Through the years, the status quo of what we expect from the retail experience comes from customer demands and trends, and what retailers can sustainably innovate and keep up with. This back and forth has evolved retail technology through a few iterations, and I believe omnichannel solutions are the current baseline requirement.
Omnichannel will inevitably the foundation for future retail technology and with expansive capabilities, and permutations possible. Moving forward, there are those who are only starting to accept the fact, while others have eagerly embraced the methodology and practices of omnichannel and made it their own. Those that leverage omnichannel to give their customers a taste and expectation for a better experience, leave their competitors in the dust playing catch-up. We are seeing how this affects the retail landscape of entire regions, where retailers either step up or become irrelevant.
When we examine the full timeline of retail, look at the distinctive milestones, and see the innovations and technologies in recent years, we can appreciate and understand better how we arrived at our current point, and to take the initiative on what to expect from the future.
“If you really look closely, most overnight successes took a long time.” A meaningful quote by Steve Jobs which mirrors our experience in the advancement of retail technology, where the obvious change that everyone eventually sees is preceded by many tiny adjustments earlier on.
Let us track the notable shifts in the capabilities of brick and mortar retailers, to map out what the future might hold.
Retail 1.0
Retailer capabilities are offline, the cash register which has been around for a long time would be one moving part among many. Between excel sheets, manual entry, and keeping track of existing inventory, it is a disparate, time-consuming challenge. The customer base is primarily dependent on the location of the physical store.
Customers would experience stock-outs and pricing issues, the level of service was dependant on whoever was front-facing at that time, and if they had kept a paper copy of their till roll.
Retail 2.0
Here we begin having basic POS (point of sales) systems. These incorporate a combination of hardware (barcode scanners to update the stock level counts) and software solutions (end of day sales reports, and card machine support) the earlier versions were mainly on-site. This eliminated the disparity faced earlier, but still resulted in a silo within each outlet, making purchasing and returning between outlets a hassle.
Customer experience is basic, with little to no history or knowledge of the customer, deals and promotions were non-targeted and blasted en-masse and ultimately hit-or-miss.
Retail 3.0
Here is where retailers have capabilities that extend beyond the POS. The introduction of omnichannel transforms the silos separating online to offline into bridges and avenues for creative and effective strategies. Online to offline experiences become seamless and more than the sum of its parts as omnichannel shines.
Customer experience and convenience are at the forefront, customers are incentivised with personalised deals and promotions. This is an accepted ground where customers and retailers meet.
This is our present status quo.
For now.
Retail 4.0 and beyond
The silos expand beyond retail, in the near future retailers are given more freedom and control to go beyond their purview. Omnichannel capabilities serve as the foundation for integrated retail IT ecosystems and become the nexus for expanding to related systems.
These systems will have ERP functionalities that automate many processes. Master control lies with the retailer to synchronise the entire journey of the product from manufacturing, to warehousing, to delivery, for an unprecedented real-time view and understanding of his business and customers.
Open API platforms will be a requirement, digital solutions have to prioritise being technology and platform agnostic for ease of integration into existing workflows, or risk being an isolated link that loses relevance and is denied market share.
The future is one where both retailers and customers embrace a frictionless experience. Digital economy readiness will be the new standard, and the needs and wants of the customer are accurately anticipated through predictive analytics.
Ultimately customer loyalty belongs to the retailer who has a customer journey that extends beyond the brand and offers a closed-loop experience that enhances and supports the customer’s ideal lifestyle.
Image credit : Rytis Jonikas
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Kamal Karmakar, Khareem Sudlow
