New directions in retail technology

Technological innovation continues to drive success in retail on many fronts. Providing service across multiple channels, integrating technologies in-store to engage customers, fulfilling online orders with increasing speed and leveraging mobile platforms to reach consumers anywhere, at any time, are among the key challenges facing every retailer today.

The speed of development is relentless. As the Retail Week Technology Summit, held in partnership with Cable & Wireless Worldwide, will show, retailers must work ever harder to identify the opportunities presented by technology.

Ikea head of master planning and enterprise architecture Benedetto Conversano believes there are three key technology trends affecting all industries – mobile, social media and the cloud. However, he sees new technologies as tools to implement business strategy rather than developments that drive a company’s direction.

“We never see the implementation of technology as the first question,” he says. “The most important question is: ‘What is the right improvement in the business process?’. People tend to look at technology trends and ask themselves how to respond to them. We strive to do the opposite. We have a successful business model, big size and fast growth, and the right question is how to bring it to the next level. Then we ask ourselves what we need to do to address those changes, and often technology is a good component of the answer.”

One of Conversano’s main priorities for the past six months has been the challenge of multichannel retail.

At the beginning, Ikea “had been cautious to realise the potential of ecommerce in its unique market”, but Conversano says the retailer now believes that “multichannel fits really well with our self-service concept, and finally the two things are coming together”.

Involving the IT team throughout strategy development is key, he adds. “Ikea understands that if we are part of the definition of the business strategy then we can provide the best solution,” he explains.

His team has developed a new multichannel direction, which is currently going through the approval process before being translated into five-year plans. It is designed to make the Ikea approach even more customer-centric and includes elements ranging from the continued roll-out of mobile touchpoints to end-to-end automisation of the supply chain with full integration of the store processes.

A customer-centric approach is also a priority for Graham Benson, IT director of online retailer M and M Direct. As omnichannel retailing develops, retailers should stop talking in terms of channels, he says.

Business strategy should be led by consumer behaviour, and technologists should think more about “what developments are required to meet changing consumer behaviour – the technology you deploy should be based on how you are going to meet the needs of your consumer”, he says.

Social media impact

Another challenge retailers have to grapple with is the use of social media. According to Benson, there are still fundamental questions about whether social media should merely be a customer service tool, whether retailers should try to monetise it, or whether the development of social commerce could prove counter-productive.

“I don’t know how much my consumers like the idea of monetising,” he acknowledges.

Answering such questions requires experimentation with social media and some retailers are measuring tangible results. Shop Direct, for example, deployed social media ‘share’ bars on product pages of its Very website in January, which have proved effective at driving additional traffic, according to the company. In April, about 3.5% of Very customer ‘shares’ on Facebook resulted in a direct click-through to the site.

According to Shop Direct social media and mobile lead Jonathan Hudson, social media should “wrap around whatever you’re trying to do” as a retailer, and it is effective at boosting search engine optimisation, user-generated content and conversion. Hudson is constantly exploring the latest social media platforms, such as Pinterest, which has already been useful in encouraging users to visit Shop Direct sites.

But it is mobile technology that is particularly effective at delivering tangible growth. According to Hudson, a year ago, 1% of the group’s website visits were via mobile, now the figure has risen to 25%. “For us as a business, how we harness mobile traffic is critical,” says Hudson. “And that will only grow.”

The customer’s experience on mobile platforms is vital, and the group is investing in the next generation of its mobile site, focusing on design, interaction and the user experience.

It will also add to the number of mobile apps. “Apps are a great tool to engage with existing customers and try to delight them with great content,” says Hudson.

Personal experience

Other areas of mobile technology Hudson is keen to explore include personalisation and geo-location.

Personalisation and relevancy is important on mobile phones, as the devices are “hyper personal”, Hudson says. Tablet devices, on the other hand, provide potentially lucrative opportunities for advertising and content. With online video also increasingly featuring in Shop Direct’s media mix, “it’s all about channels complementing each other”, he adds.

Ikea’s Conversano concludes: “At the end of the day, technology can do much more than you will ever need. We know technology is not going to be a limitation.”