Pocket Infrastructure: Turning The Retail Landscape Outside In

Mobile Shopping

With innovative consumer technical developments growing at a staggering rate, how can retailers better harness the power of consumer technology to deliver business capability? The transformation that has occurred in the retail world is truly breath taking. Not so long ago retailers just targeted customers on the predictable behaviour of in-store purchases based on need and cost. Now brands that want to stay competitive have to truly understand consumer habits that are more complex than ever.

The exponential growth of mobile, particularly for the way in which consumers use their devices throughout the purchasing journey both online and in store, has changed forever the relationship the retailer has with its customer. According to recent research on 2013 global mobile usage by Super Monitoring, 25% of all web searches are made on a mobile device and the average consumer actively uses 6.5 apps throughout a 30-day period, with 80% of mobile time spent in apps.

The way in which a shopper interacts with the world has changed forever. It’s essential that retailers create a compelling mobile experience, with 57% of mobile users saying that they won’t recommend a business with a poorly designed mobile site.

Shoppers browsing and purchasing via mobile phones is increasing. So too is the habit of ‘show rooming’, the practice of looking at merchandise in store, but then browsing online to find a better price. In 12 months, the number of consumers using their mobile handsets in-store has increased by 25%, according to Super Monitoring. The reasons for this include comparison shopping, searching for coupons, looking for reviews and, most significantly, purchasing on their handsets instead of in-store.

Whilst wearable technology doesn’t boast the same growth trajectory, uptake of smart products such as watches, glasses and wristbands is promising. There is huge development and investment in this market, with IDTechEx predicting that the market for wearable technology will reach $70 billion by 2024. The range and depth of consumer technologies, encompassing everything from smartphones to the latest apps, hand delivers retailers a real opportunity to exploit this environment when planning their long-tem business strategy. Retailers that ignore these developments do so at their peril.

Outside In

Retailers have the propensity to look only at their own technology and infrastructure to deliver new business capability. This internally-facing perspective ignores the functionality of the ever-increasing array of consumer technology, which is progressively shifting the way customer and brands relate. Retail brands need to better harness the power of these capabilities to leverage this ‘pocket infrastructure’ as a means to forge ahead with new customer initiatives.

And it’s not just the customers that retailers should be following, but also the way in which employees use devices. Retailers are not only allowing employees to bring their devices to work (BYOD), but are increasingly encouraging them to use them within the work environment. This empowers the shop floor to use the web, internal stock control systems or external applications for greater knowledge to help the purchasing process.

This could be showing a customer a celebrity wearing a particular product on Instagram, checking the measurements of a garment or ascertaining the stock status of merchandise. Increasingly shoppers interact with sales assistants, with 69% expecting them to have access to a mobile device.

Feeding this growth is the increasing number of social media sites and their associated applications. These offer retailers a goldmine of capabilities waiting to be leveraged for tangible business value and outcomes. For example, Pinterest’s price alert service lets users know when the price of the item they have saved changes. Pinterest is no longer just facilitating brand and product aspiration, but empowering real purchasing power.

Looking Beyond…

It’s clear that technology in the retail world has shifted, making way for customer and employee owned devices, new online platforms and the invaluable data that this generates. This presents a significant opportunity for brands to get ahead.

Up until now businesses have focused primarily on the systems and IT estate they own, lease or have control of. Retailers need to recognise how consumers use technology and fully utilise what’s becoming available to them outside of their own infrastructure. This will deliver an increased return on investments, a more relevant experience for their customers and a wider range of solutions available to them.

We have seen too many retailers heavily invest in bespoke technology solutions that quickly become obsolete. A good example of this can be seen with a major UK-based retailer that is planning to use electronic shelf edge labels in order to offer their customers personalised prices based on their purchase history, both online and in store.

This technology has no doubt evolved over a number of years however still requires significant investment in company owned and maintained infrastructure. Knowing what we do today about the opportunities of successfully leveraging ‘pocket infrastructure’, I doubt we would use the same technology or require that level of infrastructure and investment to deliver the same outcome.

I urge businesses to follow a ‘Capability Led Planning’ approach and widen their scope to consider the peripheral technology available to them. For the retailer about to adopt the electronic shelf technology, this approach would have presented simpler, cheaper and more sustainable alternative options for their consideration.

Opportunity

This level of planning is crucial if retailers want to reduce risk and successfully exploit third party, peripheral technologies. Retailers often get caught up investing millions of pounds in rolling out the latest technology to deliver a set of required capabilities. This approach will almost always produce the expected short-term outcomes but is likely to be an expensive, time-intensive exercise to deliver and make use of a technology that’s destined to become obsolete in a matter of years or possibly months.

This inwardly focused approach must be flipped, and effort directed towards leveraging the functionality of external technologies and information. Investing in best-in-class integration and compatibility to harvest capability will prove far more cost effective and a reusable way to achieve desired business outcomes.

This approach transfers the burden of technology renewal and maintenance onto the third party. The customer will always upgrade and seek to own the latest tablet, smartphone or other wearable technology. In the same vein, well-used app providers and platforms will constantly innovative and upgrade with new functionality and valuable information.

This provides retailers an opportunity to concentrate their efforts on being ready to make the most of yielding capability and preparing their IT to leverage new tech functionality, rather than buying, maintaining and owning it themselves. In order to truly benefit, retailers must be hungry to understand the emerging technology, apps and information, and what their capabilities are. This knowledge will help inform early roadmap planning and enable rapid adoption and capability delivery ahead of the competition.

Harvesting Capability

Retailers wanting to adopt an outside in approach should:

  • Understand and agree their business goals that can be measured now and in the future.
  • Define the business capability increments required to achieve this goal.
  • Always anticipate, plan and integrate.
  • Understand how consumers and employees use technology.
  • Understand what apps and platforms are hot now and what is emerging.
  • Plan how this third party technology can be integrated into their IT estate.
  • Ensure that they have a compatible foundation that can quickly and easily be configured to make best use of emerging external technologies and information.
  • Instil the concept of encompassing peripheral technology as part of the business landscape when delivering solutions. Doing this will broaden the range of options available for realising business value and achieving the company strategy.

Whenever in doubt, retailers must always remember that it’s no longer about the channel; it’s about the conversation they have with the consumer. Every interaction through every channel must be orchestrated and make sense for that individual. This involves not only a good understanding of the customer but also the ability to personally recognise them and then to build a meaningful relationship.

IT leaders have to fully consider and measure the opportunity that external technologies can deliver to realise true business capability. Seizing the capabilities that peripheral technology, applications and information bring will realise a healthy return on investment and improved agility to innovate. The opportunities have never been greater and will continue to grow, with consumer technology dictating trends in the business environment.

Exploiting the potential of ‘pocket infrastructure’ to identify and plan cost-effective, omni-channel solutions will fundamentally improve the conversations that the retailer has with its customer. And you can’t get better than that.

Daren Ward is a partner at Glue Reply and leads a team of experienced consultants working with clients such as Sainsbury’s and John Lewis. Daren has a passion for ensuring technology drives the best possible outcome for retailers and consumers alike. Daren has worked in IT for over 20 years. Before joining Glue Reply to head its retail practice, Daren was principal architect at Marks and Spencer where he created the first M&S enterprise architecture and went on to establish a successful business architecture team.