Innovation always sounds like a great thing. New ideas, new technologies, and new best practices can help a retail business boost profits and engage new customer bases. Somewhere between ideation and implementation, though, innovation morphed into a buzzword. Sure, people love to throw the word around, but do they actually understand what being innovative means?
It’s up to retail executives to sort through the hype and find real applications of innovation that make sense for their stores. It’s the only way they can achieve true innovation that will pay dividends. Seeking out sincerely innovative concepts and technologies can help increase market share, drive engagement with customers, and lead to bigger profits. Advances in technology can streamline every part of the retail business — from supply chain management to the point of sale.
Despite the concrete benefits, the retail industry has always been slow to embrace and adopt innovative ideas.
What’s Been Squelching Implementation in Retail?
It’s not that retailers don’t want to use new ideas to improve sales and the overall customer experience. More often than not, retailers have difficulty implementing these ideas on a broad scale. Combine this with the fact that technology often advances faster than retailers can adapt, and it’s easy to see the complex challenges the industry faces.
The sheer scale of implementation can be a hindrance, but in today’s economy, retailers don’t have much of a choice. With more than 78 percent of consumers making at least one online purchase every year, brick-and-mortar stores must capitalize on innovative technologies to remain competitive.
Today’s consumers are tech-savvy, after all, and they want to engage with technology at all times, even when they’re shopping in brick-and-mortar locations. A 2014 study revealed that 56 percent of consumers expect sales staff to use mobile technology to assist them.
One example of how retail has been slow to adapt is the implementation of credit card readers at the point of sale that can read smart chip credit cards. The failure of magnetic strip cards has been widely documented through several major data breaches, but retailers were still sluggish to employ new chip card readers. The cost and scale of this project seemed too massive, and sticking with the status quo was, in short, easier.
Target attempted to implement the technology nearly a decade ago but stopped short when the rest of the industry didn’t follow suit. Had retailers adopted smart chip cards when they were ripe for the picking, companies could have not only saved an untold amount of money, but also maintained consumer confidence.
Sorting the Practical and Effective From the Fly-by-Night Fads
The key to figuring out what types of innovation are real and have useful applications in the retail world is to separate hype from help. Retailers have to be selective about which innovative ideas they choose to implement; some new technologies sound great in theory, but they don’t actually drive revenue or engage customers. Spending time on ineffective innovation can drain the operation’s budget and take resources away from useful applications of innovation.
For example, a mobile application that helps consumers pay for items without standing in line is a helpful example of retail innovation; it’s something that can be implemented in virtually any type of retail store. Adding Facebook Like button data to hangers, on the other hand, is an example of innovation as a buzzword.
Customers may be interested to note how many times people have clicked the Like button on an item, but this doesn’t inform their decision to purchase in the same way that posting user reviews of a product might. Retail executives might see a short-term increase in sales from a novel approach to using Facebook likes on their bestselling products, but it won’t necessarily help them reach long-term sales goals.
This type of idea is more of a fad than it is an industry-changing innovation.
What Technologies Can Be Successfully Implemented in Retail Stores?
Bottom line: If retailers are going to implement new technologies in their stores, they need to solve real problems.
Perhaps the best example of a helpful retail technology advance is the concept of real-time inventory tracking. When customers shop online, they can access data that tells them whether an item is out of stock, how many are left for sale, and when the item can be expected to be available for purchase again. Consumers want to have access to this type of information when shopping in a physical location. Radio frequency identification tracking use in a real-time inventory system gives sales staff access to this information, which can then be passed along to the consumer.
However, shoppers don’t just crave the thrills and frills of technology; they also want a personalized shopping experience. They want to feel like the store is designed with them in mind. Technologies like mass personalization offer a great way to deliver these personalized experiences to specific demographics. Through promotional emails and text message alerts, retailers can alert targeted customers to sales and promotions that speak to their shopping habits.
One retailer that got the idea of personalization right is Macy’s. This retail giant blended personalization with omnichannel solutions, renewing its focus on engaging the customer in the store and online. Macy’s executives introduced digital catalogs designed to inform and inspire the customer through editorial content and new product offerings, creating a more interactive way to shop. Same-day shipping and the ability to shop online and pick up in-store round out some of the company’s omnichannel solutions.
Social media is quickly becoming retailers’ best friend. Even if a company doesn’t have a significant online presence — and it should — having a social media manager can help promote the brand and resolve customer disputes. Retailers such as Topshop use Twitter to engage customers, answer questions, and handle complaints. Because all of these interactions are within the view of the public, they become instant PR wins.
Innovative ideas can help maintain a retailer’s success as consumers become more focused on technology-based shopping. But without implementation, those great ideas are nothing more than just that. Retailers need to fight the tide of slow adoption and combine new ideas with mobile applications, personalization, and supply chain management technologies to promote long-term success and enhanced customer experiences.