We all know that the speed of technology and innovation has been a blessing for small and midsize retailers – and it couldn’t happen at a better time. Long-established retailers – such as Macy’s, Sears, Kmart, JCPenney, The Limited, and CVS – are closing their brick-and-mortar store locations to toughen their stance against increased competition from online merchants and fast changing shoppers. Meanwhile, billions of consumers worldwide are favoring greater speed and ease in the buying experience, putting retailers saddled with legacy technologies at risk.
Although traditional retailers are under siege, small and midsize retailers are emboldened by the promise of integrating the digital world with the physical store. In fact, the IDC industry brief “Retail: Small and Midsize Retailers Can Drive Revenue, Efficiency, and Loyalty with Smart Adoption of Advanced Technology,” sponsored by SAP, revealed that 80% of retail firms have a positive view of the changing competitive landscape. Instead of perceiving every shift as a risk, these retailers see an opportunity for successful innovation and reinvention.
This sentiment is not without merit. Because small and midsize retailers cannot compete on price and endless aisles of product choice, they are often hyper-focused on attracting new consumers and building long-lasting relationships. And this means that they must build a presence – digital and physical – everywhere shoppers are.
Driving fully responsive storefronts now and in the future
A growing segment of small and midsize retailers is rapidly gaining experience and confidence in digital transformation. According to the IDC report, 60% have already transformed internal operations with the Internet. Such experiences have led to a better understanding of how to invest and implement technology and evolve the workplace to embrace new opportunities.
Retail firms are now able to use digital technology to leverage insights like never before. For example, the integration of disparate systems and anytime, anywhere access to data on any mobile device are driving new models for consumer engagement and omnichannel commerce. This connected, mobile approach not only lowers total cost of ownership and accelerates the buying process, but also increases the intelligence and operational flexibility needed to predict emerging demands and evolve processes in response.
Cloud solutions are also emerging as an easier, faster, cheaper, and more flexible way for retailers to adapt operational capabilities, product inventory, and complementary services to meet expectations throughout the shopping experience. Without investing in more infrastructure, businesses can leverage the latest technology and exchange data company-wide. Take, for example, a retailer that uses mobile apps, beacons, and social tools to detect a consumer’s presence in a store or e-commerce site. Marketers and merchandisers can then take the information captured from the nuances of consumer shopping behavior and interactions to identify trends, gain insights, and make actionable, outcome-based decisions to personalize e-commerce and in-store experiences to keep customers engaged.
Building a clear digital path to small and midsize retail success
While many retailers are updating legacy IT landscapes with the latest technology, some are shaking up the competition with new products, categories, store, and service concepts — from home furniture to athleisure wear and ready-to-prepare meal subscriptions. However, the greater challenge is using technology to attract new consumers and strengthen existing relationships.
As small and midsize retailers push deeper into their digital transformation to reinvent their business model, they must strike a balance between innovation and consumer expectations. If the shopping experience does not meet expectations or becomes too complex, consumers will run to a competitor. The key is finding that middle ground where consumers can shop faster and smarter.
To learn how your business can better prepare for the digital economy, check out IDC’s industry brief, “Retail: Small and Midsize Retailers Can Drive Revenue, Efficiency, and Loyalty with Smart Adoption of Advanced Technology,” sponsored by SAP.
Blog originally published on the Digitalist Magazine.