Today’s connected and networked world has created a fast-paced environment for growth, innovation, and optimisation. In retail, you’ll find businesses taking advantage of this new era of hyperconnectivity to deliver innovative consumer experiences for this new, networked economy.
MIT Technology Review calls the networked economy “the next economic revolution.” In it, commerce is created not through manufacturing, but by using technology to open new routes to market. Together, collaboration, social networks, the Internet of things (IoT) and business networks generate new forms of customer and product intelligence.
Savvy retailers are using this information to earn customer loyalty, enable innovation, and enhance resource optimisation in entirely new ways. Examples include Zara (redefining the speed of fast fashion), BMW (delivering a connected car with real time services based on the driver’s location and preferences), and Samsung (using technology to drive intelligent replenishment and avoid stock-outs). All of these product and process innovations are fuelled by the networked economy.
1. Hyperconnectivity = Omnichannel Sales
In retail, hyperconnectivity is reinventing customer experiences. It’s eroding the position of established players and creating huge opportunities for startups. It’s transforming sales channels and disrupting the supply chain. The key to this worldview is seeing online (or digital) sales as not just a new channel, but a critical piece of an omnichannel shopping experience that, when channels work in alignment, drive overall sales.
Retailers that interact with customers through social media and encourage online reviews can increase customers’ comfort with online purchases. Women’s apparel retailer Chico’s, for example, allows customers to select clothes online and have them waiting in a dressing room at their local store when they arrive. Chico’s also encourages customers to share their style adventures using Pinterest, Instagram and Twitter for added fashion inspiration.
2. Hyper Intelligence = Better Shopping Experience
Another big opportunity for retailers is the use of intelligent agents, or bots, to negotiate online on behalf of shoppers or brands. A consumer might specify certain rules or limits (e.g., gluten-free, size medium, or free shipping). Bots can also analyse shopping patterns and preferences to suggest sizes, new products, or store locations. The result: consumers save time and reduce frustration, while retailers and brands get information to fuel promotions.
Reversing the flow of information, retailers can connect customers with additional information – knowledge of a product’s key features and functions – while matching pricing and promotions to an individual consumer’s willingness to pay for certain attributes. Airlines, hotels, and car rental companies have used this approach (known as discriminatory pricing) for decades; predictive analytics technology allows us expand the use of this practice to retail.
3. Implement New Retail Strategies
McKinsey reports that networked enterprises are 50% more likely to have increased sales and be market leaders. Many organisations are finding the power in these connections. Successful retailers are at the forefront of using these new strategies to harness the power of the networked economy. Best-selling author and business consultant, Don Tapscott notes, “With the Networked Age, we have real-time systems that instantly analyse and evaluate what’s happening and enable us to respond infinitely more quickly.” Retailers can tap into this networked knowledge with innovations such as:
- RFID-enabled sensors on products
- Automated shelves and coolers
- Smart fulfilment centres
- Perishable tracking
- Fleet operations monitoring
- Sustainability monitoring
- Digital signage
- Automated store lighting
- Cold chain and perishable tracking.
The quantifiable benefits of the networked economy are impressive. By automating operations, the UK’s three largest supermarkets experienced a 50% reduction in shrinkage.
4. Personalised Marketing
Today’s consumer realises the possibilities of social, local, and mobile interactions and expects ever-more personalised messages and promotions – the elusive “segment of one”.Eighty-one percent of American and British millennial adults surveyed said they value experiences more than material items. To draw in consumers looking for compelling personalised shopping experiences, connected retailers are using mobile promotions that combine two factors. The first is proximity-based consumer interaction and the second, interactive, personalised, seamless digital experiences.
5. Exceptional Customer Service
The networked economy makes it possible to redefine customer service across the retail experience. The wearable technology market is forecast to reach $70 billion by 2024, offering even more avenues to expand customer service as sellers interact with customers through their wearable devices. Think of it is a new partnership of the consumer and retailer working together to make, sell, and move products, services, and ideas. With local-use apps, user-generated reviews, and mobile wallets, consumers expect exceptional experiences regardless of location or channel. Here are some other trending opportunities for retailers:
• Parking assistance
• Security, fraud, and counterfeiting controls
• Automated checkout via smartphone
• Automated vending machines
• Connected homes
• Interactive, personal digital signage
As people and business networks begin to take advantage of the Internet of Things, retailers and consumers are poised to reap the benefits of completely new ways for both of them to interact with the world. How retailers adapt to the emerging hyperconnected marketplace will determine whether, and how well, they grow and thrive. The key is new retail strategies built on omnichannel experiences. Join the conversation on the networked economy.