by Derek Jones, VP Enterprise Solutions AMERICAS at Deputy
Technology is seeping into every aspect of the brick-and-mortar experience, from customer communications to workforce management, payments, in-store product personalization, and more. In fact, a solid digital transformation strategy is now standard to survive in today’s infamous and often overblown retail ‘apocalypse.’
Take Macy’s, for example. Macy’s has historically lagged in introducing new tech in its stores, and in early February, announced it will close 125 stores. This is a direct result of the company’s inability to keep up with digital transformation, as it’s renewed focus is accelerating digital growth and upgrading technologies in up to 100 stores.
Small-to-medium sized retailers should take note, as the same trends affecting big-box retailers will affect the entire retail ecosystem. Here are a few to note:
The Tremendous Rise of Experiential Retail
The same week Macy’s announced its 125 store closures, Sephora said it will open 100 stores that will feature new beauty studios and have a greater emphasis on events and classes than its existing storefronts. Sephora has already implemented digital try-ons with AI and AR technology, and in 2015, introduced its Innovation Lab that exists to predict and create Sephora’s brick-and-mortar future.
The store’s digital transformation efforts mark a discernible shift away from the traditional brick-and-mortar experience — and it’s not alone. Customers not only want to see and feel the goods they visit a store to buy, they want full immersion into the lifestyle that brands bring to life. Companies including Lululemon, Allbirds, Peloton, and more have been applauded in recent years for reinforcing their brands by redesigning the in-store experience.
The key takeaway from retail SMB leaders: It’s no longer enough to simply throw your product on a few shelves in-store. Customers are looking for a holistic, aesthetically pleasing, and digital experience from the brands they do business with.
A Renewed Focus on the Employee Experience
Digital transformation has as vast benefits for the employee as it does for the consumer. In a traditional brick-and-mortar setting, SMB leaders may write out shift schedules in Excel spreadsheets, balance out payroll and calculate revenue by hand, and regularly count inventory to ensure they aren’t running low on product. Digital transformation helps to automate these processes, but historically, the technologies that support automatic processes have been fairly pricey for small businesses.
Luckily, a lot of technology that was previously only available to big enterprises are now available to SMBs. For example, SMBs can take advantage of affordable machine learning to project demand, or use software that automatically creates employee schedules in line with federal labor regulations, such as Fair Workweek.
Technology to Keep Pace With Shifting Consumer Needs
Consumers want products in-hand the moment they order them. That’s why big brands such as Amazon are doing incredibly well in the digital age — the introduction of same-day and drone delivery (sometimes one and the same) has made last-mile delivery ten-fold faster. This has led to what retailers call the Amazon Effect, which supports customers’ needs for instant gratification.
This has created challenges for SMBs who don’t have the same resources as an ecommerce giant such as Amazon. Though it sounds counterintuitive, SMB leaders can leverage human touch points alongside automated, digital communications to ensure they’re keeping pace with consumers.
Actually, small businesses have a unique opportunity to connect with their customers on a different level than big enterprises that win business with fast delivery. Investing in a good email marketing tool that allows customizable messages, for example, can greatly help to humanize a brand. It all starts with understanding your customer and connecting on a more personal level to ensure that they feel like an important part of your business.
The Retail Store of the Future is Digital
The retail store of the future is heavily geared toward advances in technology. While digital transformation has propelled experiential stores to the front of the brick-and-mortar experience, customers continue to have ever-changing needs that only a blended human-digital approach can satiate. It’s important to implement digital tools to improve the employee experience, as well.
The retail store of the future is digital — are you prepared?
Derek Jones spearheads key initiatives at Deputy, a global workforce management platform for employee scheduling, timesheets and communication. With a focus on Emerging Retail, Derek helps business owners and workforce leaders simplify employment law compliance, keep labor cost in line and build award-winning workplaces. Derek has over 16 years’ experience in delivering data-driven sales and marketing strategies to SaaS companies like MarketSource and Griswold Home Care.