now collect and analyse data from checkout lines, shelf refills and customer activity to tailor both store layouts and product portfolios so they can maximise customer satisfaction and sales opportunities. Implementing this technology gives brands an advantage as they can better understand their data and therefore, their customers.
Look to the future
We’re seeing increasing acceptance of futuristic or ‘cool’ customer experiences. Retailers recognise this and are implementing digital-first approaches to make this possible – from the instore experience to payment options. For example, Amazon’s futuristic checkout-free concept shops may soon become a more normal option for customers given the company is in talks to bring the cashierless technology to other retailers, including airport shops and cinemas in the United States. In France, the retail industry is soon to provide customers with a payment option beyond euros. Support for Bitcoin payments will be launched at more than 25,000 sales points across 30 French retailers, including Decathlon and Sephora, with funds being automatically converted into euros at the moment of sale.
Wearables also offer customers a futuristic experience. This summer, two of Sweden’s leading banks, Swedbank and Nordea, announced that customers with a Mastercard debit card could now tap-and-pay for small purchases via their wearables, without opening a new account. With a number of fintech startups and banks working on relatively simple tap-to-pay watches and pieces of jewellery for payments, retailers may soon see an uptick in customers wanting to pay via their wearable device. Yet despite the obvious innovation, this may not appeal to all customers. For instance, the Moscow Metro’s decision to offer dedicated rings and bracelets with embedded RFID has ensured travellers can ‘pay and pass’ quickly, with no need to dig out their wallet or phone – but does it improve journeys for commuters?
Add real value
When considering how to employ innovative technology to transform the customer experience, organisations must think about whether it will offer a better and differentiated customer experience – or if it is just a gimmick. While using wearables for non-contact payment is a cool concept, it doesn’t inherently add value. For instance, a metro system considering investing in dedicated wearables with embedded RFID might find it could improve customer experience by focusing on other aspects of infrastructure. By implementing a predictive analytics-powered system which takes in aggregate data from everyone on the transport network at a given time, the metro system could outline the most efficient route at one particular moment to speed up journeys. If a train were to be delayed, this information could feed into the system to mitigate resulting travel issues and provide a better customer experience.
Retailers must recognise when innovation is adding or detracting value for customers. Sainsburys trialled the UK’s first till-free grocery store earlier this year, refurbishing a London store to be mobile-first and check-out free. Yet it didn’t work for every customer – leaving those who preferred to pay with cash and card queuing at the helpdesk. As a result, the retailer has now added a manned till and two self-checkouts back into the store, allowing every customer to pay in the way that suits them. This is a perfect example of analysing data and feedback to better understand customers and refine digital innovation so it adds value for everyone.
For retailers today, a digital-first approach is an increasingly vital factor in providing the fastest and most friction-free customer experience possible. As more brands take advantage of the technology now available to understand their data and customers better, those able to pinpoint what the customer wants in order to meet their needs and add true value will quickly differentiate themselves from organisations innovating for innovation’s sake.
Credit: Sean Durkin, head of enterprise, UK & Ireland, OpenText