Walk into any retail store today and you may notice a few changes. Digital screens flash the latest products as you enter. Interactive demos are propped up by cool tech, and touchscreen self-serve kiosks bid you farewell on your way out.
The trend towards digitization is rising. For customers this means something new and exciting with every visit to the store. But for retailers, it presents an ongoing challenge of keep up with the pace of change.
Gale Blank, VP IT at Holt Renfrew faces this challenge every day. As one of Canada’s premier luxury brand retailers, the company is focused improving customer experiences with the help of innovative technology. This trend is industry-wide. Even mass service retailers like Walmart and Loblaws are adopting technology with IoT and machine learning capabilities to provide more personalized experiences.
Gale shared with us a few key consumer trends in the luxury retail market and what technologies she sees at the forefront of the change.
Customer experience in luxury retail paramount
Luxury retailers like Holt Renfrew face a unique set of challenges. “The higher in the margin you are as a retailer, the more personalized services and experience you are expected to deliver,” says Gale.
These days, customers expect to have the ability to interact with a retailer anytime, anywhere. This omnichannel model requires retailers to provide a seamless customer journey regardless of whether customers choose to engage online, offline, or both.
Another challenge is getting a handle on customer preferences. “In luxury retail, there is an expectation that we will provide purchase suggestions and help with decision-making,” says Gale. Many shoppers want the benefit of a personalized service but aren’t keen to give up too much of their personal information, which can make this difficult.
As far as in-store shopping goes, technology is reinventing the experience. Between pop-up shows, LED displays and educational selling, the digitization of content will only continue to increase. “At the end of the day, the differentiator for luxury retailers will be around how they create unique experiences. Our objective is to put the fun into shopping and take the drudgery out,” says Gale.
Technology needs for retailers
Behind each new technology lies a sophisticated network of software, hardware and IoT architecture. New capabilities in AI, machine learning, sensors and sophisticated networks to manage Big Data are just some of the technologies retailers are using.
Where does a retailer start in using these technologies? Gale suggests two key aspects of the business that retailers should focus on digitizing to stay ahead of the competition: customer information management and inventory management.
1) Customer information management. Having rich customer data enables retailers to provide highly personalized experiences. By understanding the shopper’s journey through the store and preferences, the retailer can serve them better with each interaction. This requires a sophisticated digital network from which to manage all sorts of Big Data: customer appointments, preferences and interactions.
“Knowing where your customers are creates a huge opportunity,” says Gale. Stores are now equipped with networks that report how long customers waited in line, where they spent the most time shopping, or if a customer looks to be aimlessly wandering. The network can alert an associate to greet a wandering customer, or which products to offer that will complement a customer’s particular taste.
2) Inventory management. Knowledge of inventory location is a critical factor for business success. “Especially in the luxury market, knowing where your product is with 100% accuracy is the holy grail for retailers,” says Gale.
With high quality sensors applied to each product, retailers can get very close to reaching this level of accuracy. While RFID tags are often the go-to solution, there is still room for improved tracking technologies.
Underlying both of these business aspects is a massive shift from hardware to software-based solutions. Holt Renfrew is well on their way in this shift: the company is in the process of reducing in-store cabling by 90%, in favour of a more agile, sophisticated digital network.
“The real play in adding this technology is to create a digital infrastructure on which we can bring in shiny objects, and replace them fast,” says Gale. As the fast-paced world of fashion continues to change, the impact of IoT on the retail industry shows no signs of slowing down.
Interested in learning more about how IoT is impacting the retail industry?
If you are a designer or developer, join us for a Design Thinking workshop with Holt Renfrew in Toronto on October 18. Hear more from Gale on current challenges and opportunities in the industry and participate in a Design Thinking workshop to come up with relevant solutions. Visit the event page to register.