New report reveals role of the physical store has changed: digital transformation roadmap unveiled

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A new report ‘The Pulse of Retail 2021 – Connected Retail’ looking at digital transformation and connected retail has today been launched by Mercaux, the new generation platform digitising retail stores. Carried out across 200 retailers (by independent research firm Censuswide) and 2,000 UK consumers, the report explores the changing role of the store and reveals the importance of capturing customer behaviours – now perceived as just as important as selling products in bricks and mortar stores.

“It’s clear from our report that the retail industry is still in its infancy of digital transformation, but I’m buoyed by the progress that has been made in such a short period of time since stores reopened to the public,” said Olga Kotsur, CEO and Co-Founder of Mercaux.

“The role of the store has changed – it is no longer perceived as a simple sales channel, but instead a multi-purpose omnichannel centre. What the findings confirm for me is that retailers have been busy setting the foundations of digital success – particularly during the past 18 months – by upgrading their existing and implementing new age backend systems, such as OMS. They now find themselves at the next stage, on the very cusp of a digital transformation wave, finally allowing us to achieve our connected omnichannel retail aspirations. Exciting times ahead!”

Future role of the store – capturing behaviours and Clienteling top the list

Capturing the preferences and behaviours of customers in-store (33 percent overall but rising to 47 percent amongst CEOs) is now considered by retailers to be almost as important as selling products (35 percent), highlighting just how essential it is to unify the online and offline space to deliver a consistent omnichannel experience. The only other response that recorded over 30 percent importance across all respondents was “using a store as a customer relationship centre”, showing just how important deploying Clienteling capabilities is going to be moving forwards.

Stores now a priority for development 

When asked where physical retail sits in terms of priority lists across all channels, 73 percent of respondents said it was a High or Top priority. Interestingly, this was a consistent response across all retailers, regardless of size (from those with 50 stores to those with 1,000 plus). More than half also said that post-pandemic, their in-store revenues had rebounded to more than 60 percent of total, which would lead to high importance being given to future store investments.

Misconceptions rife about technology and time needed to transform

In terms of business infrastructure, the report revealed that over a third (38 percent) of the retailers surveyed felt that their systems were too old to support in-store digital transformation – a misnomer given there are vendors who have built universal solutions to build onto existing platforms. Of those that did not know what is needed to deploy in-store technologies, the IT respondents were highest, with 30 percent not knowing what it took to rollout. The more confident job functions were Omnichannel (100 percent), Marketing (63 percent) and CEOs, C-suite, Ecommerce and Retail (recording between 57-58 percent). The stark differences between job roles identify the need for better understanding about the reality for deploying digital transformation solutions between departments.

The findings also indicated a gross misconception of long lead times for digital transformation projects (from integration through to training and roll-out). A huge 68 percent estimated that deploying in-store technologies would take more than six and within this, 13 percent thought it would take longer than a year.  The reality is that by integrating with an existing infrastructure, it can take just one to two months to go live.

When asked whether retail teams were able to manage multiple technology transformation projects simultaneously, 43 percent admitted that they were unable to transform their stores due to not being able to manage more than one technology project at a time. A further 43 percent said they could manage this, but it would stretch their teams. Just 15 percent said they were able to comfortably work on multiple projects simultaneously.

Half of store associates see in-store technology as a threat

Sadly, 50 percent of retail respondents believe that sales associates working in their stores see in-store technology as a threat, demonstrating the need for thorough onboarding and training at the point of deployment. By investing time to show the value and demonstrate how it will help store associates to perform better, adoption rates and usage will increase.

Retail on the very cusp of a digital transformation wave

The top in-store digital transformation technology launched by retail respondents was Mobile POS (20 percent) – something that more than half of the consumers surveyed were keen to see deployed to help speed up their shopping experience. In second place was Clienteling solutions – of which 19 percent have already deployed, 25 percent were in the process of currently implementing and 28 percent were planning on doing so moving forwards. In third place was making and accepting appointments in-store (for styling advice etc)– of which 16 percent had already deployed.

The next solutions on the cusp of being rolled out to stores are Omnichannel and Self-Service consumer apps (31 percent) and Assisted Selling and Self-Service Kiosks following closely behind (28 percent).

Kotsur concluded: “Retailers need to start looking at the solutions which are in the planning stage for their competitors, as they are likely to become more popular in the next six months. They also need to listen to consumers wants and desires – our findings indicate that over two thirds would like retail staff to use inventory tools, and more than half were interested in using Digital Fitting Rooms.

Consumer interest and demand for a more integrated shopping experience is here. Retailers need to meet this need and quickly – very few can afford to wait for lengthy back-end systems to be built before embarking on digital transformation projects. Hesitating could be considerably damaging to their growth potential.”