Retail: Re-open and re-invent

“When can we reopen?” has been the question on every retail leaders’ lips ever since the 24th March. Well, the Prime Minister has announced that non-essential retailers can plan to open their doors and welcome back customers on the 15th June. This is undoubtedly welcome news for everyone; the retailers, their staff, their suppliers and of course, their customers. Whilst this is what everyone connected to retail wanted to hear, the emphasis now is on what does reopening look like; what does COVID Secure mean and, what will our customers be expecting when they walk in for the first time in 8 weeks?

As a former Technology & Data Director, and having worked with several international omni-channel retail businesses during his career, our CEO Andy Tudor has been reflecting on current challenges and those that lie ahead. Andy has put together some thoughts on how he would lead a technology charge to firstly re-emerge from the COVID-19 pandemic and what he would do to enable and support future growth.

“We have to understand that for many retailers, today’s technology landscape is complex and can be massively overly complicated in parts, thus leading to a lack of flexibility. This is not great news as the two things retailers will want to do now and going forward, is change quickly and easily, to accommodate whatever emerges as the new normal. But, it is important to point out that this is not a new phenomenon, rather it is because over time we have over developed applications and systems to become all things, to all people. We have tried our best to accommodate every business requirement whilst still trying to contain costs and reduce operational risk. In many ways we have become victims of our own success by delivering only what’s needed when it’s needed. But now, as we sit two weeks from the grand reopening of retail, we are faced with a set of challenges very different from anything we have faced before – and excuse the ‘spoiler’, but this is not going to be fixed with a system change request!”

“In every new role I have taken, I have always spent my first few weeks reflecting on what systems, applications and technology capabilities are in place. I then look at the business strategy and match what we have with what we need in order to be successful. Rarely has an IT Director ever had the opportunity to step back from the melange of systems they have inherited and gone on to gain the commitment from the Board to “start again”. Even though there is always the acknowledgement that the operating model for the business is now unrecognisable compared to what it was, the rule is to start with what you have and go from there.”

“So to all retail CIO’s out there, I say you are where you are. I can’t see any wholesale system changes taking place anytime soon to provide a silver bullet, it’s time to understand what yourcompany’s vision is for the future, and to work out which of your assets is most likely to have the biggest impact as you look to plot your course of action.”

“For me, it is all about data, and how it can be used to optimise anything and everything a company does. From managing and controlling the number of customers in the stores, to supporting sales staff trying to improve conversion rates and increase average transaction values. Used well, data is the most valuable corporate asset a retailer owns.”

Re-evaluate the customer experience

What experience will customers be expecting when they return to our high streets and shopping centres? Whilst we can no doubt learn lessons from those essential brands that have continued to trade through the pandemic, there are equally a lot more lessons that will be learned. Will customers want to dwell and browse in a way that they once did? Will customers want to handle and try on products in a way that was once taken for granted?

In the early days of returning to our best loved brands there may be a sense of relief, a sense of “happy to be back”. However, brand loyalty will soon be tested if customer expectation is not met, particularly on the point of personal hygiene and safety. Our society has been encouraged to stay home and stay safe. There will naturally be some apprehension about re-emerging into social spaces, particularly smaller shops. Perhaps the events of the past two months have changed customer expectations for good about what they want from their brand engagement experience?

Capturing data across all elements of customer engagement as doors to the high street reopen will add immediate valuable insight. Actively understanding any changes to shopping habits across selling channels can have a very positive effect on brand loyalty, i.e. truly understanding what the customer is asking for from your brand and the experience you give to your customers. Those insights can be found in the data.

For example, we may see higher demand for click & collect services. A visit to a store may evolve from being a form of entertainment, to a purposeful journey where the customer wishes to quickly and safely collect their product; they have already done their browsing online, in the safety of their home. The data, in this case, may tell us that we need to make the click & collect experience more prevalent in the online journey, or that the staffing profile in stores needs to alter because customers are expecting to be able to click & collect in a particular time slot which is convenient for them.

Another example might be the need to measure the ongoing economic viability of a bricks and mortar location on a different basis. With the anticipated change in shopping habits, what value is the store location delivering to the brand? Is the site attracting new customers away from the competition because it is considered a safer environment to shop in? Perhaps the store layout lends itself to better social distancing or perhaps simply the staff show more empathy to customers as they rediscover the high street. Is the store ultimately helping to convert more e-commerce orders? Perhaps the store is physically fulfilling orders using store inventory or maybe new upsell opportunities from click & collect orders are really resonating with certain customers in certain stores. Is footfall data showing that different areas of the country are more positive about engaging with your brand and why might that be the case?The data held in technology that retailers use today can enable brands to listen and learn at scale from their customers, and those brands who really listen and adapt to what their customers are telling them will prosper as stores reopen.

Analyse the new normal to adapt and re-invent

The reality is that as lockdown reduces and our high streets and shopping centres reopen for business, technology leaders shall continue to face a similar set of challenges that they have had for years – namely the need to deliver more, faster and at a lower cost. However, one thing is fundamentally different – all leadership peers have experienced the lockdown at the same time; nobody can doubt or underplay the role that technology and data have had in keeping businesses going. Nobody in their right mind would now challenge the importance of data lead, technical agility across their organisations, as the right model to reopen retail with.

According to Forrester, 73% of data in organisations is never used and yet our digital society is now creating data at a faster rate than ever before – 90% of all global data has been created in the past 2.5 years. Why are we not using this resource to better effect?

Retailers must transform because everything about anything in retail will continue to change, and many things will be accelerated as the new normal takes hold. Retailers must listen to what their data is telling them in order to understand how to change. It is perhaps more important than ever that retailers reflect on, and specify, what measures really matter to their business.

Boards need not be fearful that this type of transformation involves large capital investments and will take forever. There are now ways to optimise the use of data that is locked away in legacy system investments without needing to replace them. There are ways to combine data from across the organisation to create a more powerful and insightful picture of your customer and your business operations to drive value and gain efficiencies.

Our view at Clekt is that using data to integrate a retailer’s past, present and future offers the best, and for many the only, opportunity to grow in the future.