The ease of shopping has lead to rising customer expectations. David Gonzalez, Head of Big Data Analytics & AI at Vodafone Business looks at the changing nature of retail stores, particularly in regards to how data analytics will underpin the future success of physical stores.
Nobody would question that consumer expectations of the retail store are changing. With Internet sales now responsible for 20% of all retail sales in the UK (ONS Retail Sales, Great Britain, March 2019), physical stores must offer a service experience that both complements and integrates with the world of e-commerce.
For consumers this is not just about the choice of buying online or in store, but also about the effectiveness of the hybrid omni-channel experience. New models, such as BORIS – (buy online, return in store) or click and collect, provide consumers with a richer offer. At the same time the traditional reasons to shop in-store still apply, i.e. the desire for personal attention and advice, or physically being able to touch, feel and try out the product.
In short, customers are demanding more from their retail experience.
Technology and customer experience
When retailers have a customer in-store, the quality and breadth of the services they are able to deliver will contribute to how much the customer will spend. At a time when skilled and experienced labour is in high demand, some of that positive experience can be enabled by technology. For example, a returning customer could be recognised via their mobile app, meaning that they automatically access store Wi-Fi or are able to make use of AR or VR technology to speak with their friends about items they are interested in.
Fundamentally, the goal is to use technology to help create environments that increase dwell time, boost experience and create happy customers. These new retail experiences require an agile and effective communications network to deliver on the promise that technology holds for retail.
Until recently, networks for retail simply supported point of sales terminals, inventory management and back office systems. Today the network needs to be always available to support varied data heavy applications to continually surprise and delight customers.
Underpinned by the network
Retail networks have traditionally been built from expensive fixed connections to each store in order to confidently provide secure capacity. Today the choices are becoming much wider and include connections made over public networks such as Internet, 4G (and soon 5G) mobile as well as private networks using technologies such as MPLS.
Hybrid networks are attractive, as they allow much more flexibility for managing multiple store types and locations. Typically this agility has come at a price in terms of additional administrative overhead. Now, however, they can be managed as a single network with a single security policy, and are able to prioritise different traffic types over different links.
This will optimise network resources, with an intelligent application aware network routing non-critical applications through low-cost broadband Internet while business critical applications use reliable MPLS based connections to ensure consistent service levels, and reliability. Meanwhile, in a cloud based world, multilayer security has only grown in importance for businesses.
Next generation retailers need next generation networks
The latest networks introduce a new level of control and flexibility for retail businesses. They are software based and this Software Defined Networking (SDN) approach offers benefits and economies by creating a dynamic environment that can respond to changes in demand by altering priorities, providing remote self-service management or even increasing bandwidth in real time. In the future, these capabilities will happen automatically through AI and ML technology, increasing efficiency further.
This style of network can respond to peak customer demand, whether event driven or seasonal, without comprising the customer journey. That might involve researching a product through a virtual in-store demonstration, sharing a new purchase through social media, or at the ‘click and collect’ desk where a customer’s purchase is waiting on the counter as a result of their presence in store being recognised from their mobile app as soon as they enter.
Enabling this level of customer service is critical to success in a market where customers are only too willing to vote with their feet or with a click of their mouse and move to a competitor. With SDN, the network is ready to step-up and an always on, fundamental part of the retail experience, powering the technologies that will keep customers coming through the door.
By David Gonzalez
Head of Big Data Analytics & AI
Vodafone Business