In the race to digitalization and driven by consumer demand, many retailers find themselves struggling to keep pace with the latest digital retail solutions. However, staying “on trend” with retail technology isn’t the sum and substance to customer loyalty and longevity.
There’s no denying that the retail game has changed – dramatically. Pre-pandemic, the need for omnichannel experiences and integrated tech was growing. Consumers were already headed towards more technology-centric buying patterns.
However, the pandemic fast-forwarded the digitization of shoppers’ interactions and expectations by an astonishing five years. The e-commerce industry experienced ten years’ worth of growth in just the first three months of the pandemic, and retail-oriented online spending increased by 35%.
Global retailers’ scramble to accelerate their digitalization and retail technology development at the same breakneck rate is understandable. However, their frenzied approach often isn’t effective, and it’s leading to underwhelming outcomes.
Just because it’s shiny doesn’t mean it’s the right fit
It seems like every day, there’s a new must-have feature available to win over shoppers and keep customers from jumping ship. This isn’t just an illusion; the retail technology market is booming. In fact, it’s expected to outpace its already substantial CAGR growth of 18-20% in 2021.
Pair that with the fact that 75% of shoppers changed brands and shopping behaviors during the pandemic – a signal that loyalty isn’t as easy to earn or keep as it once was – and it becomes crystal clear why so many companies get distracted by shiny, new technology features promising to drive more sales.
The competition for customer spends is fierce. However, vying for consumers’ attention by infusing the latest tech into a digital retail strategy is an ill-advised approach. One of the main reasons why it’s important to approach new tech with caution is because it comes with many more unknowns that have not been accounted for, and which will inevitably emerge and need to be dealt with at some point in the future. This is why Dan McKinley, Senior Director of Data Science & Analytics at Mozilla, advises companies to choose “boring” technology (in other words, predictable technology).
We often see global retailers jumping to add the newest technologies because it’s what the industry experts say they should do. They try to make these bells and whistles fit into whatever retail technology they’re currently developing.
In the end, however, many retailers pour millions of dollars into the technology of the minute, only to have it flop on launch. Or worse, they divert resources away from their current digital projects, and all of a sudden, the timelines are pushed back with no quantifiable results. Oftentimes, new technology ends up having many unexpected issues (unknowns) that crop up and render the new shiny solution not as amazing and game-changing as it was purported to be. The last thing a global corporation wants is to throw its tech budget down the drain with a new, relatively untested tech product.
The explosive e-commerce growth and increasing competition make it feel like the secret to success is to stay in line with the latest trends. However, in our experience helping global retailers create digital solutions that net billions of dollars, this approach is entirely wrong.
Look away from the shiny object and into your existing goldmine
WSJ, TechCrunch, and Forbes may agree that “every company is a tech company,” but we think there are substantial differences in the way every company may achieve that goal. Based on our experience, the most successful global retailers out there identify their customers’ unique needs and solve for them with the right retail technology and technology organization capable of delivering those solutions.
80% of customers agree that the experience a company provides is just as important as the services and products. It’s why the best approach to navigating the tumultuous waves of this rapid digital retail technology evolution is to take a customer-centric approach instead of a technology-centric one.
What does this look like in practice? Companies should prioritize the core functionality required by their offerings coupled with the needs of their customers and align digital solutions around them. Rather than build technology and assume it will attract customers, companies should look into their existing data and customer behavior and find the gaps in their customer experience. Then, use that knowledge to guide technology development and refinement.
For some companies, solving for customer demand might look like revamping a customer loyalty program to offer a seamless, streamlined rewards process. For others, it might involve creating a mediated experience that enables product specialists like personal stylists to engage virtually with customers and meld personal connection with digital experience. The key here is being intentional about leveraging internal knowledge and customer feedback to develop a retail technology plan that will deliver added value to existing and future customers without having to completely toss out your current infrastructure.
It’s also extremely important for retailers to continually evolve their technology to avoid becoming dependent on a finite number of practitioners with specialized technical proficiency in outdated and increasingly obsolete systems. Evolution becomes a critical business necessity to ensure that IT leaders never struggle with staffing tech roles that support mission-critical applications.
Customizing digital retail for your unique customer base
Being intentional about your technology requires having a trusted partner with the experience to guide those efforts. At S4N, our engineering teams are adaptable and collaborative and take a research-first, consultative approach to digital product design and development. We leverage your internal team’s knowledge and work closely with your product specialists to listen to your customer base and devise digital solutions that align with business objectives while always putting the customer at the center. When appropriate and advisable, we have the capacity and technical skillset to seamlessly balance established technology with new technology to meet your unique needs.
Are you interested in learning more? Let’s have a conversation about your digital technology needs.