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How Retailers can Master Digital Transformation

First, there was scaremongering with the common theme ‘retail apocalypse’ highlighting the impact of online shopping leading to the demise of physical retail. Then, there was hope, as industry experts argued omnichannel integration was the only way, so brick and mortar stores needed to re-evaluate the best route forward for providing new in-store customer experiences and more convenient fulfillment services. Reaching an equilibrium between online and offline is undoubtedly the way forward as retailers scramble to digitally transform their brick-and-mortar stores to meet the demands of todays’ consumers.

From self-checkout, to click-and-collect, retailers are looking at ways to adequately optimize the floor space of each store. Walmart, for example, have worked tirelessly since 2018 to add digital in-store components. This includes self-checkout and mobile POS devices for in-store associates to instantly fulfill orders from in-store shoppers online via Walmart’s Dotcom Store. Amazon Go’s frictionless concept also deserves a mention here – particularly as Go was arguably the catalyst to strive for faster checkout. While Amazon has had to compromise slightly by expanding the POS options in several states to ensure cash customers are not alienated – no one can deny that frictionless selling is here to stay.

Walmart and Amazon are just two examples and if one looks further afield many readers will have seen the rapid success of experiential retail by Sephora as they focus on offering customers an experience in the store beyond the ‘traditional’. So how should retailers tackle the challenge of digitally transforming their physical stores? Below are a few factors that retailers should consider:

Review your IT infrastructure before innovating

Speed of innovation has become a key competitive differentiator, especially when it comes to deploying new in-store applications and services. However, before attempting to digitally transform the store, the retailer’s IT infrastructure must be ready to support these new applications and services.

Many retailers are plagued by legacy IT infrastructure designed for a different era and are therefore a long way from being future-proof. This will be a significant bottleneck for many, as retailers’ discover that their well-thought out plans for transformation are thwarted at the first hurdle, by a system that is simply not fit for purpose.

Store IT infrastructure, across both back office and front of store, is a critical determining factor when assessing the level of customer service innovation, staff productivity and IT bill of materials and cost. While the challenges faced by legacy infrastructure is understandable; there is a widely held misconception that innovation requires an expensive ‘rip and replacement’ strategy. In reality, however, the technology available today can optimize your existing IT infrastructure and still set you on the path towards digitally enabling your stores.

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Empower store associates within the store

With the rise in online ordering, scan-and-go and self-service kiosks, the emphasis for staff will shift away from manning fixed registers, towards more added value customer service. Customers now expect new service levels in-store to complement the online experience.

Store associates represent the face of the business and as one of the higher operational store costs can play a key role in driving upsell – if empowered.
Empowering store associates with the tools to assist customers, reduce lines at the register, provide advice in the aisles, help with fulfillment etc. enables the retailers to drive more sales and transfer strong customer support brand values.

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Connect your online and in-store digital components

While physical store sales are forecast to represent 80% of 2021 retail sales the reality is that many shoppers look at a retailer’s eCommerce site before journeying to the store in order to do research on items they’re interested in – or even purchase with the intention of collecting in-store. Retailers should ensure that their online and in-store digital components work in conjunction to offer shoppers the complete experience. For example, the level of personalization must be enhanced.

If the customer created an online shopping list or bookmarked particular items, the in-store technology touchscreens should account for each customer’s digital profile and quickly answer the customers’ needs in order to take their experience one step further within the store. In the same manner, any promotional offer made available via the retailer’s mobile app on visiting the store should immediately relate to the customer’s historical preferences.

Point of Sale devices running POSReady7 will soon be at risk

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Manage your store IT from the center

Many retailers have a mixture of old and new appliances all running on different operating systems with IT teams responsible for visiting stores to eliminate common faults or security threats. The burden on IT teams and the cost of downtime in-store is significant, not to mention the damage to brand reputation. The smart retailers are now looking at virtualizing their in-store IT onto a smaller physical footprint and managing the IT from the cloud. This enables them to eliminate costly store visits, provide a more secure IT infrastructure and above all manage all the stores from one central location achieving huge operational efficiencies.

Digital Transformation of the Store: It’s the way forward

As the store continues to build on its role as the key customer experience differentiator, forward-looking retailers are moving to an IT environment that provides the flexibility and innovation that they require. Digital transformation of your store estate and store space is not as costly or complex as many believe, and leads to many, many benefits.

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