The winning way forward for physical retail owners is to leverage next-gen retail innovations that will yield high ROIs and create sustainability in the retail business
New Delhi: Steve Jobs once said, “Technology by itself doesn’t make leaders. Technology only amplifies true leadership.”
The retail industry is evolving fast. This evolution can be mapped through changing consumer demands and, most importantly, consumer behaviour. A decade ago, we would see cities full of busy retail stores and consumers waiting for the stock, even if it took a long time.
Today, not only has consumer purchasing power become more volatile, but consumers have also become more brand conscious. It is hence important for retailers to tailor their retail management to the current consumer landscape and what motivates them and their purchasing decisions. They need to also understand how technology is making all the difference in converting tangible customer delight to revenues.
The brick-and-mortar retail reset
The retail industry had its fair set of challenges during and post the pandemic. In the current economic scenario, we see retail businesses struggle with balancing product prices amid surging inflation or ensuring the right product stays at the right place when consumers most need it.
Retail business owners have had to embrace digitalization and shape their business models to make them more stable and profitable.
Why it is necessary to rethink the way retailers operated in the past and how embracing technology and digital tools will add value to the business:
To reinforce consumer relationships: Understanding the categories consumers focus on and responding to their needs will help drive value for the price.
To deliver a better customer experience: Knowing which product is needed at which store makes a huge impact on experience and inventory management. Without predictive data insights about product assortment and stock effectiveness, retailers risk losing customers to competitors.
To enable agility in retail operations: It is not just about making quick decisions or implementing new tools. It is also about building highly efficient retail workflows, enabled by technology.
Considering the complexities of consumer behaviour, technology is the most effective tool that helps come as close as possible to understanding consumers.
Given the wide variety of technological solutions available today, retailers often need help in understanding what solution to choose and now to go about it. Finding answers to some relevant questions help:
Is there a need for technology to solve the problem?
The need of technology in an environment needs to be evaluated thoroughly. The evaluation can be a direct comparison of the effectiveness of technology against the existing process. Technology should contribute to resolving the existing inefficiencies entirely or reduce them significantly.
Can the problem be resolved via an alternate process?
At times, we end up creating a need for technology to solve a certain problem only because we are rigid to change certain processes. This allows technology resources to be utilised at an optimum level.
- Benchmark the expectations from the Technology: Even technology needs to be benchmarked. There must be systems in place to benchmark and monitor expectations. Any technology is a combination of user and algorithms. A compliance mechanism must be maintained to identify effectiveness.
- Clarity about return on investment (ROI) against spend on technology: Apart from basic operational technologies, all additional technology solutions must contribute to helping a retailer increase sales. Hence, it is important to check ROI visibility.
Supply chain matters
When creating better customer experiences, four key factors need to be considered. These include: optimizing inventory, increasing sell-through, improving store freshness, and deflating excess stock in stores. All these points in one direction—it is time to reset the traditional way of managing supply chains.
Consumer purchasing ebbs and flows with time. With their behaviour becoming more complex to understand, an effective supply chain management strategy powered by digital retail innovation is as close as retailers can get to consumers today. That means offering the right product, price, and experience at the right time and right place when the consumers need it.
The big picture
The bigger picture is for retailers to realise the potential of digital retail transformation. With the retail curve returning to normal, people are excited to re-discover the joy of brick-and-mortar shopping again. At the same time, retailers have an opportunity to transform the shopper experience and maximize revenue simultaneously. AI, Big Data, and DevOps Automation are not simply technologies used to create digital retail software but are practices that should be deeply integrated into retail culture.
They eliminate redundancy or errors in retail operations and help retailers focus on more creative and value-driven business tasks. The winning way forward for physical retail owners is to leverage these next-gen retail innovations that will yield high ROIs and create sustainability in the retail business.
