The Biggest (Overlooked) Tech Challenges for Retailers in 2015

Responding to changing consumer expectations, price-sensitivity exacerbated by the great recession, and increasingly tech-savvy shoppers has forced broad and deep adoption of new technologies by retailers. Everyone knows that.

Top retail technology challenges in 2015Most retailers by now have developed strategies for addressing mobile payments, personalization, beacons, omnichannel inventory management, big data analytics, showrooming, webrooming, and buy online / pick up in store—even if the processes and supporting technologies still sometimes have a few rough edges.

Early adopters are exploring strategies for incorporating the Internet of Things (IoT), 3D printing, virtual assistants, and same-day delivery.

A new report from Retail TouchPoints—the 2015 Outlook Guide: What are the greater challenges facing retailers in 2015? —provides outstanding guidance from 15 leading industry analysts, consultants, and researchers on how retailers can most profitably respond to key technological and cultural trends in the coming year.

Much of the report focuses on the customer-facing technologies noted above, as well as other “sexy” topics like customer experience optimization, vehicular communications systems (in-car technologies), wearables, augmented reality, and intelligent surfaces.

Yet as important as those highly-visible customer-facing technologies are, retailers will struggle to profitably meet the needs of today’s (and tomorrow’s) shoppers without vital if less visible advances in back-office support technologies as well. Here are four key trends from the report that may be less obvious but are no less crucial for retail success than the customer-facing issues noted above.

“Customer experience” doesn’t only matter to customers.

Of course the buying experience matters to shoppers—a lot. As Aberdeen Group research director Omer Minkara writes in the Retail TouchPoints report, “ensuring consistency and personalization of their in-store and digital interactions (consumers)…is the top challenge faced by retail firms.”

But it’s critical for retailers to consider the internal customer (employee) experience as well. KPMG’s Mark Larson notes later in the report that supporting and optimizing all of the advanced customer-facing technologies coming online requires talent. And winning the war for talent requires, among other factors, effective and user-friendly technology enabling employees to submit requests to shared services groups from IT to facilities to HR.

Focusing on intuitive and attractive design for internal systems is often overlooked but imperative for reducing internal service delivery costs and increasing employee satisfaction. Employees, after all, are consumers too, and bring expectations of frictionless online experiences with them to the job. Addressing these expectations through customer-centric design of internal systems and processes is vital to attracting and retaining top talent.

In-store tech HAS to work—so it has to be effectively supported.

Beacons, mobile payment systems and other consumer technologies only serve the needs of customers when they function properly. Having a key technology fail is worse for customer experience than not having the technology in place at all.

To keep their advanced systems running smoothly, retailers should evaluate enterprise request management (ERM) portals for addressing non-urgent needs, and virtual war room collaboration software for coordinating team efforts to resolve large, urgent issues and outages quickly.

Cutting-edge apps have to talk to legacy platforms.

Bryan Amaral of Clientricity writes in the outlook report that “providing a 360-degree view of the customer…is comprised of data from POS, product inventory, merchandising, credit marketing and e-Commerce. Integrating back-office BI, campaign management and digital marketing tools with in-store clienteling, loyalty and product recommendation solutions can transform this underlying data into actionable knowledge.”

More broadly, much of that new mobile and in-store technology needs to communicate with core legacy back-end management and control systems, in many cases even with data or applications still residing on mainframes. While many of those core systems may be replaced eventually, retailers aren’t going to rip and replace these vital underlying platforms all at once; it’s simply not practical.

Instead, retailers need to adopt flexible, scalable service integration strategies to link modern web-based, in-store and mobile systems of engagement to in-place systems of record. The customer-facing apps may be revolutionary, but the back-end systems approach should be evolutionary, and future-proofed by investing in application integration and workflow automation technology that works with what’s in place today, as well as whatever will be in place tomorrow.

Security has to improve.

Well-publicized data breaches have damaged the reputations of major retailers and frightened consumers. Mobile payment technology offers greater speed and convenience for shoppers and retailers alike, yet as Pam Goodfellow of Prosper Insights & Analytics notes in the outlook report, more than 40% of consumers say they are “not at all” or “not very” comfortable with m-payments. “Time will tell how rapidly shoppers will actually adopt mobile payment as part of the buying process. A resurgence of trust in payment security would probably go a long way with consumers, though.”

Payment and data security are complex topics and must be addressed on multiple fronts, but not every fix is complicated. For example, recent research indicates that across industries, 24% of ex-employees can still access corporate data. A fix like automating employee offboarding using an ERM system can improve both data security and enterprise process efficiency.

Embracing mobile and other customer-facing technologies is vital for retailers to profitably meet the increasingly sophisticated demands of shoppers. But equally as important is implementing technology and process changes internally in order to support an outstanding customer experience, attract and retain key talent, and improve payment and data security.

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