UK retailers are caught in a perfect storm. Toys R Us and Maplin are already in administration, Debenhams, Mothercare and Carpet Right have issued profit warnings and even Next is finding the climate challenging. With a weakened pound leading to higher sourcing costs, a squeeze on customers’ real incomes limiting non-essential purchases, and consumer spend shifting from possessions to leisure and entertainment, it seems inevitable that the coming months will be tough for the retail sector.
But even in these turbulent seas retailers can stay afloat and even prosper if they adapt to consumers’ new shopping behaviours, embrace technological developments, and make best use of their data. Using application programming interfaces (APIs) to connect their enterprise application to web-based services and third-party systems, retailers can unlock the value of their proprietary data and apply existing computing power to newer technologies, bringing them into the modern age of mobile devices, web applications and cloud-based software.
Let customers steer their own course
Online revenues continue to grow steadily while sales at physical stores stagnate or decline. British Retail Consortium (BRC) Christmas trading figures show a scant overall growth of 0.6% against a healthy 7.6% increase in online sales. Retailers are well aware of the need to embrace ecommerce – with Superdry’s success largely accredited to its online-first approach – but simply having a web presence is not enough; retailers must also give customers choices over how they shop.
For instance, whether they’re shopping on desktop or mobile, customers should be given all possible options for delivery, including next day, timed slot or low-cost options. They should also be able to see local stores where the product is in stock for immediate collection, along with alternative next-day pick up locations. These options cater to differing customer needs, from those in a hurry and prepared to travel further or pay more, to those who have plenty of time and prioritise value or convenience.
The same principle applies to in-store shopping. If a product is not on the shop floor a sales assistant should be able to simultaneously check stock, advise on local availability and reserve for pick up, as well as giving options for home delivery. They could even suggest an alternative product that is in stock and immediately available. Sales assistants should be able to access this information using a tablet to avoid leaving the customer while they access a computer terminal. In fact, John Lewis has recently invested in this kind of tech; spending £4 million to implement mobile technology in-store to allow staff to help customers with product queries on the spot.
Providing these options requires access to real-time information from numerous sources including inventory and delivery systems. APIs can expose these functions as services and tie them together into a single workflow so when the customer or sales assistant enters a query via a website or app, the system uses underlying services to access the necessary application functions and aggregate the data required to present all options. The use of APIs to track stock online can also give retailers real-time insight into store inventory levels, which helps to streamline in-store delivery and pickup for customers.
The in-store experience is a critical part of enticing consumers back to the high street. This means that retailers should be making the most of APIs to deliver a range of innovations; beyond allowing staff to check stock levels via mobile devices. For example, APIs can be used to developed self-service kiosks for customers to use in-store that can let them shop for products, sizes or colours that may be out of stock in that particular location. The use of APIs can also significantly improve the payment process, allowing retailers to integrate third-party payment processors such as PayPal or Amazon payments into their online and in-store POS systems.
Tailor the voyage to customer needs
Today’s consumers expect a personalised retail experience, with recommendations and offers tailored to their preferences or habits. In fact, retail brands that create personalised experiences see revenues increase two to three times faster than those that don’t. John Lewis is taking personalisation seriously with the opening of its new experience-focused White City store. Its customers can book a consultation with a personal stylist and then keep in touch with them via an app-based service that sends alerts when a relevant product is released or reduced in price.
Mobile apps provide a unique opportunity to deliver a personalised experience as customers are continually logged in and retailers can determine their location to deliver relevant information about local in-store promotions or events. But retailers are currently failing to make the most of the in-app opportunity – simply replicating the browser experience. Over half of consumers want better incentives and loyalty schemes from retail apps, while a fifth want tailored offers based on their shopping history.
Personalising the retail experience requires rapid access to real-time data and analytics, which APIs can deliver. They can be used to grab data from external sources – such as weather or location data – and layer it with customer data such as browsing or purchase history. The insight gained can be used to tailor customer interactions and recommendations to their immediate context as well as their personal preferences.
Don’t fear uncharted seas
Continuous innovation in Artificial Intelligence (AI) and machine learning brings exciting possibilities for retailers, so they need to be open to exploring new technologies. APIs can be used to feed data from multiple sources into machine learning systems, which become increasingly effective the more they are used.
Last year ASOS rolled out visual search functionality in its mobile app, allowing customers to upload a photo of an item they like – perhaps a friend’s shoes or a celebrity outfit – and find similar items within the ASOS product range. Amazon’s new Echo Look goes one step further, working with Alexa to take full length customer photos or videos and deliver outfit advice and recommendations, allowing users to discover new brands and understand the styles that suit them best.
AI-based platforms are also being used in physical stores with Macy’s testing an in-store mobile service where shoppers can ask IBM’s Watson about store products, services, and facilities. In future AI is likely to eliminate checkout queues by updating existing scan and go technologies, where customers scan and pay for items using their mobile device. AI platforms are currently in development to track product movement through cameras with machine vision, allowing customers to enter stores, pick up what they want and leave without having to queue to pay.
The retail sector may be sailing into choppy waters but, by making the API economy work for them and updating workflows to provide customer choice, personalise the experience through real-time analytics, and integrate innovative AI-based applications, retailers have a far greater chance of weathering the storm and sailing safely into calmer seas.
Guy Tweedale, Regional VP of Rocket Software
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