With the development of technology, many high-tech solutions are now available to retail companies as well. From simpler solutions to systems supported by artificial intelligence, there are many ways to make retail more efficient. What does digitization mean in everyday life? What opportunities does all this mean for commercial networks?
Digitalisation is an information transformation process in which we organize and store data in a computer-readable form.
That is, through the glasses of business processes, we are moving existing processes from the offline world’s paper- or word-of-mouth operations to software-supported processes. In addition, data collection on the progress of processes is a basic feature of digitization and not an extra administrative burden.
The digital transformation aims to unleash the potential of people and speed up new, more efficient ways of working. Thanks to digital technology, not only existing industries have transformed, but new ones have emerged. We can clearly see that the technology has brought radical changes to the industries involved. What does this mean in case of the retail segment? What digital technologies help retail businesses operate on a daily basis?
Digitization in sales
Digital solutions are extremely useful not only because they can save costs, but also because, when used properly, they can improve the employee and customer experience as well.
We can select solutions from various augmented reality technologies, through data-driven processes provided by big data technologies, from fragrance marketing to the conscious and well-designed use of various lighting technologies, but we can also mention the well-known and popular IoT devices, SMS -based ticketing systems and various CMS solutions too.
Let's see a few examples from the practice of recent years:
The result of digitalization is Amazon’s checkout-free system that uses ceiling-mounted cameras and shelf-mounted weight sensors to map where Amazon customers entering the store went, what they took off the shelves, and what they put in their carts. In an Amazon Go store like this, all the customer must do is pick up the right products and then walk out of the store. The invoice will of course be sent by email. The technology has been successfully applied since December 2016, there are now 26 such stores in the USA, including the first traditional grocery store, which opened in this year’s February. Technology, as it used to be, is for sale. According to Reuters, it can be installed in just a few weeks and the first buyers are expected to be airport shops. The current epidemic situation may accelerate the spread of similar solutions.
Another interesting example is the Lowes hardware chain’s robot called LoweBot,which not only helps answering customer questions in as many languages as possible, but also accompanies the customers to the department containing the product they are looking for. On top of all that, once you’re there, it provides you with all the information you may need about the product you’re interested in, and then, after helping out the customers it doesn’t stand idly but scans the shelves to check their fill levels, helping its human colleagues make loading more efficient. The LoweBot digital assistant is available to customers since 2016 in the United States.
An interesting initiative is the introduction of AR technology to retail. Using Lacoste’s AR application for example, 30,000 users were able to try on the brand’s shoes only by using the camera of the smart phone. Sephora also shows us through the phone's camera, how beautiful we would look putting on the selected make-up product. And for all that, we don’t even have to get our feet out of home. What enriches the in- store experience, however, is the virtual changing room. For example, if we get lost in Topshop’s Moscow store or Timberland’s Warsaw store, we don’t even have to get rid of our clothes to try on another one. The 80-inch wide screen using Kinect technology displays the customer from head to toe real-time. The customers can direct the system with simple gestures.
Based on all these, we can see that technology makes a way for itself in retail too.
Is digitalization too complicated?
Among the examples presented above, there are many that sound good but involve a significant investment that not all commercial networks can afford. It is also possible that a retailer is not brave enough to be among the first ones, so we may think that digital transformation is too complicated and expensive.
Fortunately, there is a strong supply in the field of software solutions designed to make users’ everyday professional lives easier. There are general solutions like ERP systems and of course softwares focusing on specific, well-defined sub-areas too (Webshops, POS systems, Order Management softwares, CRM systems etc). These solutions democratize the market, since they are available not only the by the big guys, but also by the smaller participants of the market's retail segment.
It is also true that digitalization needs to be addressed, new operations need to be invented or existing ones need to be further tuned, IT tools need to be acquired, colleagues need to be educated and all this at once, in a campaign-like way, so it is not easy, but also not unreachable and impossible.
There is no need to install the most expensive, automated technologies right away, retailers can also go through a more tangible way to see more progress. This last one, however, seems necessary.
Does digitalization mean reducing the importance of human resources?
The question may arise as to whether digitalisation can ever replace human resources. To answer this, retailers need to know what their customers’ needs are. Is it good for the customers if they do not see live people while shopping? Trends do not support this idea. PWC conducted a research in 2019 covering 12 countries with 15,000 participants. The research concludes that the product-oriented processes will gradually be replaced by customer-focused processes and instead of the usual ROI ( Return of Investment) indicators it would be more appropriate to focus on ROX ( Return of Experience ) indicators. They also pointed out that the improvement of Customer Journey (or customer experience) is based on and linked heavily to Employee Journey (or employee experience).
Satisfied employee = satisfied customer
Good service quality means greater willingness to pay more. Customers are willing to pay 16% more if they leave the stores with a good experience. Then there is the opposite. What happens if the experience was bad? Even a single bad experience can permanently turn a customer away from a particular store or even an entire brand. The research found that after one bad experience, one in three shoppers would no longer shop at that store.
The good news is that researches confirm that speed, helpful staff, and friendly service in turn makes the customer satisfied and that is every trader's dream eventually, because customer satisfaction greatly affects revenue.
If technology supports these, the customer experience can be maximized. For 82% of customers, human interaction during shopping is paramount.This is where employee experience comes into play. It is because customers don’t like if the service is not friendly or if the employee does not have adequate knowledge and understanding of the store's product range (see Figure 1).
After all this, we can agree on the importance of human resources, the importance of their long-term retention, motivation, behavior, and feelings. But how can this be developed?
Digitalization certainly gives us one thing: information. You just have to understand the data and use the results.
We track the activities of millions of our customers with millions of data. But what about our employees? In their case too, we can find out exactly how they spend each and every workday. Data collection and measurement is just as important and feasible for employee performance as it is for customer activities. Give employees empowerment, let the system in which they work be transparent, clear. It is important to give purpose and mission, to help employees learn and develop, and to provide them with flexibility and mobility.
Introduce solutions that are companions, softwares that can provide useful information and can help achieving our goals. Use them to show all employee performance data in real time. Be it a sales quota, a commission, a competition’s result or a career system, if our employees see exactly, anywhere, anytime, even on their mobile device, how they perform, how much their monthly commission is, how they perform in the current sales competition or where they are in the corporate career system and what they need to move up on the career ladder, they will be much more motivated, which will improve their work ethic in short term, will help with long-term commitment, and it is a straight path to a higher level of service.
The advantage of such solutions is also evident on the higher level of the organization too, as it will help to keep the pace, to take immediate focus switching, to understand sales trends and employee behaviour and to control the up-to-dateness of workers' knowledge which can help to define the necessary trainings.
We, at Assister are constantly working to help the day-to-day operation of retail networks in several ways. We offer modern software solutions from small businesses to the largest. Our software family offers easy-to-use POS system with receipt and invoice printing, discount and customer management, logistics support, and reporting solutions to meet retail industry's needs. In addition, we also offer motivational solutions such as quota and commission management, sales competitions, career system and knowledge testing quiz functions. All this adapted to the expectations of our time with user-friendly interfaces and mobile platforms.