Building technology companies, Forum

The Digital Transformation Of Retail

Anik Bose, BGV General partner shares his perspective on the Digital Transformation of Retail. The digital transformation of retail is reinventing how retailers engage their customers, utilize their assets, improve worker productivity and drive supply chain visibility. Not only RFID, BLE and IoT sensors but also video cameras equipped with advanced computer vision algorithms are becoming instrumental in enabling supply chain reinvention while advanced behavioral analytics are changing in-store execution, pricing and marketing functions. While technology innovation is serving as a catalyst for this transformation, the shift in customer behavior is playing an equally strong role, as customers increasingly prefer using multiple touch-points for resolving issues. They often expect an integrated and seamless experience and furthermore, enriching customer experience requires that traditional and digital channels complement each other and be used simultaneously. The customer journey from engagement, product discovery, purchase and post purchase provides a good set of illustrative examples of this digital transformation.

  • Engagement – Mobile devices are becoming central to customer experience and engagement; Social media is changing the ways of creating brand value and loyalty
  • Product Discovery – Digital mediums and interactive displays are providing relevant context-aware messaging leveraging IoT and analytics; Need is being created on the go, at the point of discovery – not restricted to physical or virtual retail channels.
  • Purchase – Omni channel is becoming a mainstream trend supporting the integration of the best of online and brick and mortar retail. Digital wallets and NFC are fast becoming a reality.
  • Post-purchase – Point of service is being reimagined with proactive insights to delight customers. Customer 360 driven engagement and post purchase experiences and actions are coming together to resolve customer issues. Self-service is becoming easier with automation and digital IVR tools.
In order to compete effectively with ecommerce giants, retailers are required to increasingly leverage technologies that enable them to blend the best aspects of in-store and online shopping. One example is to provide real time customer reviews and ratings at kiosks or via mobile apps to help on-site customers make informed purchasing decisions while they can touch and feel the product. Another tactic is leveraging social analytics tools for frictionless commerce by better understanding customer sentiments. All of these tactics require collecting and leveraging consumer data to make real time decisions in-store and online at multiple levels of the organization. This requires both a culture shift as well as embracing cost effective technologies to automate the data collection processes, be it at the store, warehouse and or distribution centers levels. Profitect (www.profitect.com) a BGV portfolio company is a SaaS firm that is transforming in-store workforce productivity through advanced prescriptive analytics to drive improved profit performance. The company’s turnkey solution utilizes customer’s data to deliver store level optimization actions instead of static reports to increase sales and margins. The company’s prescriptive analytics technology utilizes pattern recognition to identify performance improvement decisions and automatically delivers prescribed actions to the appropriate personnel and then tracks and monitors execution across store operations, loss prevention, omni-channel, marketing and merchandising. This closed loop solution often generates 100% ROI within 6 months. Profitect has successful deployments at retailers like ASDA, Ahold, Lowe’s, DSW, Weis and dozens of other key retailers. Gartner’s view on improving in-store worker productivity is highlighted in the next chart. Slide1   Intellivision (http://www.smart-retail.com) another BGV portfolio company applies advanced video analytics across multiple markets with Retail being one of the key customer segments. The company’s product enables retailers to capture and analyze video data around store metrics and customer analytics – this includes customer counts, demographics, store traffic, dwell times, customer service times as well as queue management and metrics (one of the highest accuracy rates). The company provides management dashboards and store reports and works with leading OEM partners like Zebra, 3VR and NLSS amongst others to service the retail market. When it comes to in-store business intelligence, retailers can now literally remove the blindfold that has been holding them back. With the use of real-time affordable visual intelligence, today’s retailers can clearly see the path to understanding daily activity in the store and maximizing the use of every square foot.   New data from network-based video, combined with data from existing sources, presented as actionable data, can drive more targeted decisions about merchandising and promoting products, directing traffic more effectively through the store and maintaining best-in-class customer service at all touch points. Grid Dynamics (www.griddynamics.com) another BGV portfolio company helps enterprises transition to the cloud and to enable them to develop new features, test new ideas and evolve new services to address insatiable appetite of consumers for new digital services. The company has enabled retail customers like Macy’s, Kohl’s, Sephora and American Eagle make this transition. BGV believes that Digital Transformation of retail is a multi-year journey, one that requires a fundamental technology enabled redesign of the underlying processes and business models. Retailers that embrace and invest in technology innovation will be able to thrive in this new world. Those that pursue incremental piecemeal improvements will struggle to survive. Finally we believe that much of the needed technology innovation will come from start-ups not just incumbent retail vendors thereby requiring greater collaboration in the retail eco-system – amongst retailers, suppliers, incumbent vendors, start-ups and system integrators.