"Real-time customer relationship management is key to the future of retail," according to Ken Morris, principal of Boston Retail Partners.
In the next two years, 61 percent of retailers are planning real-time analytics initiatives; 41 percent are working on real-time retail at the point of sale, and 31 percent will be able to use customers' own smartphones to identify them when they walk into the store.
The retailers surveyed for the 2014 CRM/Unified Commerce Benchmark Survey included grocers, department stores, quick-service restaurants, convenience stores, home and garden stores, and clothing stores. Adding these technologies has already given leading-edge retailers a huge ROI, according to Morris.
The survey found that 56 percent of retailers plan to add mobile marketing in the next two years, and 28 percent are already using it.
The firms that have implemented it are starting to see the rewards. One pizza chain achieved a 20 percent response rate to its location-based mobile marketing campaigns. The company's app sends offers to customers based on the local weather, giving them coupons in bad weather or when power outages might leave them unable to cook.
"People don't get how valuable this is yet, but it's already happening in certain segments of retail," Morris says, noting that quick-serve restaurants "are usually slower on the uptake of technology than other segments, but they're way in the lead for this technology."
When it comes to real-time analytics, 23 percent of companies have already implemented it, making it one of the most widely adopted of the new technologies. With this technology in place, a tire chain is able to scan a customer's vehicle identification number, then locate, at any of its stores within 50 miles, the tires that match that customer's preferences for performance or safety. The customer gets new tires later that day, and the company saves money by marrying its CRM and supply chain systems.
Nonetheless, experiences like these remain rare in retail. "Most retailers are using yesterday's information, and that's like crossing a street in Manhattan with yesterday's traffic information. They don't have any idea of what is happening in real time," Morris observes.
"Smartphones, which make it easier to track customers in-store, are accelerating innovation in retail," he continues. "New LED light technology, such as that from ByteLight and GE Lighting, uses visible light as well as Bluetooth technology to identify customers as they move through the store with sub-meter accuracy. Customers could be served offers on their phones as [they shop], an alternative to the also-emerging iBeacon technology.
"You could see a customer looking at Roquefort cheese and get an offer for a wine that goes with it," Morris offers as an example.
Retailers have traditionally been slow to adopt newer technologies because of how their data is managed and stored, according to Morris. "If you have 500 stores, you have to secure it in 501 locations," or all of the locations plus corporate headquarters, he explains. Advances in cloud technology stand to change all that.
Organizations planning initiatives around real-time analytics, point-of-sale experience, or customer tracking have one thing in common. Two-thirds of retailers ranked improving the customer experience and engagement as their number-one goal. This means that technology that doesn't improve the customer experience simply won't be a priority for retailers in the years ahead.