The retail industry is currently undergoing a rapid technology shift. With a highly competitive environment and the rise of digital alternatives, customers now have more options than ever before when choosing where to shop. Retailers must either adapt or risk being left behind by those that do.
Despite the hype surrounding online and mobile commerce, Deloitte has shown that physical stores still account for 90 percent of retail sales in the US. For large retailers dealing with a saturated retail market and increasing cost pressures, this means creating an exceptional in-store experience is critical for long term success and growth.
This can be accomplished by completing a technology refresh of both front-end and back-end IT infrastructure. New in-store technologies such as digital displays, mobile POS systems, mobile app integration and even in-store guest Wi-Fi all add value to customers and create a compelling reason to return to the same location again and again.
But transforming the technology of hundreds of store locations can be an expensive and complicated task. Here are the top 5 things IT executives need to consider before starting a store refresh.
1) Improve the customer experience
In today’s highly saturated and slow-growth retail environment, retailers need to find something that differentiates them and attracts customers to their stores. For many years, retailers have tried to compete on price. This has led to thin margins and an overall race to the bottom, and while it may have worked during the economic recession, many consumers are now willing and able to pay more for a great experience.
Competing solely on price simply isn’t sustainable long term, and it does not create any sense of loyalty for shoppers. Instead, creating an exceptional experience that is better, faster and more personalized to individual customers delivers value that cannot be found anywhere else.
2) Increase security and privacy
As new technology captures ever more sensitive customer information, retailers have a responsibility to make sure that information is protected. The number of attempted cyberattacks has increased, and these attacks have become more sophisticated to collect massive amounts of information before a breach has even been detected.
There are huge financial implications for retailers who fail to protect customer information. IBM has shown that for retailers, the average cost per stolen record is US$165, while the total cost of a breach is $3.79 million. But beyond that is the impact a breach has on consumer trust. Deloitte showed that 81 percent of customers are worried about brands that have experienced a breach, and recent high-profile data breaches have demonstrated that retailers can face a lot of negative publicity following an attack. With any new technology purchase, security needs to be top of mind, not just an afterthought.
3) Complete the project on time with the right expertise
Technology refreshes present a considerable challenge because they must be done on stores that are already open. Any interruption or delay can cost the retailer millions of dollars in lost sales and frustrate customers. Often, this means that refreshes are done in phases, and work must be completed overnight before the store opens the next morning.
For each store, software must be installed and tested, hardware needs to be removed or installed, and everything must be able to integrate with the existing infrastructure. Retailers need project management and IT expertise on site so that everything goes smoothly and is completed on time.
4) Manage procurement of new technology
A store refresh isn’t just done at one location, it’s done at hundreds or thousands of locations across a wide geographic area. The complexity of dealing with multiple vendors and various hardware and software suppliers can make this a daunting task for retailers and IT managers.
On top of this, new technology must be able to integrate into existing legacy systems that may vary from store to store. These new systems must be compatible while legacy systems need to either be maintained or turned down without compromising business continuity or security. Proper procurement, either done in house or through a third party, can deliver cost savings due to volume discounts, ensure consistency across locations and help manage the logistics of refreshing so many stores in such a short period of time.
5) Transform as part of a larger business objective
At the end of the day, each new piece of technology needs to fit into a larger business strategy and generate a return on investment. Simply purchasing all of the newest gadgets available is a sure-fire way to both increase cost and create a confusing, jumbled customer experience that turns customers away rather than bringing them back.
Because a store transformation requires a sizeable investment in time, money and effort and carries with it the risk of failure, every move must be intentional and shown to increase revenue at each store.
Refresh your technology for a better experience
Each of the 5 factors mentioned above must be considered before launching into a technology refresh. Security, timeliness and procurement are all important aspects that can make the difference between a successful refresh and a failed one. But with the right plan in place, retailers can capitalize on new technology trends and create an exceptional customer experience that grows revenue, adds value and creates loyal customers.
Feel free to leave your comments or ask questions about these top five tips for managing a successful store refresh.