The most urgent challenge of 2012 in the retail space was consumers’ rapidly growing mobility and digital empowerment. Retailers responded by devising new ways to attract, engage and retain these droves of customers and meet their fleet-footed demand for products and services—on the customers’ devices and terms.
In short, customers have embraced online shopping with a multiplicity of devices, and retailers are rolling with it. Of course, they have no choice: if they want to sell products and services to shoppers who are constantly on the go and gathering no moss, they have to be able to reach them at any time, in any place, on any device. The National Retail Federation, a retail industry trade group that monitors the global retail industry, predicts that online retail sales will grow 9-11 percent in 2013 versus overall retail sales growth, which is expected to remain modest at roughly 3.4 percent.
The Outsourcing Center sat down with Sunil Oberoi, who is the Global Head of Digital Commerce and Omnichannel Services for HCL Technologies, Inc., India’s leading information technology company. We dug a little deeper to get a sense of some of the issues facing the retail industry currently.
According to Oberoi, “retailers are currently challenged to drive growth. There are three major areas that can help drive growth, he advises. “Retailers should continue to focus on increasing online sales as % of overall sales—as customers become hyper-digital and drive omni-channel behavior—with an eye toward making the customer’s shopping and brand experience seamless across all channels.” Oberoi adds that major brands are currently looking to expand internationally, primarily via online channels and direct-to-consumer marketing.
Mobile Consumers Drive Innovation and Transformation
Oberoi adds, “Retailers are constantly adapting and evolving to meet the challenges posed by a highly empowered digital consumer. We see this as a journey of experimentation, innovation and transformation for retailers that will continue in 2013 and beyond.” Noting that retailers are experimenting with business use cases—or the various possible interactions between systems and users in a given environment— unique to their businesses, Oberoi explains that “Walgreens launched its pharmacy mobile app that allows its customers to reorder prescription drugs without leaving home by scanning barcodes with their smart phones.” Noting that Walgreens’ new mobile app became very successful in a short timeframe with customers, Oberoi mentions that other companies have also developed innovative approaches for meeting the needs of highly mobile customers. “For example, Starbucks is now letting customers conveniently pay for purchases in its stores with their mobile phones via its Square Wallet app,” he adds.
Oberoi also points to innovative retailers, such as Macy’s and Lowe’s, who are pushing to transform channel silo businesses in order to provide a much more seamless omni-channel customer experience. “What we’re seeing with these retailers is a push to transform business processes and their underlying technology infrastructure in ways that will support scalability and agility in the future,” he says.
HCL Technologies, Inc., expects retailers to seek global service providers that provide broad-based capabilities across leading commerce, digital marketing and integration platforms. “Capabilities like these will help retailers implement and maintain a scalable, agile infrastructure that supports the future growth of digital and omni-channel businesses to ultimately completely transform the shopper’s experience.”
Such future platforms and solutions will assist retailers in serving customers by including capabilities such as multi-country or multi-brand sites across both Web and mobile landscapes to provide a uniquely personalized user experience. “The new technologies will also give retailers a single view of inventory and orders across multiple channels and enable business, user-driven content management, integrated product information management, integrated loyalty management and digital marketing capabilities,” says Oberoi.
Customers on the Move Demand a Multi-Channel Experience
Additionally, mobile and tablet traffic will continue to gain momentum as the major driver for online sales. Oberoi predicts that we can expect to see next-generation e-commerce applications that will be designed for “mobile first,” rather than simply adapted for mobile devices. He notes that Forrester Research fully expects that mobile commerce will account for more than 10 percent of overall e-commerce by 2017. “Thus, website redesign that is responsive to various mobile devices and tablets will be necessary to maintain a superior user experience,” he adds.
Breaking channel silos and promoting an omni-channel customer experience will drive significant gains in the future. New titles and roles, like Chief Customer Officer and Head of Multi-channel Customer Experience, begin to emerge, that will focus sharply on the omni-channel customer experience, loyalty and customer engagement that will drive the next frontiers of growth for retailers. “I think we’ll see this as a major CEO agenda item that drives change across the entire enterprise, encompassing business units, marketing, technology and supply chain,” says Oberoi. “Retailers would be well advised to look at digital impact in a more strategic and holistic fashion that will create significant impact on their business across the value chain in the future,” he comments, adding that “tactical, piecemeal approaches will only provide suboptimal results.”
Technology trends to watch in the retail industry include the wider use of NFC tags, wider adoption of mobile payment capabilities, and integrated commerce platforms that will help enhance the digital customer’s experience.
While consumer confidence is expected to rise this year, the overall business environment will probably remain soft and conservative. “This is reflective of the ‘new normal,'” notes Oberoi, “in which we all live in a global market that has a high level of uncertainty.” Acknowledging that retailers will likely continue to be cautiously optimistic in 2013, Oberoi believes that, while many will continue to experiment with business use cases, some will look to fundamentally transform their businesses. “We expect that there will be some mavericks out there who will seize the opportunity to break away.”
What are some of the more creative ways your organization has developed to reach highly mobile customers?