Three Ways Technology Is Helping Retailers Weather Rough Economic Waters
By Chap Achen, VP Product Strategy & Operations, Nextuple
As inflation rises and consumer behavior continues to shift, retailers face the challenge of staying ahead of the competition while maintaining profitability. Fortunately, advancements in technology have opened up a world of possibilities for retailers looking to survive and thrive in today’s economic climate. From improving back-end efficiencies to enhancing the omnichannel shopping experience, technology provides a wealth of opportunities for retailers to optimize their operations and stay ahead of the curve. In this article, we’ll explore the top three areas where retailers can leverage agile technology to navigate current market conditions and emerge stronger than ever.
Faster Isn’t Always Better
The lessons of the pandemic and evolving consumer expectations – a recent survey showed that 42% of consumers rated shipping speed their number one consideration when they decide which retailers to shop – have created an environment where retailers feel compelled to offer fastest delivery to all consumers. But fast shipping isn’t cheap. Retailers must balance the need to capture sales with the imperative of keeping each transaction profitable.
The truth is, not every SKU can be delivered quickly and profitably. Nor should they all be. Technology can help retailers make smarter decisions about when, which, and how to compete on delivery speed. While AI and Machine Learning can help retailers make these decisions quickly, it is also important for them to build technology environments that allow them to test and adjust criteria – and explore variables like split shipments, cost of labor, and carrier schedules.
Social Selling and Retail Search
It is becoming increasingly common for people to search for a product on their preferred search engine and make purchases according to their top priorities, like price, availability, or fast delivery. In order to secure those sales, retailers today need to provide search engines with relevant fulfillment, inventory, and location information. Otherwise, they may lose potential sales to competitors who have made that information readily available. In a challenging economic environment, no one is looking to lose out on sales.
In order to keep up with the ever-evolving demands of modern consumers, retailers need to build agile tech stacks that cater to current consumer behaviors. Nowadays, retail companies have to navigate through a digital landscape that is driven by social selling and search-based product discovery, which requires them to work in an ecosystem that they do not control. With the help of APIs, powered by microservices, retailers can make use of inventory, store availability, and promising data to stay competitive in sales environments outside their own omnichannel presence.
Change is Constant
In a challenging economy, retailers often make decisions based on consumer expectations and the desire to react quickly to them. In order to deliver a personalized omnichannel fulfillment experience profitably, retailers must approach the issue on an on-going, rather than a project, basis. A structured approach that is constantly evaluating business value and technology modernization in tandem is critical to responding quickly and differentiating the customer experience.
Today, retailers are able to evaluate their existing systems, and determine whether current capabilities can be extended, or whether it makes more sense to build new capabilities on top of their order management system through the addition of microservices that add new features. Often, retailers will find that a hybrid approach is in their best interest as they evaluate their business needs. In some cases, it may make sense to use an existing solution, rather than building the capability.
For example, one retailer may decide that order promising is an area where they have significant complexity and performance needs that a pre-packaged solution can’t fully address. Another may decide a SaaS solution that already exists will do the job, so they can focus their development efforts on other areas where they need to build their own solution. Today’s agile technology solutions align with retailers’ existing tech stacks for maximum flexibility ,and allow retailers’ dev ops teams to evaluate and test different approaches for maximum impact and profitability.
Adding Agility is Key
In challenging economic times, retailers must remain competitive to survive and thrive. Adapting to shifting consumer preferences and demands is paramount, but doing so profitably and efficiently is also critically important.
Capturing share of wallet when inflation is high and consumer confidence is low requires moving quickly to personalize the shopping experience and respond to shoppers’ demands and desires. At the same time, making changes in traditional monolithic order management systems can be slow and difficult, or worse, cause unintended consequences elsewhere in the system.
Microservices allow retailers to build upon their existing technology investments to keep up with trends, adapt to a changing landscape, and take a proactive and strategic approach to promising, fulfillment, and delivery. While they focus on providing exceptional customer experiences, both in-store and online, they are leveraging technology and data to personalize the shopping experience for the consumer, while also managing the backend to maximum profitability for each transaction. Agility, customer-centricity, and a commitment to continuous improvement are vital for retailers to maintain their competitive edge.
Read More: Introducing AI-Backed Sales Forecasting: 3 Tips to Align RevOps and Sales Ahead of Implementation
