Welcome to the new retail world order
Sponsored Content By Cognizant:
“Retail is about to undergo its biggest transformation in 20 years”.
The Retail Bulletin looks at what’s turning the industry on its head, in conversation with Andrew Warren, VP and Head of Retail, Consumer Goods, Travel & Hospitality at Cognizant UKI.
On the cusp of change
The world of retail is a lot more complicated than it used to be. We’ve all been told that the high street is dead and online retail is king. But, like everything in life, the reality is a lot more nuanced and a lot less black and white than this.
For the last twenty years, ecommerce has been central to the modern retail experience. Now, we’re rapidly reaching an inflection point, where the certainties we’ve relied on for a generation are about to change entirely.
This change will be led by the creation of new, innovative, and truly ubiquitous technologies that will transform retail in the same way the industrialisation of the internet did in the late 1990s. The brands who recognise this as an opportunity can acquire the ability to understand customers and meet their currently unserved, unrepresented, or unidentified needs.
But they will have to start planning today. So, let’s look at how retail is going to change, and the technologies that will support its transformation.
The high street is dead. Long live the high street.
Here’s a secret: the high street isn’t dead. But it can’t survive alone.
Even Google, one of the biggest online companies in the world, has physical locations, so to presume high-street retail will become a thing of the past is a mistake. In fact, since their initial decline during the boon of online retail, store visits have been on the rise. Around half[1] of millennial and Gen Z customers are currently visiting brick-and-mortar stores more often than they used to – a key indicator that what today’s customers want is changing.
So, the high street still exists – for now – but physical stores increasingly need to be augmented by digital technology and online experiences, and vice versa. That’s why tomorrow’s retail, which we can already see glimpses of today, will be a seamless mix of online interactions and physical experiences.
If supported by the right technology, this seamless blend of the traditional and the new will give retailers the opportunity to go to market in a variety of different ways. They’ll be able to reach customers wherever they choose to do their shopping, and make it easier for them to engage with services and acquire products.
But for this to succeed, retailers must first identify the needs of customers who are used to having the world at their fingertips. The question remains: what do you give the consumer who has everything?
Meet the modern customer
One of the biggest changes in retail over the last ten years has been the shift in customer power. Today’s customers are used to having everything they want, when they want it, through the channel of their choice – and in a competitive marketplace, retailers have no choice but to provide it.
Modern customers also have one big advantage over those of a decade or so ago. As digital natives, they know the value of their data. So, if they’re going to surrender it – and you need them to – they expect something in exchange.
The key to retail success is winning the loyalty of these demanding, and sometimes fickle, customers. As Andrew Warren, VP of Cognizant tells us, “This confluence of change is effectively creating a whole new landscape. I, as a consumer, have the power. You have to influence me, not sell to me.”
The first step to influencing consumers is delivering not just products, but the experiences they crave.
The rise of experiential retail
The right retail experiences create loyalty, stickiness, and receptiveness to buy. If you can create them you’ll have better customer relationships – but what the ‘right’ experiences are depends on your brand.
You may want your customers to hang around and soak in the atmosphere of your store, or you may want them to purchase and leave as quickly as possible. You may not even want them to leave their couch. What’s important is that you can control these experiences and make it as easy as possible for your customers to give you what you want.
Doing this requires the perfect execution of several key elements. You need the right technology and digital capabilities to access your customers and help them to find and fully embrace these experiences. But before all that comes the most important thing: knowing what your customers want.
This means not just having the right data on your customers, but also knowing exactly what you want from it.
For companies like Cognizant, embracing human sciences has played a huge role in this. As Andrew Warren points out: “Data scientists are very good at identifying the what and the how. What they’re not so good at is identifying the why.”
This ‘why’ is the hardest question in retail, and will be of huge importance to the industry’s future. It’s also why Cognizant deploys commercial anthropologists to drive better understanding.
“Working at the intersection of anthropology and design thinking, our multidisciplinary approach to research emphasises a rigorous understanding of the human experience,” Andrew continues.
In the new world of retail, semiotic algorithms will combine with huge amounts of data to provide a whole new level of insight into customer behaviours, making it easier for retailers to provide truly personalised interactions and adjust their experiences accordingly.
The right experiences require the right platforms
Whether it’s an ecommerce system or a physical store, a major consideration for tomorrow’s retailers will be ensuring they have the platforms available to deliver these experiences. And if they can’t create them, they must find another way to source them.
What does this mean for the future? Most likely these platforms will be available ‘as-a-Service’ and acquired the same way we acquire applications today.
In fact, it’s not just platforms that will be increasingly accessed this way. This is all part of the wider adoption of digital transformation and more flexible, cloud-based computing.
Embracing digital transformation
Digital transformation has the potential to create parity between retail’s major players and smaller brands.
As-a-Service access to fundamental enabling technologies will eliminate the capability gap between brands that can afford to spend millions of dollars on its own infrastructure and brands that accesses the same services through the cloud.
We’re not just talking about things like Software-as-a-Service either, but big-picture ideas like Business-Process-as-a-Service or Analytics-and-Outcomes-as-a-Service.
Unlocking this value means retailers can reallocate budgets into exploring customer needs and creating the experiences that meet them. And there are advantages for big businesses, too. They can construct IT infrastructures as they choose, access technologies more flexibly, and bring new levels of agility to their processes.
This levelling of the playing field means one thing: with the right partner, every retail brand will have the ability to provide the experiences that keep customers coming back.
The only question is, will they make the most of it?
Are you ready?
The new world of retail will combine human sciences, the latest technologies, and a seamless mix of online and physical environments to meet the unmet or currently unidentified needs of the modern customer.
But for this to happen, retailers have to acknowledge that their industry is about to change — and start planning today. This means making the required investments to truly understand customer needs, providing numerous ways to buy products and access services, and making the right technology investments to ensure the future is theirs.
Footnotes: [1] Consumer View Report, National Retail Federation, 2017
