With the flurry of bankruptcies and store closure announcements in 2017 and continuing into 2018, the phrase “Retail Apocalypse” has become the topic of many conversations. The doom and gloom of an apocalypse is very far from reality. However, there is no argument that change, turmoil and disruption is reshaping the world of retail.
There are a number of retailers who are thriving and many more who continue on a successful growth path. The common thread that weaves among these retailers is the leveraging of enterprise software, business practices and view of the customer to improve overall margin and customer service. The stability and elasticity of network technology, including SD-WAN, is allowing retailers to move many store-centric systems to the enterprise level (cloud) to increase effectiveness. For mature retailers, this has resulted in higher customer satisfaction, reduced application costs, and has become the cornerstone for real-time retail.
Successful retailers recognize the absolute need to keep the customer at the epicenter of the retail transaction. To achieve this, retailers are migrating to an environment that offers real-time access to enterprise-wide product information, customer preferences, and transaction history across all channels. To meet the new set of customer expectations, modern customer engagement, merchandising, order management, and inventory management systems must be integrated in real-time and seamlessly accessible by the sales associate. Top retailers are adopting and implementing a unified commerce platform based at the enterprise with real-time retail information available at the fingertips of their corporate users, call centers, sales associates and customers.
Customers’ expectations for a personalized and seamless experience requires retailers to follow their customers’ journeys across channels as they research, shop and purchase. The more advanced retailers take this a step further and use this technology to influence and lead the customer’s journey. This year’s POS/Customer Engagement Survey conducted by BRP found that 81% of retailers plan to have a unified commerce platform by the end of 2020 and 91% plan to offer order visibility across channels. To deliver on these goals and remain competitive in today’s rapidly evolving retail landscape, retailers must move systems to the enterprise level. This involves connecting in real-time and creating a consolidated view of all transactions across stores, online, mobile and, in some cases, a third party partner’s endless aisle environment.
This enterprise-centric model helps retailers achieve higher margins and improve data security for their customers and the corporation as a whole. By moving data from a distributed model to a centralized model it reduces the complexity of security and leverages the continued maturation of network tools to improve the security of the network. Enterprise security remains a critical pain point and opportunity as highlighted in the recent breaches of millions of customers records at Panera Bread, Best Buy, Delta Airlines and Sears Holdings, all within the last six months.
The Move to Enterprise-based Omni-channel Integration
Evolving and improving customer engagement is key to surviving. According to BRP’s 2018 POS/Customer Engagement Survey, 56% of retailers indicate that completing omni-channel integration is their top POS priority. The prevailing architecture approach is to migrate services and data to the enterprise platform, reducing support costs and the overall time required to make and deploy changes to the entire corporation. Unified commerce solution implementations have increased significantly from 9% last year to 28% this year. However, only 3% of retailers feel that their solution is working well.
The move to enterprise solutions is not as simple as swapping to a single system. It needs to be well planned, orchestrated, and architected. The consolidation of store systems to an enterprise-based set of real-time systems is the focus of almost all retailers. However, their priorities are often based on balancing the risk of aging systems failing, the demand to meet immediate business drivers, and the benefits of building a holistic enterprise data model and solution.
Customer Expectations are Driving the Move to Enterprise-based Data
Customers are demanding a personalized experience that includes personalized offers, suggestive selling and real-time product information. Retailers realize they need a new approach to enable a unified experience, an approach that supports the convergence of the digital and physical worlds as they engage their customers in a consistent and ubiquitous experience. Consumers expect a personalized, channel-agnostic experience in real-time. Retailers who successfully meet these evolving customer expectations are taking a holistic approach to defining their customer’s journey and understand that change is needed at almost every point in their enterprise.
Analytics, Business Intelligence (BI) and Artificial Intelligence (AI) are the Foundation
The use of enterprise-level data in real-time and near real-time has never been more important in developing and augmenting a profitable customer interaction. The rapidly maturing and expanding set of analytic tools at the enterprise-level are the foundation of identifying profitable customers, cost-effective merchandising sets, and delivering a personalized experience with suggestive selling and an experience-based loyalty system. Additionally, as the percentage of e-commerce transactions grows for most retailers, the need to use advanced analytics and artificial intelligence to solve the complexities associated with minimizing touches and freight costs is becoming an imperative.
While retail is definitely going through challenging times, the transformation is exciting with new technologies and opportunities arising to enhance the customer journey and support the expanded use of AI and BI tools needed to optimize the profitability of each transaction. The increased maturity of networks and network tools will continue to bring further transformation and drive fundamental changes in retail. A foundational component of reducing costs, enabling speed-to-market, and meeting or exceeding customer expectations in real-time is the migration of distributed functions to the enterprise. For retailers who are not well into their transformation to offer a ubiquitous real-time retail customer journey, the key to survival is to redouble their efforts before the competition puts them out of business.