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The rise of omnichannel shopping, with online channels allowing consumers to peruse and order products from the comfort of their own homes, is seen as the catalyst for the supposed downfall of retail.
However, all is not as it seems. If you study the hard-line facts, you can see that market drivers are pointing to a digital transformation in retail. The number of shops closing fell to its lowest level in seven years at the end of 2017, with some sectors recording growth and many retailers opening new physical premises. Reports show that 70 percent of retailers are now adapting to the internet of things (IoT). This shift is resulting in increased customer retention, because consumers experience a good omnichannel experience. Some 72 percent of retailers now view customer engagement as a top priority. Even Amazon, the world’s largest online retailer, has been moving into physical stores with its US-based book stores and recent acquisition of Whole Foods. Although the environment may still appear uncertain, it is perhaps indicative that we are entering a period of relative stability.
This was evident during National Retail Federation (NRF) 2018: Big Show in New York. From what I saw, the industry is nothing short of booming. Not only did the event break previous attendance records, activity in the booths of some of the world’s largest software vendors — such as Microsoft and Google — was evidence enough that the retail industry is far from declining. Of course, the sector doesn’t operate in the same way as it used to, but rather than slowing down, retail is undergoing a period of transformation that will see it offer a better customer experience than ever before.
There’s no question that there will always be a proportion of the population that is committed to the convenience of online shopping and will rarely venture into their local retailer. This is nothing new. Since the launch of the first mail order catalogue, alternatives to in-store shopping have been a part of the retail experience. However, there’s one critical difference between then and now — the presence of a person at the end of the phone taking your order. And although it’s an old-fashioned concept, it’s true to say that people buy from people — human interaction is still hugely valued, particularly where an opinion or input is required.
However, while people continue to play a crucial role in the shopping experience, we are reaching a point where this role is changing and diversifying. With the rise of e-commerce, traditional retailers are under pressure to find ways of matching the benefits offered by the online marketplace, while upholding the advantages that make them more attractive than their web-based counterparts. People can only do so much; it takes additional resources to compete with the technical capabilities offered by the internet. And thankfully, now there is technology available to retailers that enables them to do just that.
It is clear that the IoT is the catalyst that is enabling bricks to match clicks. Stores are becoming connected and big data is being used intelligently to garner a better understanding of how people are shopping. In turn, this is enabling stores to improve their in-store experience — something that is vital to being successful in the modern-day retail industry.
Retailers have long been collecting data from their customers, but the information harnessed from in-store sensors is delivering more actionable intelligence than ever before. The Cloud is also opening up new possibilities to businesses. For brick-and-mortar retailers, it’s helping them identify what products need to be replenished, how many customers are currently in the store and which areas they are dwelling in the longest. But above all else it’s giving stores the power to sell more by avoiding out-of-stock scenarios (one of the key frustrations of shopping) and enabling staff to engage with customers. Ultimately, it’s supporting retailers in increasing their conversion rates and average transaction values, which are a big part of maintaining and growing their profitability.
Retail is on the cusp of a revolution, yet human interaction is still hugely important. With the advancement of intelligent retail solutions, I believe that brick-and-mortar stores will evolve in a positive manner that will benefit both shoppers and retailers.
Carl Rysdon is vice president of inventory control solutions at Checkpoint Systems.
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