Every retailer is a tech company now and here’s why.
The advent of the internet and software has made it possible to capture and measure more data than ever before. Amazon, Walmart, and Google are a few that have spearheaded eCommerce, and have used software and technology to fundamentally change retail and the logistics that support it.
As eCommerce and omnichannel retail continues to evolve, every retailer is becoming a tech company. New software-as-a-service (SaaS) solutions are giving businesses of all sizes access to bigger, smarter applications that streamline every department—from engineering to sales and marketing to supply chain and fulfillment.
Big data, better possibilities
There’s almost too much information out there. Browser data, shopping profiles, loyalty programs, and more, are just a few of the mechanisms for capturing consumer data, and have provided retailers with a constant current of information about their buyers.
Data about demand patterns, product preferences, preferred delivery promises make it possible for retailers to improve the experience they provide to their customers—which is paramount to customer retention and loyalty. And, from one company to another, the profiles could be completely different.
The motivation behind buying toilet paper or running shoes is different. Just a few short years ago, the idea of buying either items online may have seemed unlikely, but times have changed. Whether you’re buying everyday products or something as personal as a running shoe, you can find both in stores or online, and the experience around that purchase can determine whether you’re a one-time buyer or a loyal customer.
Most retailers are continually optimizing how they measure that experience and determining how and where they should advertise and sell their products. Not every retailer wants to sell through Amazon. Online retailers and startup brands are continuing to develop strategies around listing products to drive more direct sales through their own websites. Social media platforms like Instagram give brands access to millions of customers wherever they are, while giving customers a quick route to buy what they see in their feed.
Direct sales, direct revenue
Marketing departments across the wide spectrum of eCommerce from small to large have adapted direct-sales strategies to avoid online marketplaces. They know by doing so they not only have potential for more sales but they also have direct control over the brand experience—engagement that starts long before the purchase through social media, but can end with a branded box on their doorstep.
Direct sales give retailers more freedom to be themselves. For starters, they don’t have to meet a marketplace’s one-size-fits-all format for branding content within a product page or brand shop page. Instead, their merchandising department can index and curate their catalog on their site and marketing can control how pages are advertised and to whom.
By doing so, they can see and manage all customer data from a single data set, instead of forfeiting that data to a marketplace. Insights can show how every channel is working together—or not working together. Changes and decisions can more easily be projected and executed.
With new tech from data analytics and integrated omnichannel campaigns that reach customers wherever they shop, marketers have been the most aggressive adopters of tech and their success shows—the way marketing is delivered has completely changed forever.
Same industry, different jobs
Other long-established retail business norms: the buy side, sales, merchandising, and supply chain are all undergoing transformations. Every department has to be data-driven because every retailer is now a tech company. These solutions are miles and decades away from when retail was just made up of physical locations.
Routes to sustained increased profitability can now be a result of how well your IT is managed and your data is mined rather than just your next promotion or regional growth into physical markets.
According to a study by LinkedIn, the number of people identifying as retail associates on their LinkedIn profiles has dropped 41.4% from 2013 to 2017. “Software Developer” is the fasting growing job in retail, another trend revealed in LinkedIn’s research, while IT and engineering jobs grew from 7-9% overall.
These statistics are just in the last five years alone. The change is coming fast and it spans every department of any digitally native brand as well as brick-and-mortar brands that moved online over the last decade.
Cutting-edge solutions, more customer insights
All the cogs and wheels running behind the best eCommerce sites need to be cutting edge to attract talent as well as customers. Leadership roles in retail now look very different than before. They require tech-savvy start up mentalities that are nimble and can change directions quickly based on data-backed information.
Data collected now at POS systems in-store, online, through social media and Amazon is combined into data “lakes” where marketers, merchandisers, and finance departments all pull from. What’s more, the accessibility to these data lakes is now self-service with BI platforms like like Tableau and Qlik.
Now marketers and merchandisers can ask direct data-pull questions like: “Do certain traffic sources lead to more removals?” Or, “What marketing campaigns reduce or increase the number of cart removals?” And, they receive instantaneous results from user-friendly cloud-based dashboards.
Embracing tech, improving logistics
We’ve all read about machine learning and artificial intelligence in logistics. Think Amazon’s dream of drone delivery and Domino’s Robot Unit (DRU) aspirations. While we’re not quite there yet, this improbability first announced to skepticism a few years ago, is now seeming like the real future.
Some experts have even projected in just the next 10 years we may actually see deliveries like this. Combined with the Internet of Things (IoT) linking every product to an overall tracking system, Logistics-as-a-Service (Laas) will go hand-in-hand with any future automated delivery.
But even before we get there, the supply chain has to change. eCommerce has forced retailers to change their entire business model and the logistics to support demand must keep up. This just simply isn’t possible with linear processes, static warehouses, and paper trails.
Today’s logistic platforms that are flexible enough to test and iterate processes can provide a route to increased profitability—much in the same way customer data does for marketing strategies. In fact, supply chain executives and CMOs can now work together to test delivery promises and flash-sale promotions.
With a flexible enough fulfillment solution and real-time customer data, they can see the correlation between two traditionally disparate departments.
New tech, evolving standards
Eighty-three percent of purchases still occur in a store, but even these traditional purchases are tied to a brand’s overall solutions ecosystem. In-store purchases can mean submitting a payment and having it delivered to your door. Conversely, BOPIS (Buy Online Pickup In Store) is becoming more popular to reduce time spent shopping in the store.
Interestingly enough, according to the same LinkedIn retail research from above, while the number one retail job is still sales (although it dropped by 41% from 2013 to 2017) the number two job is now in logistics and operations, which represented 13% of all retail jobs in 2017. As this number of jobs grow, with many being related to tech, the future is bright for retailers that are updating their solutions to meet customer demands and market expectations.
From sales and marketing to the logistics behind order fulfillment, new technology is changing how retailers do business.
The end goal? It’s all about the customer. Those that have the right ecosystem of technologies in place to help them understand who their customers are and how to meet their demands will win.