Omni-Channel is Dead and The Future of Retail Lies in the Internet of Things
Editors note: this article ran a few weeks ago, and became one of our more controversial and socially shared articles so far this year. We are re-featuring it for that reason. Well worth reading!
Omni-Channel is Dead: The Future of Retail Lies in the Internet of Things
We’ve been talking about omni-channel for what feels like more than a decade. At this point, if you haven’t reinforced an omni-channel strategy, your organization is more than likely struggling to keep up. Intelligent retailers are very apt to quickly implement technological breakthroughs that are revolutionizing the way that consumers and businesses interact – so what’s the next big thing?
The Internet of Things goes Retail
The volume of potential connected devices in IoT is now measured in billions, and the implications are enormous. But what does this technological advancement mean for retailers, and how does it work? It’s a big theory, but to put it simply: ultimately, trillions of devices will be (and are currently being) connected – everything from point of sales systems to in-store sensors. The products and solutions in the Internet of Things can vary tremendously, but the bottom line is that devices with this integrated technology will let users know what they’re doing and what’s going on around them. Businesses can then pull data from these devices that can be analyzed to provide invaluable insights about consumer activity and behavior. This can provide vast efficiencies in the way retailers work.
Today’s savvy, always-connected consumer requires convenience, product availability, and personalized communications. This reality will motivate retailers to embrace numerous IoT technologies in the coming years. It’s the most logical next step.
The Big Problem (and Solution) is Big Data
From beacons to wireless sensing and tracking, connected devices can – and will – undoubtedly help drive a superior shopping experience. But, this extremely precise and dynamic new way of retailing is not possible without a system in the back office and a platform for store-level communication. To be of any use, the data from the many consumer triggers and actions need to be collected and synchronized. To do this successfully, a big data platform is essential to ingest the data, and then use that data to create precise actionable insights. An effective big data system should have the ability to organize and target consumers to help save time and resources – largely automating countless processes.
Technology is no longer a hindrance when it comes to retail. A solid IoT plan opens the doors to detailed analytics regarding what’s really happening, and what consumers want to happen, at store level. The biggest challenge is big data.
Big data today’s for retailers goes well beyond just counting the number of persons, what retailers need is the combination of the number of customers with the POS sales information, marketing information and activities, average $ transaction, checkout lane length, average customers time spend in store, conversion rate, repeat visit. This data is needed at the enterprise level to understand the customers behaviors.
However, there is a very large gap between the theory and the utilization of this data to allow sales improvements.
The key to using big data successfully is not to offer the same data to everyone in the company. What a store manager needs to know to improve the efficiency of his stores is entirely different than the metris needed by the company CEO or COO.
The main reson big data is not in use by a lot of retailers today is the fact that the data provided to the users is the delay between the time when the data is generated versus when it is actually used.
There is always a demand for high level trend analysis which looks at previous days, weeks, months and years. However, retailers need to start using big data information on a daily basis if they want to develop a customer focus that is really agile. This will allow the retailers to provide a better shopping experience but also will predict in details what could probably happen and to organize accordingly.
About the Author
Marc Janssens is executive vice president of the Retail and Platform Products businesses Fujitsu America. In this position, Mr. Janssens is responsible for driving the growth and profitability of our retail business, delivering the full spectrum of the retail portfolio to clients in this industry. He also leads the company’s platform products business including enterprise, mobile and software products as well as Fujitsu solutions. Mr. Janssens’ deep experience in the retail sector, coupled with his vast, working knowledge of the Fujitsu product portfolio and operations, make him well-suited for this role.
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