The pandemic has forced retailers to become more innovative and adapt their services to maintain customer interest. Matthew O’Neill, Industry Managing Director at VMware, tells us why retailers need to incorporate digital thinking into the core of their business in order to avoid leaving them exposed and left behind.
Despite non-essential shops reopening in England and Wales in recent months, it is likely that the seismic changes within the retail industry caused by the pandemic are here to stay. Over the past year, many businesses have transitioned online, as brick-and-mortar shops were forced to close their doors. In addition, we have seen digital native brands taking more ground, for example with the acquisition of Debenhams by Boohoo and the online fashion retailer, ASOS, becoming the new owner of Topshop and the Arcadia empire.
The relative digital maturity of the retail sector, thanks to the already flourishing e-Commerce ecosystem, was critical in preventing many retailers from closing entirely during this period. However, shifting towards solely operating through digital channels still presented its challenges, in many cases forcing retailers to reassess their creativity and, in some cases, even their business models.
What’s good to see is that research from VMware reveals that this investment is at least starting to pay off. Almost one-third of the British public reported that retailers now deliver a better digital experience than they did prior to the pandemic, indicating the evolved role of e-Commerce stores in not just continuing but in some cases improving customer experiences. In line with this, one-third (32%) of the public have said that they are not missing in-store retail as much as they thought they would.
But the question that retailers need to ask themselves is how they are now going to build upon consumers’ increased digital-first habits to keep improving the customer experience and find the right ‘clicks and mortar’ balance between tech innovation and the in-store experience.
Creating novel customer experiences
Over the past year, we’ve seen a growing appetite for more innovative digital experiences in retail. For example, our research found that almost half (45%) of people would welcome an increased use of Virtual or Augmented Reality (VR/AR) by retailers to better understand how products might look in their homes.
But it doesn’t just have to stop at how it looks in the home. One truly innovative example of digital-first experience is the virtual Lipscanner app, created by luxury beauty brand, Chanel. The at-home application software uses automated reality to allow users to try on any of Chanel’s lipsticks virtually. Moreover, the app uses Artificial Intelligence to identify the customer’s lip colour in an image and recommend a matching shade in the collection., thereby allowing for personalisation and providing the customer with a tailored experience.
Experiences like these not only provide unique and engaging experiences for customers, but instil consumer confidence in buying a product remotely that would traditionally have been done in a store where they could physically see and test the colour.
Balancing security and trust
Data and analytics have played a critical role in the development of these new experiences, enabling companies to personalise their digital offering based on the customer’s previous purchases or location. Done sensitively, securely and correctly, the ability for retailers to build a consumer’s digital identity in this way can empower them in delivering automated, targeted marketing activities and improving the overall customer experience of their brand values.
However, retailers need to balance their appetite for data to inform customer experiences with consumer trust. Indeed, VMware research has revealed that the majority of British consumers (68%) feel scared or uncomfortable sharing their personal data with retailers due to privacy concerns. And without this, retailers will be left guessing their customers’ preferences and challenged in creating exceptional and personalised digital experiences.
In a climate of increased cybercrime and where vulnerable web apps are the main cause of retail data breaches, establishing this trust is no mean feat, but reinforces the critical importance of ensuring that in the pursuit of novel customer experiences, businesses do not lose focus on the security of their apps and software.
How can technology and the high street work in tandem?
The dawn of the hybrid high street is upon us and technology is core to helping in the transition to clicks-and-mortar stores to provide the best customer and colleague experience possible, to drive footfall and in turn to give outstanding service. For example, Amazon opened its first till-less store, Amazon Fresh, in the UK that automatically bills shoppers as they leave. But automating the traditional role of the cashier is not the only way in which digital technologies can transform the in-store experience. From interactive fitting rooms to electronic shelf labels (ESLs), providing a seamless experience underpinned by technology across all channels – physical or digital – will be key to the success of high street brands.
Next steps to success
Continued investment in innovation is fundamental to the future of the retail sector. It is essential in helping retailers deliver great digital and online shopping experiences, as those that do not put digital thinking at the core of their business will quickly find themselves exposed and left behind.
It’s undoubtedly a harsh lesson to learn but in order to win the hearts and minds of consumers, you cannot just talk digital, you need to think digital-first. Retailers have a real opportunity to differentiate themselves by taking a digital-first posture, creating apps and experiences that leverage leading-edge technologies – like Virtual and Augmented Reality, facial recognition and automation – to attract, engage and retain consumers both online and in their stores.
