Digital technology has transformed the retail industry over the past decade.
The rise of ecommerce is at the centre of these changes, presenting both a major opportunity and a threat for retailers. Retailers of all shapes and sizes now require an online presence to be successful, whether the retailer is a major high-street chain running a flagship ecommerce site or a small boutique hosting its store on an Amazon micro-site. With the internet effectively flattening the retail marketplace, traditional brick-and-mortar retailers are being forced to reevaluate their core values and what they can offer the customer beyond an item and price.
Yet, there is clearly more disruption to come. MuleSoft’s 2017 Connectivity Benchmark Report showed that 89% of retailers expect their organisations to change more in the next five years than in the previous five, pointing to the ongoing need for retailers to meet the heightened expectations of digitally savvy customers through differentiation and innovation. Additionally, Ernst & Young expects that 70% of the UK’s biggest retailers will attempt to reinvent themselves for this new technology-powered omnichannel world, but as many as 40% will fail.
Challenges and opportunities
This high potential for failure might be an alarming prospect for some retailers. However, it also represents a fantastic opportunity for those who get omnichannel right by creating seamless, personalised customer experiences across channels. It’s a trend affecting not just the brick-and-mortar big hitters, but retailers of all sizes up and down the UK. After all, the advent of e-commerce levelled the playing field for smaller participants and forced behemoths to re-think their approach across web, mobile and physical stores.
Consumers now want a seamless journey that reflects the context of how they shop across devices and channels, whether that is merely browsing, seeking peer influence via social media or comparing prices for example. They want the retailer to know them and to personalise their experiences along the way. And shoppers want their experiences to be as pleasant and hassle-free as possible. Anything less and they’re likely to take their business elsewhere. Nearly two-thirds (63%) of British consumers polled by Barclaycard recently claimed they’d abandoned a clothing purchase due to frustrations with the in-store experience.
The card giant argued that click and collect capabilities could help to alleviate these sorts of pain points. In fact, 42% of consumers said it was a deciding factor in whether to make a purchase. Other consumer requests to speed up and improve retail services included: in-store touchscreens to check stock availability (30%); digital changing rooms to try on items via virtual reality headsets (30%); and apps to scan and pay for items without having to visit the checkout (19%). These consumer requests are at the cutting edge of omnichannel.
For the retailers that get it right, there are big rewards. A 2016 Fluent study revealed that nearly half (47%) of shoppers who interact with retailers across 10 or more channels make purchases from their favourite website at least once a week, versus just 21% of shoppers who engage across one to four channels. The reason for this upward curve is that customers now create their own shopping journeys, traversing multiple channels before making a purchase. For example, they might start-off browsing products on social platforms, before going to an ecommerce site to find pricing and more detailed information. Then, they might go to a physical store to see the product, before arranging home delivery. To enable this, retailers must be ready to engage with their customers across multiple touchpoints and provide a consistent experience throughout.
The new reality of retail needs a commitment to shatter monolithic legacy systems and the associated governance. These have to evolve to expose and unlock capabilities and at the same time retailers need to be able to integrate new technologies and business models, without compromising process efficiency or customer data as new opportunities are developed.
An API-led approach
Delivering this consistency requires a fundamental change in how retail IT departments think about accessing core systems and integrating new systems, which has now become a strategic business-level concern. To provide a seamless customer experience across all channels and truly serve omnichannel customers, all of a retailer’s systems need to connect to one another. They must bridge every touchpoint and interaction, not just for the customer, but for store staff and management, who need richer and deeper access to data and capabilities than ever before.
To enable this, retailers need to look closer at the benefits of API-led connectivity. At a very basic level, application programming interfaces (APIs) allow apps to talk to each other and exchange data. They serve as the “digital glue” that exposes and connects assets, enabling retailers to create joined-up services and experiences for their customers. Taking this API-led approach to connectivity provides retailers with the opportunity to create unique and satisfying shopping experiences. A few possible API use cases include:
Sharing store locations
Location APIs can enable retailers to share all current store locations with third-party apps like Google Maps, making it easier for shoppers to find the nearest branch.
Making store inventory visible
Inventory APIs can provide real-time stock availability for shoppers looking to try out an item in-store. Through the e-commerce site or a mobile app, shoppers can learn whether the item they want is in stock at a local branch – down to the exact size and colour. Global fashion retailer GANT, for example, uses this approach to transform its omnichannel experience, using APIs to alert customers when an item listed is out of stock online and if it’s available nearby at a local high-street branch. This saves customers a great deal of time, energy and frustration, while offering the best chance of a completed sale.
Linking products to other digital ecosystems
Product APIs can be used to link product pages to social media platforms like Pinterest, ensuring the digital ecosystems are always refreshed with the most up-to-date information. Not only will this help retailers differentiate and drive sales but also better understand their customers. Building this single view of the customer makes it easier to tailor marketing and promotional activities, which in turn builds loyalty in a virtuous circle.
The age of the connected consumer
The future of retail centers around creating seamless, omnichannel experiences for customers, who need to be at the heart of everything retailers do. However, new age shoppers don’t just want consistency across touchpoints; they want highly personalised experiences across touchpoints that offer new recommendations, promotions and other value-added services.
API-led connectivity can help retailers innovate without compromise, building vital customer loyalty in the process and future proofing the organisation as new channels and services are added over time. It will require IT to operate in a whole new way; and though this new operating model will take time and effort to achieve, the rewards will speak for themselves.