We’re talking about the future potential of Artificial Intelligence (AI), augmented reality, and automated drone delivery. We’re talking about beacons and smart mirrors and geolocation services.
But really, the retail technology conversation needs to be happening at a more practical and immediate level.
In South Africa, the bulk of purchasing power is in the hands of lower- Living Standard Measures (LSM)consumers, where the need is often more about efficiency, lower costs, and simplicity in the customer experience. For the majority of retailers it’s important to remember this, as you ask the tough questions:
Do we really need to embark on this ambitious omni-channel strategy? Do we really need to invest millions in building state-of-the-art digital interfaces? Do we need to pull in the latest technologies??
Don’t forget: eCommerce still accounts for just 1% of retail trade in South Africa, according to World Wide Worx.
A better starting point, for retailers looking to digitise, is to better understand the footfall within their stores. Where are the biggest roadblocks ? Where can new innovations be applied to improve the store experience?
One of the biggest areas for opportunity is point-of-sale, which lies at the heart of the retail experience. Video analytics and queue management technology could help to alleviate queues; and roving staff armed with POS devices and tablets could enable check-outs at other points on the floor.
But it’s not just about simplifying the checkout experience. Shopper information from Loyalty programmes can be better leveraged, to push tailored offers to the customer at the point of check-out. It is here, while they are in the store, that they’re more likely to respond (as opposed to being emailed coupons or special offers when they’re at home, for instance).
Logistics and supply chain
Sensor technologies like Radio frequency identification (RFID) tags have been a feature of warehousing and logistics operations for decades; but in many retailers, there is still a lack of real-time information being pushed to frontline staff. By joining-up the back office and front office functions more effectively, staff would be empowered to know whether certain items are in-stock, in another outlet, or perhaps being delivered to the store.
While we tend to place a lot of emphasis on the ‘external’ (apps, websites, store locations, window displays), the biggest opportunities for retailers lie within the ‘internals’ (supply chain digitisation, operational efficiencies, information exchange, etc).
In fact, a recent industry report by TechTarget suggested that, compared with the amount they have traditionally spent to transform customer experiences, enterprises like The Home Depot and Unilever will spend four times more on digitizing their operations*.
“Culture eats strategy for breakfast”
Overall, the retail sector accounts for millions of staff members. Against this backdrop, it becomes crucial to not simply deploy new digital tools and technologies into stores, but to develop awareness and usage among staff members – enlisting an army of internal ambassadors to promote new innovations to external customers.
Retailers often run the risk of overlooking the needs of frontline staff, racing to implement the latest technology before asking staff on the ground about the challenges they’re facing, and devising solutions to alleviate these pain points. As with any enterprise technology deployment, retailers should consider deeply-immersive change management programmes for their staff, inviting them to co-create solutions, and share regular feedback.
Even the most well-crafted digitisation strategies will fall flat unless supported by true organisation-wide buy in. As management guru Peter Drucker famously noted: “Culture eats strategy for breakfast”.
For more specialised and high-end retail players, there is certainly scope to pursue the kinds of ambitious multi-channel, multi-technology strategies that are currently being talked about at a global level.
But for the majority of South African retailers, the smarter play is to firstly understand their customers’ and employees’ experiences and roadblocks– and tailor their innovation strategy to serve these real-world needs.
Perhaps a simpler Unstructured Supplementary Service Data (USSD)information service, or enhanced inventory software, might solve greater problems.
By Andre Muzerie, Oracle Business Practice Head, Africa, Wipro Limited