Retailers have known for years that to stay ahead of the game, they must improve their technological capabilities. However, some retailers have adapted to this change better than others. In this Q&A with RetailTechNews, Matt Sebek (pictured below), VP of digital, World Wide Technology, explains why this is, and what technologies can help retailers gain a competitive edge.

RetailTechNews: Can you briefly explain what WWT do?

Matt Sebek: WWT is a global technology solution provider, serving the technology needs of large public and private organisations around the globe, including many of the world’s best-known brands.

With an integrated portfolio across customer experience, wireless, mobility, data analytics, and systems integration, WWT is uniquely positioned to lead top B2C and B2B initiatives across digital and physical channels.

With an increasing amount of commerce taking place online, how is the role of the brick-and-mortar store going to change?

Most large retailers now have an e-commerce function as well as physical shops. And, as more business is now shifting online, they need to quickly determine what role physical stores can play in their engagement strategies.

First and foremost, this involves acknowledging that the physical space is no longer an exclusive marketplace to service transactions. However, stores can still be leveraged as experiential showrooms, distribution centres, and 'buy online, pickup in-store' locations, as the demand on same-day delivery services increases beyond supply. Additionally, these physical spaces can be leveraged for heightened services such as expert opinions, consultation, and demonstration of next-gen technology to make the physical shopping experience something convenient but fun: for instance, by using virtual reality or augmented reality experiences to try out a new wardrobe or a new kitchen.

What sort of technologies can retailers be adopting to help them adjust to these changes?

In tech, data is still a significant asset. One of the IoT applications retailers can use is a network of Virtual Bluetooth Low Energy (VBLE) beacons. These connect into the WiFi network and can provide granular anonymised location data on each customer using the network in-store.

Matt Sebek, VP of Digital, World Wide Technology

The precision of this location data means that retailers can tell when customers are standing next to a specific product, and have tailored offers and product information sent to their devices when in the vicinity.

It also means that retailers can track foot traffic precisely around the shop to work out where people go, which products they visit, and what routes they take. They can get insight into how long people stay and, in particular, how many people abandon their products when they get to the checkout because the queue is too long. Managers can then adjust store layout based on this data to make different shopping routes more convenient and help shoppers find more items they might be interested in. This is particularly useful for grocery shops and supermarkets, where customers will have a diverse list of items they need to pick up.

If a high proportion of customers are abandoning their items before checkout, retailers may look to technology that can move the point of sale onto customer’s devices, through apps, to cut out the checkout entirely. This requires a different kind of IoT device with sensors to pick up and track which items customers have picked up in order to calculate their bill.

But really, the most important advantage of physical over online retail is the human touch. Retailers can use data insights and company-specific apps to send detailed customer descriptions to floor staff, so that they can recognise customers and have a detailed understanding of their needs.

For instance, let’s say a customer has suddenly started buying a range of tiling and plumbing equipment from a hardware store and shown an interest in taps and shower heads. Floor staff can have an alert sent to their phones that this customer is probably redoing their bathroom, and might need some help choosing the right products.

On the other hand, if another customer comes into that branch for the first time, but has a purchasing history with the retailer showing that he routinely buys a similar range of hardware in different stores, staff can be alerted that he is probably a professional who knows what they want to buy and doesn’t need as much help. This customer may instead be interested in picking up items in-store, but paying for them online through a specialised app.

What are the biggest challenges preventing retailers from successful digital transformation?

One of the major challenges to this kind of digital transformation is really seeing the need for it. It’s difficult to think in the long term and predict how much bigger a threat online will become. As customers get more comfortable with e-commerce, more and more transactions will shift online; and this could leave many retailers on the back foot.

At the moment, the ratio of physical to online sales is roughly 80:20 for most stores, so retailers allocate funds according to a similar ratio. But this investment in stores should take a more tech-enabled approach, to link up the online and offline experiences and make the most of physical shop spaces in a way that complements the e-commerce function.

Another challenge is using data wisely. Retailers already gather large amounts of data on their customers, but this is often kept in siloed locations and not put to good use. There is also the issue of security. Every connected device you use is a potential site for cyber-attack. So, IoT devices need to be protected, with security policies regularly updated, as they would be for a computer or mobile, and implemented with the appropriate air gaps so that they do not have access to sensitive data.

Are retailers effectively handling the tying together of their online and offline businesses?  

The competition from big tech giants like Amazon means retailers face a big challenge – to stay competitive, they need to be as good as Amazon, or better. We’re already seeing retailers that failed to enact a successful digital strategy fall by the wayside – Toys R Us being the latest example. Many other retailers that are slow to digitally transform might come into trouble in the future.

But others are taking leaps and bounds. Ted Baker has experienced huge sales growth, particularly following trials of a payment app where customers can order out-of-stock items from their phone, and the Co-Op has also announced a frictionless payment system for its shops.

Retailers have been facing a tough time in this rapidly changing modern landscape. They need to ensure that their investment is targeted to improve revenue in a way that looks to the future and makes the most of physical space.This content was originally published in RetailTechNews.