By Anne McCauley
It’s too late; the retail shift has already happened. E-commerce is on the rise. In 2023, Expleo’s Business Transformation Index found that 71% of UK businesses were experiencing difficulty in retaining tech talent in the of face rising e-commerce demand, and that trend continues to gather pace. There’s no going back now, but there is a way forward.
Consumer behaviour is changing quickly. Retailers who don’t keep up will fail to meet consumer expectations of personalisation. Additionally, the rise of omnichannel commerce means brands risk losing in-store loyalty. Brands need to learn about the options they can count on to adapt to shifts in expectations.
The New Consumer Normal: What’s Changed?
Demand for online shopping has surged, even for categories that traditionally relied on a person-to-person contact. There is now a preference for hybrid experiences, powered by a number of critical features, such as:
- Click-and-collect: also called “buy online pick up in store” (BOPIS), or order pickup.
- In-app loyalty: rewarding customers for brand loyalty and continued purchases over time.
- AR try-ons: augmented reality-powered try-before-you-buy services in mobile apps for products like clothes, shoes, furniture, and other categories.
- AI agents: chatbots and intelligent tools that can help customers solve problems and personalize recommendations to shoppers.
Because of the instant gratification of online services, customers are expecting greater personalisation. This applies not only to product recommendations, but also to the products themselves and their packaging.
Common Pain Points Retailers are Facing
As customer expectations change, retailers are feeling the pressure to innovate or be left behind. These are a few of the most critical pain points that these brands are facing today.
Disconnected Sales Channels
Siloed, or separate, systems are common in the retail industry. There are fundamental barriers between the systems that power in-store POS systems and online shopping. As a result, businesses experience poor visibility, duplicate data entry problems, and the most harmful of all: inconsistent customer experiences.
Breaking down data silos is a critical step toward facing this problem. Omnichannel platforms that bridge these gaps improve consistency between in-store and online and provide opportunities for cross-platform commerce to take place. This builds customer loyalty and enables logistical efficiency.
Rigid Legacy Systems that Block Innovation
Not only do many brands have siloed systems, but those systems are also aging poorly. Outdated ERP and POS systems are difficult to adapt to newer technologies and can be costly to maintain over time. Although investing in new infrastructure can be expensive, when realized, the return on investment can make it worth it.
Without more flexible and adaptable systems like mobile applications, omnichannel web platforms, and AI tools, businesses can run into trouble. Legacy infrastructure will slow down a business’s ability to adapt to trends. It is also is a serious obstacle when trying to experiment or adapt to current trends.
Inability to Personalise
Even newer software can be vulnerable to this problem. Generic, off-the-shelf CRM tools and e-commerce systems can often have a critical weakness: a lack of personalisation for customers. If you can’t personalise your customer journeys and perform real-time targeting, you will fall behind.
Having robust CRM tools that allow you to automatically personalise product recommendations and deals to customers is essential. This will allow you to reap crucial opportunities in loyalty, engagement, and upselling.
Lack of Actionable Insights
Even retailers with aging infrastructure collect a wealth of data. However, it’s useless if it just sits around in spreadsheets untouched. In that data lies opportunity. Successful retailers use that data for targeting, personalisation, demand forecasting, and many other applications. Importantly, leaders benefit from seeing that data in real-time dashboards to inform their decisions.
Operational Bottlenecks
Manual workflows are slowing you down. Consider the tasks that are responsible for these bottlenecks: employee scheduling, stock reordering, and returns processing. Retail software can help automate these tasks with AI and robotic process automation. As a result, businesses will find that they have more time and money to focus on meeting customer needs.
Why Custom Retail Software is a Smart Investment
If off-the-shelf retail infrastructure results in rigid and disconnected sales channels, another solution is to start over. Custom retail software is a smart investment because of its flexibility and seamlessness. It also allows you to utilize software that best fits your unique business needs.
Seamlessness
Customers are demanding omnichannel experiences; custom-built systems address this need. By integrating data across all your platforms, you can ensure that inventory is always up to date and that loyalty programs are recognized everywhere. Additionally, you’ll ensure that customers can have a consistent experience across all your channels.
Scalability
It can be tricky to improve that one little part of your legacy system that needs to be updated. However, brands can build modern custom retail software modularly. This means that you can upgrade and improve pieces of it easily. With API support, businesses can also connect that software to third-party tools.
If brands build custom retail software with scalability in mind, they’ll be able to easily update that software as the business evolves.
Personalisation
If a custom retail software platform has access to the wealth of data a retail business generates, it can be a personalisation machine. Tailored recommendation engines and personalised offers become simple to implement.
Real-time segmentation across all touchpoints is the next step, allowing brands to further personalise experiences for unique groups of customers. Importantly, if a business builds and hosts custom retail software, they own the data. As a result, they have more control over how AI models can develop and evolve with the company. This means brands can become less reliant on third-party SaaS providers.
Analytics
With all that data at a business’s disposal, custom retail software makes it possible to build relevant dashboards and analytics tools. Rather than rely on someone else’s templates, businesses can build dashboards with visuals that are meaningful for them.
Smart forecasting of sales, staffing, and product demand can be critical for creating strategic plans. Similarly, instant alerts on supply chain disruptions or inventory shortages can immediately allow leadership to pivot as needed.
How to Start a Retail Tech Upgrade Without Being Overwhelmed
Beginning a digital transformation for a retail business is a daunting objective, but it’s achievable when you break it down step by step:
- Audit current workflows: you need to understand what you currently have before you can think about what to do next.
- Identify highest-impact bottlenecks: figure out what parts of the current system hurt the business the most. What can be improved?
- Choose the right tech company: finding the right retail software development company will help you drive changes and lay out all the options available to you.
Remember, focusing on modular and iterative approaches is key to futureproofing your business to support the needs of modern shoppers.
Be Where Your Customers Are (and Where They’re Going)
By the time you react to change, it’s already too late. Instead of reacting, look ahead. Design experiences need to head in the same direction as up-and-coming customer trends. Retail transformations don’t need to be massive. A few small and smart moves right now can make all the difference tomorrow.
