Think about the last thing you bought. How important was technology to the purchase process? Perhaps you did some research online to compare specs or prices, before buying in store. But, more likely than not, a traditional brick and mortar store didn't factor into your decision at all. More and more purchases today are taking place online, or increasingly from directly within a retailer's mobile app. Let's think about how that changes the customer relationship and the role of the retailer in our societies.
When the web and mobile technologies first became accessible to retailers, they invested significant time and resources to drive consumers to these channels. Technology attempted to make online purchases as seamless as possible and to recreate the in-store experience online. Ironically, traditional retailers now face the opposite problem: attempting to drive traffic back into stores by providing an experience that surpasses the convenience and breadth of the online marketplace.
Online-only newcomers are beginning to provide purchase experiences that traditional retailers struggle to match. And as these channels make it easier to engage with and understand customers, digital-focused businesses are poised to continue to improve customer experience and outpace their physical counterparts. With greater consumer choice than ever, getting - and more importantly, keeping - customers is a vastly different challenge than in the days of big box retailers and shopping malls.
Harnessing the Power of Technology to Improve Retail
Retailers are beginning to embrace the differentiated advantages that online and in-store channels offer to provide unique, technology-enabled customer experiences. As they do so, they are tapping into the Internet of Things (IoT) to deliver more personalized and connected services. Let's look at how this strategy plays out online and in-store.
By now, we are familiar with the technologies that enable us to make purchases online or via mobile apps. These digital interfaces exchange data with retail inventory and point of sale systems via application programming interfaces (APIs) that provide retailers with an up-to-date view of operations. In many cases, consumers are now going straight to websites or apps to shop rather than comparison shopping in-store or across multiple sites (Amazon is a prime example of this).
The next wave of digital innovation in retail will be even more connected. Imagine you are shopping in a retailer's app with a saved profile of your name, address, and payment details. The retailer could incorporate biometric authentication into the app to secure these credentials. Via APIs and Single Sign-On (SSO), shoppers could use a registered biometric to quickly check available funds in their bank account without leaving the retailer's app, while at the same time maintaining the security of their accounts.
Additionally, data that consumers have opted to share with retailers could be used to prompt quick re-ordering of everyday items before consumers are even aware that they are running low. With biometrics or smart connected devices like the Amazon Alexa, the purchase experience is fast and frictionless.
Retailers with a physical presence are using the data they collect from consumers' purchase histories and mobile devices to draw shoppers back into stores. Consumers that agree to share data with retailers can receive proximity based deals to their devices when they are near participating retailers.
Connected technologies are transforming stores themselves. Beacons, sensors, and smart inventory management systems enable retailers to better display merchandise and manage their supply chains. In this way, retailers extend the digital experience into their store and maintain a consistent brand image.
Companies like Warby Parker and Amazon that started online have now expanded to physical stores while maintaining the technology-first experiences that are characteristic of their brands. Eyeglass retailer, Warby Parker, for example, recently released an app for the iPhone X that uses the phone's facial scanner to measure a consumer's face and recommend styles that will fit best. Shoppers can then order these styles to try on at home, or visit a Warby Parker retail location. These connected experiences allow brands to reach consumers in every channel.
How Omnichannel Commerce Is Built on APIs
By building strategies for both online and in-store, retailers are delivering omnichannel commerce. This entails creating consistent and connected experience across all consumer touchpoints: website, mobile app, and in-store experiences.
This omnichannel experience is built on APIs as the connecting thread that links physical investments like point of sale equipment and sensors in stores with backend technologies like supply chain management systems and front-end customer interfaces like digital shopping carts, mobile apps, and targeted marketing services.
As retailers invest more in building a connected and ongoing relationship with their customers, marketing and commerce will be transformed further. Many goods and services are now being provided through a subscription model, and as retailers have increasingly more data on their customers, they will soon be able to anticipate customer needs and proactively sell to them.
These innovations aren't just benefiting retailers. They are making our lives easier and giving us an enormous amount of choice and control over the products and services we use. As technology makes these products more intimate and integral to our lives, our ability to choose is more important than ever.
For more information on the role of APIs in retail, view our infographic, Retail APIs Enable Omnichannel Experiences or view the resources on our retail solutions page.
This blog is the third in a monthly IoT series. Learn more about how IoT will impact business by reading the first and second blogs.
