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Why Tech Will Be Crucial to Separating Retail’s Winners and Losers

Join Theory, Google, H&M, McKinsey, Foot Locker, Lafayette 148, LL Bean, the Retail Prophet and more at Sourcing Journal’s Virtual Sourcing Summit, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain, Oct 14 & 15.

Technology is empowering retailers to close the gap between point of inspiration and point of purchase, raising the likelihood of turning a visitor into a buyer.

With shorter consumer attention spans today, speed can mean the difference between attracting or losing shoppers’ business, according to Sourcing Journal’s “Tech 2020” report. In this environment, the retailers that capitalize on the opportunities to quickly move customers down the funnel through shoppable content such as social media and live-streamed video are succeeding at earning conversions before potential customers get distracted. Stressing the need for entertaining engagement, CB Insights even predicts that brands will hire e-game developers to help boost their digital content.

Given that retailers now need even more flexibility to be able to creatively serve customers across multiple touchpoints and channels, one of the models gaining traction is headless commerce. Retailers using headless commerce decouple the front and back ends of their digital stores, allowing their teams to make adjustments such as marketing changes or promotions without affecting underlying technology.

“One of the benefits of headless commerce is how it opens up a world of new ways for customers to purchase through a variety of experiences,” said Darin Archer, chief strategy officer for Elastic Path. “The most effective way to do this is to remove any silos between marketing and commerce teams so they can work effectively together to strategize and build those high-converting experiences.”

Speed along with the convenience of services is also determining factors for customer loyalty. This includes the ease of cross-channel experiences such as buy online, pick-up in store (BOPIS). According to Rakuten Ready, consumers who wait two minutes or less to pick up their order were four times more apt to shop with a retailer again than those who had to wait longer. Retailers that have streamlined this service are differentiated, as the average wait time hovers around the 3:30 mark.

Robots and other technologies are also enabling retailers to be nimbler in the last mile, getting products from fulfillment centers to consumers’ doors in less time. Similarly, RFID is streamlining processes including inventory counts, making certain logistical tasks more efficient and less costly. For instance, retailer Reiss leveraged RFID technology from Detego to conduct stock checks in just 35 minutes, leading to a 4 percent boost in sales. Reiss is far from alone, with a 2018 survey from Auburn University’s RFID Lab finding that 70 percent of the top fashion companies have incorporated RFID into their supply chains.

Even with the rise of e-commerce, brick and mortar is not going away, but consumers have elevated expectations of the in-store environment. At the store level, technology is unlocking opportunities for more retail theater through immersive activations, such as augmented and virtual reality experiences.

Amid other innovations, personalization capabilities are poised to become more sophisticated.

As everyday devices become smarter and connected, companies have more consumer information available to them. However, it will take technology to enable merchants’ teams to better leverage the data they have. Analytics can offer clues about who a brand’s target shopper is, including her behaviors and style preferences, which can then be leveraged to make more informed planning decisions such as size allocation or which trends to develop. Per estimates from Global Market Insights, the market value of retail analytics is expected to surpass $20 billion by 2026.

“With consumers more readily giving retailers demand signals that show what they’re looking for, retailers need to be able to listen to and analyze these signals—and deliver what customers want, when they want it,” said Kathy Leake, CEO of trend platform Trendalytics.

Learn more about how technology is driving better fit, fewer returns, smoother transactions, increased sustainability and additional business models. Download Sourcing Journal’s Tech 2020 report here.

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