Blog

3rd June, 2016

Managing digital disruption and innovation in retail

At our recent Ex Files event, Forrester analyst Michelle Beeson provided some stats and insight from the group’s most recent omnichannel research, which revealed that in the age of the hyper-connected and empowered consumer, competitive advantage was dependent on a deep knowledge and understanding of your customer.

Forrester forecasts that by 2020, 53% of total retail sales will be online or digitally influenced.

But that means you have to be able to gather information across a myriad of touchpoints. And those touchpoints are continuing to grow. The research showed that European “supershoppers”, those that regularly use many different digital touchpoints to purchase online, had increased from 16% in 2013 to 32% last year.

And Forrester forecasts that by 2020, 53% of total retail sales will be online or digitally influenced.

The omnichannel benchmark

All of this explains why omnichannel is one of the top priorities among executives. In the Omnichannel Functionality Benchmark (a kind of mystery shopper test) Forrester assessed the omnichannel capabilities of 20 leading retailers in the US and UK.

Interestingly, US retailers tended to score higher than their UK counterparts, a turnaround from previous years, which may reflect current market competitiveness and recent technology investment priorities.

Maybe most importantly, the report showed that the best performing retailers know that omnichannel fulfilment doesn’t end with just making sure the item is available in store. So they’re implementing new processes, systems and metrics to help store colleagues provide a faster and more efficient service.

Stock visibility strategies

The UK scores in the report showed that there were still unexpected holes in the omnichannel customer journey, such as mobile app baskets that were not linked with other digital channels. Connecting all of these channels and creating a seamless experience is obviously the aim – but the lynchpin of omnichannel is enterprise inventory visibility.

Michelle took us through a whistle stop tour of some of the retailers in the report, showing how different brands were dealing with the challenge of omnichannel and enterprise wide stock visibility.

So we saw how Top Shop’s stock exposure had been taken further by Halfords, so that customers could check AND buy from store stock, improving the overall customer experience and extending inventory available for sale. We also looked how House of Fraser had dedicated systems and tablets in-store to manage click and collect to reduce customer waiting time and improve in-store efficiency.

Challenges, opportunities and next steps

It’s clear that as well as challenges, digital offers massive opportunities for retailers. But what do you need to be doing now?

Michelle argued that you need to plug any gaps in the supporting tech. You also need to be analysing and optimising constantly – going beyond traditional analytics.

But maybe the biggest challenge is breaking down historical divisions between digital and stores and creating cross-functional teams that can consider the impact on people, processes and technology right across the business.

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