Skip to main content

The impact the modern customer is having on IT investment

As customers, we are now more demanding than ever. We expect ease, speed and convenience when we shop and at every stage of the retail journey. We’re also device- agnostic: we might access information on a product via mobile phone or tablet, purchase using a laptop, and choose to collect the merchandise in person.

This unpredictability means that to understand their customers, retailers need to have a single view of all interactions. Acting upon this data is what creates the kind of seamless customer experience that drives confidence and builds loyalty.

However in order to achieve a graceful and fluid flow from browsing to basket, retailers need to invest in the technology that can generate an all-encompassing snapshot.

According to recent research from BT in partnership with Ovum, ‘Technology is profoundly changing the way we shop’, over the next year, some 85 per cent of the 200 retailers across the UK, the EU and the US, who we surveyed, are planning to invest in the IT solutions that can do this. The importance placed on having a 360-degree integrated customer overview is due to the increasing use of social media in the shopping journey combined with the fact that customers now use multiple touchpoints (PC, tablet, mobile, in-store) to interact with brands. Having one up-to-the minute overview of every customer’s shopping profile and history is also vital because shoppers, and especially millennials, now expect much more in terms of service and personalisation.

This demographic tends to be restless and impatient. They demand fast and excellent customer service at all times and will take innovation into their own hands when they see a gap between expectation and reality. But in addition to personalisation, they also increasingly expecting a more entertaining and immersive, multi-sensory in-store ‘retail-tainment’ experience. This improves the bricks and mortar shopping experience and can draw customers further into the brand.

This is key, especially given that retailers and brands are also no longer solely distinguished by the products or services they sell. Rather, they’re judged increasingly on the experiences they create as a part of the product discovery, trial, and purchase process. Whether these happen on or offline, they are becoming more and more important.

With the rise of connectivity and rapid take-up of digital mobile devices used by sales associates, the physical store environment has also become another data gathering hub that needs to be integrated into the digital world.

These combined technological, demographic and cultural forces mean brands won’t survive unless they have an accurate picture of each customer’s buying habits, queries, complaints and preferences — at all times. However, this isn’t just about survival. The retailers that harness these forces successfully will have happier, more loyal customers, who feel valued, listened to and prioritised.

However the sheer complexity of managing growing volumes of interactions across an increasingly diverse number of channels and devices makes providing a seamless experience a big challenge for most retailers. And nowhere is this more evident, than during seasonal surges in demand.

Annual bonanzas such as Christmas, Cyber Monday and Black Friday place additional pressure on retailers’ IT infrastructure. This is reflected by the 69 per cent of retailers surveyed who say that dealing with sudden spikes in demand is significantly influencing the direction of their technology spend. And over a third of retailers say that pressure on their infrastructures is intensifying year-on-year as activities (such as Black Friday) gain greater traction among customers.

The buckling of infrastructure at peak times is symptomatic of retailers’ core IT investments not adapting to the broad range of channels (social media, online stores, mobile apps, etc.) that customers now use to interact with them. Technology has also changed shopping patterns.

Despite this, the vast majority of retailers (67 per cent of respondents to Ovum’s survey) continue to rely on in-house, on-premise applications and infrastructure to support their digital initiatives with no plans of moving to outsourced or cloud-based platforms, software and services in the next 12–18 months.

This reliance on legacy technology stifles retailers’ ability to meet order booms. It also leaves them unable to exploit the full value that new innovations can deliver. This lack of agility and flexibility are impacting UK-based retailers’ ability to make timely course corrections when fluctuations in market demand happen.

So what’s the solution? At present, according to our research, only 5 per cent of retailers in the UK currently use cloud-based delivery models. The benefit of cloud-based model is that they provide high-availability, scalability, and redundancy and can effectively be switched on and off as need and demand arise. Equipped with such a system, retailers can respond quickly to market movements and keep up with orders. And if a retailer can work with a service provider that can maintain these cloud environments, they can then free up their own time and resources to focus on delivering the “ultimate customer experience.”

Achieving this involves looking at all technology priorities and making sure that inventory and stocks are managed efficiently on the back-end while the digital efforts are focused on visually improving the front end.

The aim of all technology spend in retail though however is to create an unrivalled customer experience. Retailers have come to realise that, in a rapidly evolving marketplace, they need to continually invest in technology to make their operations (and by extension the customer journey) more efficient and their products and services (and by extension their brand) unique and remarkable.

To do this, they have to find newer ways of engaging customers, implement them do it quickly and effectively, and, in the process, change the dynamics that influence buyer behaviour.

Alison Wiltshire, global practice lead, retail and consumer goods, BT

Image Credit: Rido / Shutterstock