Powering Retail's Next Decade of Digital Acceleration
Powering Retail's Next Decade of Digital Acceleration
The role of technology, ecosystems and customer experience in powering the digital acceleration of the retail industry
BRAND CONNECT| PAID POST
Published: Feb 24, 2022 04:39:26 PM IST
Updated: Feb 24, 2022 05:04:41 PM IST
Sanjeev Seshagiri Athreya, Head of Retail & Commerce Practice and Anitha Rajagopalan, Domain Specialist at Thoughtworks
A customer walks into a retail store, the store’s staff aided by digital technologies knows if the person is an existing customer or a new one. The staff, aided by knowledge of the customer's online cart, begins to meaningfully engage with the customer. This is augmented reality in action – an effective tool integrating online-offline shopping experiences.
The retail space has been witnessing a global shift in consumer behavior, enabled by technology and accelerated by the pandemic. In 2021, the Adobe Digital Economy Index, Q1 2021 estimated online spending on eCommerce could touch USD 4.2 trillion; equivalent to a top-five country based on GDP.
Today, global retailers are laser focused on adapting to evolving customer behavior. They seek to go beyond the silos of segments, channels, touchpoints and even operating models. Forward thinking retailers are investing in foundational platforms to accelerate capability development, scale and adapt. In addition, the pioneers are strengthening their supply chain with increased automation, enabling faster fulfillment and building resilience.
Over the course of this decade, customers will become omnipresent and to provide them with a seamless omnichannel shopping experience, retailers will progressively adopt digital technologies at scale. This omnichannel-led retail experience of the future requires clever synergy between online and offline shopping. It will be hyper personalized, use relevant customer data while being sensitive to privacy concerns and combining the right play of technology and human intervention.
Here is how technology is transforming retail for the foreseeable future:
Platforms are foundational Building foundational data and business platforms across the retail value chain is key to accelerating digital transformation. This helps organizations scale, adapt to new market opportunities and enable omnichannel experiences.
Such foundational platforms should reflect the organization’s core philosophies. For a multinational chain of department stores in South America, digitizing is about leveraging group synergies and building capability in digital retail, logistics or payments for the group. For an Indian eCommerce company, it's about seizing market opportunities and optimizing its platform for brand forward experiences.
Retailers are viewing transformation as a way of building platforms, domain and enterprise capabilities – across digital, logistics, payments and financial services. The intended transformation will power new channels and physical touchpoints to bring a connected shopping experience to customers.
Beyond commerce platforms, other key focus areas include building a strong, scalable data foundation for algorithmic retailing, unbundling the monolithic merchandizing function to create next-gen merchandizing platforms and establishing a ‘control tower’ that brings fundamental ‘sense and respond’ capabilities to an increasingly agile supply chain.
Transformation in retail also needs to go hand in hand with cultural change and organizational transformation where business, product and technology align to enable success and work as one team.
The era of partnerships is here Digital partnerships and ecosystems will shape the future of retail. Every partner in the retail ecosystem will have to add tangible value for the ecosystem to thrive, irrespective of the stage in the lifecycle or maturity of an organization. Huge opportunity has been created by digitization to unlock ecosystems’ value, therefore enabling disproportionate benefits.
Today retail ecosystems are experiencing collaborations not just within themselves but with other ecosystems. We are seeing SAS providers and startups work closely with retail enterprises to bring innovation and speed to market. They are learning from each other – characteristic of good partnerships. On the other hand, an Indian eCommerce company is leveraging partnerships for selective and deep proven experience like ‘service management,’ while also proactively building critical capabilities such as ‘search’ – core to differentiation.
Stores are here to stay; omnichannel will transcend new levels of maturity Although the pandemic and digital acceleration has put the spotlight on eCommerce, it is clear physical stores are here to stay and will only continue to evolve and serve newer missions. The key is to look at the store’s purpose in a different way - as shopping and fulfillment touchpoints. A seamless shopping experience of the future needs platforms suited to an organization’s unique context while leveraging collected data to provide deep and relevant personalization across all touchpoints.
In recent times, we have seen retailers with a strong offline presence go through a massive transformation to become online retailers while the likes of Alibaba and Amazon foray into digitally enabled offline experiences.
As the next decade ushers in such transformation, firms will adopt a shift in mindset, from viewing technology as a mere enabler to solving business challenges with a ‘Tech@Core’ approach. The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.