Real-Time Retail Is the New Imperative
The key to influencing customers' purchasing decisions and offering personalized experiences is to identify them as soon as they enter the store, but so far this capability has been elusive for all but a tiny handful of retailers, according to research by Boston Retail Partners.
"Engaging customers up front and understanding them is essential today," says Ken Morris, a principal at Boston Retail Partners.
Unfortunately, though, "today, 99 percent of all retailers are using yesterday's information," Morris says. "They do not know who I am until after checkout," when it's too late to influence current purchasing decisions.
The current retail models will no longer suffice, especially given consumer expectations for seamless experiences across channels—in the store, on the Web, and via mobile devices, Morris maintains.
The research, presented in two separate retail reports, led Morris to conclude that real-time retail and unified commerce are "absolute imperatives."
Real-time, unified retail, as defined by Boston Retail Partners, is the ability to deliver a holistic experience to consumers whenever, wherever, and however they choose to shop by gathering, analyzing, and disseminating customer, product, pricing, and inventory data across all channels in real time. This, the firm adds, enables retailers to leverage customer context—which it defines as the interrelated factors of customer insights and environmental conditions—to make the shopping experience relevant.
The technology exists today, but retailers haven’t adopted it yet, Morris asserts.
Though currently far from mainstream adoption, retailers are slowly moving in that direction. In conducting its research, Boston Retail Partners found that nearly half of all retailers have already identified real-time retail as one of their top three priorities. Within two years, 100 percent of retailers plan to use analytics/dashboards to understand shopping behaviors. Three years from now, 76 percent plan to provide suggested selling based on customers’ previous purchases, and 91 percent plan to have real-time inventory available at the point of sale. Within five years, nearly two thirds will be able to identify customers when they walk in the store, 83 percent plan to offer promotions based on customers' geographic proximity to their stores, 87 percent plan to use gamification to engage customers, and 95 percent plan to have real-time analytics in place.
"Retailers are just now starting to wake up as they see what Apple and Amazon are doing," Morris says.
And while retailers could use Apple's iBeacon to connect with consumers via their smartphones in real time, Morris isn't sure that it's a good idea. "It may not be the most ethical thing to do," he says.
Morris says it would be better to have customers opt in on their own "because they like the store or the brand."
"The key to the success of this is getting customers to opt in," he adds. "And customers will opt in, especially if you give them something for opting in. This is where gamification comes in." Gamification is seeing "explosive growth as part of a CRM program to engage and motivate customers," the research states.
Beyond that, Morris suggests three other elements that need to be put into place to make the concept of real-time, unified commerce a reality.
The first is the right network. In banking, for instance, setting up ATMs networked together around the world reinvented the institution. The same can be done with retail, Morris says.
Second on the list of must-haves is an order management system, says Morris, who believes order management could ultimately replace traditional point-of-sale systems.
Third, there should be a strong middleware layer that enables technological features to be added gradually. "You're not going to throw your current systems away, so you want to be able to add to them over time," Morris says.
A successful CRM program, Boston Retail Partners concludes in its research, is built on a closed-loop system: identify customers; engage with customers in compelling ways (such as gamification to enhance the customer experience); analyze customer behaviors in real time; and retain customers with superior service and loyalty programs. —Leonard Klie