How can retail tech help meet customer expectations on and offline? | First Friday Q&A

As online and offline channels begin to stabilize, retailers must focus on store experience and reducing frictions, says First Friday Partner Gita North.

With nearly 30 years of retail experience, Gita North is a Partner at First Friday, leading the areas of Change Management and Consulting. She explains that, going forward, retailers should examine how they can better use stores to engage customers and use them as stock and selling points. On the other hand, they’ll also need to tap into the returns issue to really make business profitable. Here’s her Q&A with Nextail.

See more insights from “The Big Debate” roundtable of experts including Jan Heere, ex-CEO Studio Moderna; Charlotte Kula-Przezwanski, Partner at Columbus Consulting, and more.

How will retail look in 3 year’s time versus today?

I don’t think retail is going to be massively different in three years. What I hear from customers is that we’re almost getting to a stage where we’re beyond digital transformation and moving toward a post digital transformation phase.

E-commerce sales are stabilizing for most companies now and they’re not going to see the same growth. Omnichannel retailers really have to focus on that omni journey, so bringing digitization into the store and optimizing their stock across all their channels to get to the stage where fulfillment is actually profitable – for most organizations, it actually isn’t yet.

For brick and mortar stores, the experience side will become more important, because retailers are trying to draw more shoppers in and encourage them to spend more time there. Digitizing the store with things like magic mirrors will also make the store experience more interesting.

How much retail businesses change to future proof for 2025?

Retailers will need to look at the customer journey and engage with customers to better understand them so that their offering better matches their expectations and desires.

Retailers should also consider how they can use stores as stock points, as well as selling points. For a lot of luxury brands, in which product value is high, this is becoming increasingly important. I think we are still on that journey in Europe but it will follow the US, especially if footfall in stores remains low and you have got to work out what to do with people in stores as well. Marketplace orders could also be fulfilled from stores.

Also key will be making sure that stores have the right amount of stock to fulfill both e-commerce and store demand, so understanding where the sale online is going to come from to a post code level, as well as from which product areas will grow in importance.

Retailers must be increasingly focused on execution – reducing those fulfillment costs, while still providing a really personalized journey and seamless customer experience.

What role will technology play in retail transformation?

Technology like magic mirrors can be used to clue retailers into information they didn’t have before that can improve both the customer experience, improve sales, and reduce returns. For example, they can help retailers capture information from the changing room to understand why a sale may not have happened. Was it the wrong size? Was the customer unhappy with the quality? These responses can be fed into other sales channels. Similarly, retailers can pick up sizing information by knowing which customers are ordering multiple sizes online and which ones they return.

Powerful brands can take advantage of the Metaverse. Nike, Versace and Prada have all started investing in the Metaverse selling virtual products which bring in additional streams of revenue, but also signal trends and help predict demand for the physical product. Some of the luxury brands have already started doing product customizations.

Brands and retailers at all price points are also beginning to invest in the circular economy and adapting their systems to cope with rentals, as well as sales. As well as from an environmental perspective this has particular appeal among younger consumers for whom the experience matters more than the product.

How are recent unexpected disruptions changing retail priorities?

There are supply chain issues everywhere due to the pandemic and the war in Ukraine. Demand is outstripping supply for a lot of our clients because of this. So I think that a lot of them are focusing on that. How do they prevent disappointment and missed sales opportunities that negatively impact the customer experience?

Retailers are looking at the speed of returns to improve stock availability and I think that a lot of companies will be looking at manufacturing closer to home. Many were nearshoring anyway because of the long lead time and over-reliance on countries like China who continue to have lockdowns to prevent Covid will accelerate the drive towards supply chain resilience.

More insights from “The Big Debate” roundtable of experts including Charlotte Kula-Przezwanski, Partner at Columbus Consulting, and more.