Retailers Prioritize Omnichannel Operations in Technology Spending
The cross-channel behavior of today’s consumers are causing retailers and brands to re-evaluate the technology they're investing in. The result has been increased investments in technology systems enabling omnichannel operations, such as order and inventory management systems. That’s just one of the key takeaways from Total Retail’s 2019 Retail Technology Report, which was produced in conjunction with Arm Treasure Data, an enterprise customer data platform. In this year's second quarter, Total Retail surveyed its audience of retail executives to get a better understanding of their current usage of technology, future technology needs and wants, and the buying processes within their organizations.
When asked to identify the technologies that their companies are currently using, those at the top of the list had a familiar theme: they were systems that can help retailers track inventory and fulfill orders across multiple channels. As brick-and-mortar retailers look for ways to fend off online pure-plays and direct-to-consumer (D-to-C) brands, they’re increasingly using their stores as product distribution hubs in addition to a transaction channel. Programs such as buy online, pick up in-store (BOPIS), buy online, return in-store (BORIS), and ship from store have proven to be popular with consumers and retailers alike. They help to get orders into customers’ hands faster — a growing need in a world of same-day and next-day shipping — and save both parties on shipping costs.
Consider that 69 percent of respondents said they're currently using inventory management software and order management software, respectively, the highest among all answer choices — and by a relatively significant margin. Security/fraud prevention software was the next most chosen answer, with 54 percent of respondents using the technology. Furthermore, 52 percent of retailers plan to increase their spending on inventory management software in the next 12 months, the most of any technology. Following closely behind was order management software, with 50 percent of retailers planning to increase their spending on the technology in the next year. Being able to better serve today's omnichannel shopper is a top priority for retailers, and it's reflected in their technology investments.
Integral to the execution of programs such as BOPIS, BORIS, and ship from store are technology systems such as inventory and order management. They help to ensure the right inventory is in the right place at the right time, enabling seamless fulfillment of orders no matter how the customer chooses to transact. As this trend continues to grow, expect retailer spending on inventory and order management systems to grow with it.
Tips for Transforming Omnichannel Operations
As the data from our report indicates, retailers recognize the importance of seamless omnichannel operations in capturing and retaining today's consumers. Here are some tips to help your business begin to optimize its omnichannel operations — with the help of technology:
- Getting Real With Real-Time Decisioning: Real-time data is a crucial component in mastering the omnichannel approach. Take BOPIS customers, for example, who require relevant last-mile connections to keep pace with their customized journey. Real-time decisioning powers the omnichannel experience. A real-time engine requires real-time data that provides a current and up-to-date understanding of customers as the basis to interact with them in highly personalized moments across their journeys. Without it, a brand is unable to facilitate a seamless customer experience.
- Identifying What's Truly Driving Demand: To understand how to flow inventory to prevent costly mistakes, consider external factors such as GDP, the Consumer Price Index and weather patterns — and how they impact the supply chain forecast. When companies rely solely on internal historical data, they miss the mark on forecasts, resulting in stock-outs or obsolescence risk.
- Bridging the Online and Offline Customer Experience Gap Through Mobile: Innovative retailers are taking the power of the smartphone one step further by utilizing mobile technology to fill the void between online, offline and everything in between. If leveraged properly, mobile can serve as a vital channel to conduce consumers to react between the digital and the physical, converting their typical “idle” attention to engaged and actionable.
- Creating Well-Staffed Collection Locations: Customers using BOPIS also want store staff to be help them as soon as they arrive in-store — that is if no automated pickup is available. Research shows the lowest-scoring retailers had collection desks staffed only 57 percent of the time. Clearly there's room for improvement, even among practiced retailers. For store managers and customers alike, staffed pickup desks speed up the process when no self-service pickup options are offered. Attentive associates can also answer questions and help customers, improving the experience.
Total Retail's third annual Retail Technology Report provides valuable insights into the technology landscape within the retail industry. The data collected from 100-plus retail executives serves as a road map for retailers and brands, identifying the technologies their competitors are currently investing in as well as what they’re targeting for future spend.
Download Total Retail’s 2019 Retail Technology Report today.
