A Case of Mistaken Identity: Retail Technology

Listen closely and you’ll overhear debate in retail boardrooms around identity. ‘Are we a retail company? Or are we a technology company?’ News flash – that’s a fruitless discussion because every single step of the customer journey is powered and enhanced by technology. So if you’re still discussing this point, you’ve missed it entirely. The question is how willing you are as a retailer, to invest in the tools that will seamlessly guide the customer from discovery to delivery. And organizing your teams so that these business functions aren’t siloed is integral to ensuring positive, recurring customer experiences.

Let’s dial this back for a second to understand why this discussion is happening in the first place. At some point there was a polarization between technology and retail; the nerds got custody of the technology, and the creatives and merchants focused on the retail part. (This rings particularly true for those in the fashion industry.) In a historical context, this made sense, considering retail technology was a way of keeping track of inventory (barcodes) and processing payments (credit cards), but the evolution of technology means this binary view of the retail business model is now defunct. So as the customer moves along their path to purchase, let’s discuss the technology that underpins each step of that journey.

The Inspiration

We realize that within design and creative functions, there may be some stakeholders resistant to the notion that theirs is a role that has much, if anything, to do with technology. But hear us out; you’ve been using technology and just didn’t realize it.

Let’s start with the origin of a new product idea. It is derived from sensory experiences. And the most important sense as it relates to fashion is undoubtedly sight. And where do creatives and consumers alike browse and become inspired? Social media, of course. Instagram, more than any other platform, has transformed the process of product and brand discovery through the ability of individuals and businesses to post images, tag, and interact with others.

The technology behind the inspiration? An image captured virtually has thousands of data points attached to it. Whether it’s the color of the dress, the length of its sleeve, the brands tagged in that post, or the number of interactions that post receives; these data points guide and shape both the creative and customer response. (And shameless plug here, we have just developed image recognition technology that can extract these very ‘data points’ from Instagram posts, showing how and where fashion items, colors, and design attributes are growing in popularity. Cool, right?)

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The Search Continues

The number of ways in which consumers can get their hands on product seemingly multiplies daily, yet how the shopper hones in on what they specifically want depends on their individual priorities. Is price the most important consideration? If so, they’re likely going to be using sites like RetailMeNot to check for discount codes, or ShopStyle to make ensure they’re getting the best price for a specific item that’s available across multiple sites. (And to many a retailer’s terror, they’re even bypassing Google altogether and searching directly on Amazon.)

If, say, flexibility is important to the consumer, they might use a service like Try.com which enables members, for a nominal fee, to try on items for seven days, without being charged out of the gate. You send back the items you don’t want and are only charged for what you keep. Low up-front obligation and maximum benefit to the consumer.

But truly the biggest macro shift of all has been mobile shopping behavior which has been rapidly increasing in frequency; research shows that 80% of consumers use their devices inside physical stores to check prices, product features, and reviews. Taking this one step further, how does a consumer locate something they don’t quite know where to find? Enter Asos, a leader in the mobile commerce space, who has leap-frogged its fashion industry counterparts with not only its speed-to-market but also its app developments. One of its most recent is a visual search feature that enables users to take a photo of an item and locate similar items within the e-tailer’s inventory. If Asos’ volume of mobile traffic and purchases, 70% and 58% of their respective totals, are any indication, these enhanced features will only give their mobile shopper more reason to keep that phone charged and at the ready.

You’ve Got Questions, We’ve Got Answers

The human touch in customer service is irreplaceable, right? Well, actually, that doesn’t hold so true in today’s digital world. While the human aspect is not to be diminished, technology does alleviate the high costs of providing excellent customer service. How so? Let’s start with the basics: online product reviews. Sites that take a (mostly) open-book policy on customer feedback get in front of common questions and objections on topics including fit, quality, and materials, and as a result, decrease the likelihood that they’ll incur the costs of returned merchandise.

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And speaking of returned merchandise, this is the bane of (and bottom line drag on) every retailer’s existence. And while technology doesn’t necessarily answer the question of ‘does this make me look fat,’ it can help to minimize the risk of merchandise return with optimized product recommendations drawing upon data points on previous preferences, materials, and sizing. It’s no small amount feat considering one of the industry leaders in fit prediction, True Fit, has helped retailers utilizing its services reduce return rates by nearly 20%. Undoubtedly, everyone benefits with smarter product recommendations: the industry which has never adopted a universal standard of fit, and the shopper who knows that product recommendations have been tailored to her needs.

Today’s digital customer experience wouldn’t be complete without a mention of chatbots, a virtual sales assistant who can lend a helping hand during the online shopping experience. Allow me to relate a recent experience on a fashion retailer’s site. I wanted to ask some questions about how their denim styles fit: how much stretch did they have, and should I size up or down? Let’s call my virtual shopping assistant ‘Erin S.’ She helped me pick a size in two different styles based on my usual sizing and other styles I had previously purchased. If I’m being honest, the assistance I got from Erin was at least as good, if not better, than my past experience in their physical stores. And she even told me ‘those jeans will look great on you!’ before I signed off. Yes, I let myself be flattered by a machine, but the point was I received the assistance I needed, checked out in a timely fashion, and felt confident in my purchase.

Without technology, e-commerce customer assistance would be incredibly costly, both from a human resource and operational standpoint, and if there’s one thing to be said about retail today, that which preserves margins should be a non-negotiable.

Please Take My Money

We’ve talked about the last mile before and how a lot of things can go wrong, and online checkout is arguably the singular most important step in the customer journey. Why? Because this is where the customer finally has to put their purchase intention (and payment details) out there to the universe and trust the e-commerce gods to deliver on what they promise.

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While one of the first retail technology revolutions was the credit card, today’s payment systems are a far cry from where they originated. The industry leader, PayPal, whose payment systems enable one-click, secured checkout across a universe of retail sites, has both helped consumers replace outmoded and higher-risk types of payment, and also given merchants access to a portal where customer payments are unified and the transaction fees affordable.

But as large enterprises know, there are more complicated systems in play where there are multiple payers and payees in a given transaction. Braintree, also a PayPal company, has helped companies like Uber manage this very type of payment flow. The beauty of it? Customers never know the complexity and infrastructure behind these types of systems. They simply hit pay and let the back-end do the heavy lifting.

And while it relates to in-person payments, I can’t help but get a perverse pleasure (considering I’m parting with hard-earned cash) when I check out using the iPad and chip readers that payment providers like Square provide. There’s a feeling of being in charge, green (no physical receipt needed), and secure, something that is hard to evoke in many online transactions. Happy and trusting customers – now there’s something for online retailers to strive towards.

Bring It On Home

I watched this video of Amazon’s automated warehouse no less than five times sitting here writing this, and without a doubt, the fulfilment of customer orders is really where the rubber meets the road. We’ve discussed at length today how technology has powered each step of the customer journey, and without follow-through on this last step, everything before it becomes meaningless. With customers expecting increasingly shorter delivery times, the fulfilment process, from the order capture, clear communication of its journey, and intact and on-time delivery, is everything to a retailer’s reputation. Amazon has set the standard, and there’s no rewinding the experience to which we are now completely addicted.

So there you’ve got it; 360 degrees of customer experience powered by retail technology. Scratch that. Retail is technology.