Retailers are no longer merely suppliers of goods, but instead face the challenge of having to make sales in a saturated market. The new buzz in recent years has been about creating a “shopping experience”, a concept that has slowly become ingrained in many people’s minds. Everywhere you turn, you find retailers attempting to generate experiences through digital and other means, ultimately faced with a financial Mount Everest. And all they have to hand is a simple rope and pickaxe. Those that make fast, rash moves and try to bulldoze their way ahead not only run out of puff quickly but also end up getting nowhere. When developing a digitalisation concept, retailers must consider the overall picture and establish a synergistic system capable of sustainably supporting the point of sale in the long term. The back store, front store and digital marketing areas are all interlinked in this. In order to put the concept of synergistic digitalisation into practice, retailers must place the customer front and centre and then build on the insights gained to determine the technologies that would provide an effective solution at the POS.
The right equipment is crucial for any successful ascent. This includes the switch to a digital back office. In spite of the technology available for reducing or completely avoiding paper, more than 80% of companies still cling to outdated filing systems. Three percent of company sales alone are lost on printing and filing processes. This does not include the cost of paper, storage, dispatch and retention. This clearly illustrates how employees waste time with unproductive interdepartmental paper processes that cost the company a lot of money. Switching to a digital back office boosts efficiency and frees up resources for new work structures.
The whole area of retail analytics is another major development that is emerging at international level in the retail sector. This year’s EuroShop demonstrated clearly how important it is for retailers to know when, where and how customers spend their time on the shop floor. Simple technology that complies with data protection requirements facilitates such data capture and subsequent comparison of the data generated with information from the merchandise management system. In this way, retailers can engage in customer-centric product placement and monitor the success of events and promotions. This not only offers customers an improved shopping experience but also minimises unnecessary expenditure.
Front-store technology should be designed with primarily the customer in mind and offer both a convenience and experience factor. A bitkom survey of 1,087 Internet users aged 16 and older found that 73 percent of Germans would favour more digital technology when shopping in brick-and-mortar stores. At the top of their list are free Wi-Fi (40 percent), loyalty and bonus schemes (37 percent), and real-time information on smartphones showing which products in a store are currently in stock (35 percent). Growing awareness of sustainability is also leading to an increased interest among consumers in manufacturing and production conditions (28 percent).
This information can best be stored using QR codes or even incorporated into augmented reality solutions. In this way, customers can visualise larger goods using their smartphones and order them directly to their homes. This saves on in-store space and also provides extra security to customers before they buy. At the same time, there are fewer returns due to bad buys.
Contactless payment systems are also increasingly popular for reasons of convenience. NFC-compatible POS terminals can read all kinds of data media (smartphones, smartwatches, debit and credit cards). The only requirement is for payment systems such as girocard, Mastercard and Visa to be accepted in the store. This provides the advantage of a fast, simple and hygienic payment process and reduces irksome waiting times at the checkout.
The third component of synergistic digitalisation covers digital marketing. This need not necessarily take place in the digital realm only, but can also happen offline through display advertising in public places. However, online implementation is more advisable given the desire to measure the effect of all activities. Website search engine optimisation (SEO) plays the most important role in this. Retailers of brick-and-mortar stores have long been urged to establish an online presence, but it must be easy for customers to also then find their website.
Even today, not all store owners have their own website and that’s fine. It is completely counterproductive for small retailers in particular to invest the time and money required for this and would not result in any long-term benefit or profit for them. However, there has been a simple solution for some years now: the Google My Business profile. Using a similar principle to Facebook, owners can create a free business listing and regularly enhance their online presence with brief updates about products and promotions.
The Shopify e-commerce software offers a handy solution for creating a small website. Using simple settings, retailers can set up an online shop within a few days while simultaneously offering products via social media channels. This integration with social media is unique and currently only available in this format from Shopify.
Retailers looking to go a step further can actually have their products displayed directly in search queries using Google Local Inventory. More than 70 percent of sales are researched online. This means that customers enter want they want to buy in the Google search box and then, as a rule, the online offerings of the major pure players appear in the search results. For a good two years now, Google has been using Local Inventory to also offer small retailers without an online shop a way of appearing as a local provider. When a potential customer enters what they want to buy, they are then shown that a retailer located just a few hundred metres away has this product available. However, retailers must invest a bit of time for this and keep their stock and pricing up to date.
All three aspects should be covered with individually selected technology in order to successfully implement the synergistic digitalisation method. Digitalisation measures only make sense when they all build on each other. Therefore, retailers should create a good basic back-office setup and work out a roadmap with customers in mind using front-store technology and digital marketing, thereby paving their way to the summit.
Lay the foundations
Reach and retain customers
Grow with the challenges
About the author
Stefanie Otto is a junior project manager specialising in retailing and retail technology with gmvteam GmbH, a Düsseldorf-based innovation agency for retailing and urban development. She is also an author on the Zukunft des Einkaufens blog