Innovations in retail technology flood the headlines, with each one promising to change the consumer experience. How can retailers separate worthy investments from noise and hype? Here are five tips to stay relevant while making smart investments.
1. Know Your Customer’s Tastes for Tech
Different customer segments will have different reactions to technological changes. Retailers need to know their demographics, and make adjustments for each. Baby Boomers are accustomed to a different shopping experience than Millennials may be. For example, Sephora found that tech savvy shoppers loved their rollout of an iPad app that found the right shade and foundation for customers by scanning their face. The app also lets someone call up a variety of recommendations from thousands of products.
2. Don’t Buy into Hype Every Time
Taking time to make sure a new tech solution aligns with your consumer experience and growth strategies can prevent the frustration of sinking costs into something no one asked for. Walmart has a history of success with goal-oriented innovations. The retail giant’s acquisition of Parcel, for example, has let it ramp up its same-day delivery experience in NYC.
3. Make Sure investments line up with measurable business outcomes
Aside from addressing customer pain points, investing in technologies that align with key business metrics like customer satisfaction, loyalty, increased conversion rates will help you find valuable investments rather than mere novelties.
4. Operational improvements are key
Operational impacts are the key component of any new tech solution. This should always be part of the discussion when building a case for a new investment. For example, retailers are increasingly using Robotic Process Automation (RPA) to make their back offices more productive. This makes pricing and inventory align with customer demand better.
5. Put a Customer-focused Tech Foundation in Place
Retailers should consider the value of a scalable and flexible tech foundation. The point is not to stay focused on one new customer need, such as in-store price comparison, for example, but to build something that acknowledges that consumer expectations will begin to evolve at a pace similar to that of technology. Micro-services, blockchain and open source frameworks have all been used to create such a framework.