Modern, tech-savvy customers are more demanding than ever before. Rather than being treated as a homogenous group, customers expect tailored products and experiences --- and those requirements create an issue for senior executives.
"Personalisation is expensive," says Mark Adams, founder partner at consultant Validify. "Many organisations have the potential to offer tailored experiences technologically but it requires a huge amount of financial and human resources."
So how can retail business leaders work to deliver great experiences in an age of heightened customer expectations? We hear best practice advice from CIOs at two very different types of retailers.
Integrate offline and online worlds to engage in unexpected ways
Dave Perry, IT director at video game retailer Game, says the internet has passed through three transitional states -- informational, transactional, and social -- and is now entering a fourth utilitarian stage, where any broadband outage becomes front-page news.
"That utility drives very different behaviour amongst consumers," he says. "Many people spend more time worrying about the type of company they are buying from, rather than the goods they are actually purchasing. For traditional retailers like Game, a high street presence legitimises our online presence."
Finding the right blend between on and offline worlds, however, is no easy task. Perry, who spoke at the recent Rethinking Retail Technology event organised by Rackspace in London, recognises that individual high street stores adopt distinct strategies. 'Click and collect', for example, means different things for each shop. Some companies ship in hours; others ship in days.
Such a disparity affects the rate of change, says Perry. In an ideal world, many retail organisations might choose to swap legacy systems, such as electronic point of sale (EPOS), for digital services as quickly as possible. However, the sheer scale of many businesses means transformation is tough.
"If your company has thousands of tills, then getting out to those stores to change EPOS technology is expensive. You then need to make sure your new service works. Unlike online, your ability to undo a mistake is time-consuming and costly," says Perry, who says IT suppliers must step up to the plate.
"The vendors need to think about the technology they produce, particularly in regards to the use of mobile devices. Every CIO who introduces mobile devices o to the shop floor has to make sure the ergonomics, the battery life, and other considerations are right. Get it wrong and customers will be horrified."
Perry says senior executives must take a joined-up approach. They should stop seeing the online and offline as two separate places with two distinct sets of workers. Skilled specialists should use their expertise to improve operations and efficiencies across all departments.
"Technology provides an opportunity to let businesses interact more closely with their customers, but this interaction needs to applied correctly," says Perry. "Don't be creepy, be empowering -- keep evolving and create the right service ethos to be a successful organisation."
Game has already made steps in this direction. Consumers can use the firm's app to scan a picture of a title, such as an advert at a bus stop, and then gain access to specialist content, such as in-game video footage.
"We're trying to extend the customer experience beyond the shop or even the website," says Perry. "My advice to other CIOs is to understand your customer and the products they want, and to inform them and engage with them in the ways they want."
Take online innovation to the shop floor and boost interaction
Oliver White, ecommerce director at Heal's, says the furniture specialist likes to offer customers a large amount of personalisation. Tailoring is crucial to the firm's business model. But meeting personalised requirements is no excuse for slow delivery in the digital age, even at a high-end retailer like Heal's.
"Customer expectation is being set by market leaders like Amazon, eBay, and Argos," he says. "Customers are used to getting what they want, when they want it. We need to deliver to expectation but it's expensive to adopt that strategy. We have a large network of suppliers who are scattered across the world."
Almost-instant delivery schedules might not be possible for a high-end company like Heal's. However, all CIOs must find ways to use technology to meet heightened customer expectations. To this end, White and his senior peers are determined to give clients new kinds of digitally enabled experiences.
Heal's recently completed a proof of concept trial for in-store tablet technology. Customers were able to use mobile devices to engage with furniture via near-field communication. Each access point provided additional information on products, such as dimensions and materials.
"It allowed customers to build a digital wish list, to discover product information and to check availability," he says. "What we've learnt through the trial is that customers want access to the detailed information they can get online, but they also want to come in store to touch and feel the products."
White reports that the average in-store customer engaged with 3.5 products while using the tablet. "We saw a pattern of how customers were shopping with intent," he says. "The trial allowed us to capture a profile of in-store customers and we could use that data to re-target people online."
Another proof of concept project, using smart glasses, is underway. Just as the tablet trial allowed White and his colleagues to bring the online experience to the shop floor, so the firm is keen to find ways to bring the benefits of in-store shopping to the web.
Customers looking at higher value products online are being given an opportunity to interact with in-store experts. Heal's sales staff wear smart glasses and demonstrate the benefits of a product to customers who are watching online. "It might present a really nice opportunity," says White, referring to the trial.
"These two experiments have shown us that technology must add value for customers, as well as the wider business. The temptation is for CIOs to use IT to do everything, without defining what they're actually doing and why. There are lots of potential directions -- you must find the right one and do it well."
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