A dramatic shift in consumer behaviour, driven by digital innovation and the convenience of online retailing that makes products easily attainable, has impacted the retail industry. The future of online retail will depend on how the industry leverages technology to gain consumer loyalty.
According to Mark Collin, head of European Retail Practice at ThoughtWorks in Europe, this will be the largest ever click-and-collect festive season, made ever-more possible because of the "within five-hour deliveries" being provided by Amazon.
Therefore, organisations that can offer a multiplex experience - seamless invisible channels that work for the customer - will have a competitive advantage, says Collin. "People still love to shop, and retailers that have figured out how to build in digital and make it truly appropriate for their customers will stand the test of time."
With mobile now being the device through which 60% of retail transactions, searches, browsing and paying are being channelled, the 'year of the mobile' has passed by, and retailers that have not embraced mobile in their consumer experience will fall behind fast, says Collins.
He points out that because mobile is now being used for payments, consumer experience and apps, everything is heading for the mobile. Therefore, back-end systems need to be able to provide this kind of capability, which is where the big challenge is - most stores have lots of legacy systems designed to be efficient but not responsive, he adds.
According to Collin, most retailers in the mature markets are grappling with the size and complexity of systems they have built over many years. New retailers and African retailers have a great opportunity to start from a different position - leaner, lightweight technologies and processes that are multiplex (omni-channel) from the start - giving them a competitive advantage.
He believes the retail industry should adopt the lean and agile principles to operate their stores and adopt technology - which means they must test, learn and fail fast.
Also, they must build only what is needed to get to market quickly and get customer feedback quicker, says Collins. Co-creating with the customers and user testing throughout ensures retailers build the right systems for the customer segments they cater for, he adds.
"Have a vision for what you want your brand or experience to be, but start small and build quickly and iteratively against it."
In 2015, it will be about retailers transforming their businesses from being cost- or product-driven to being truly customer-focused, digital and multiplex, says Collin.
Retailers will become more digital in their approach to the whole customer journey; they will carry less stock and be smarter about where they place it too, he adds.
The intersections between retail-banking, retail-travel and retail-brands will continue to blur with all the industries fighting to directly own the customer, he concludes.
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