The big three problems facing retailers moving digital

Long before the Covid-19 pandemic, the UK has seen a shift towards online commerce – with one report seen by The Guardian finding that by 2028, 53% of retail sales will take place online, compared to 19% in 2019. The generations that have grown up in the internet age are set to become the biggest spenders in the coming years and, coupled with the post Covid-19 “new normal”, will surely see these predictions exceeded.

So as a C level executive, what are the standout problems? Based on our client experience we have found the three questions below the most prevalent.

1. How do we re-structure our business to take advantage of the expanded online opportunity?

Taking up this opportunity to ‘re-structure’ and take a deep dive in the online landscape is a  key step for retailers and companies to stay abreast of the market.

E-Commerce, including mobile, has grown by 300% over the last few years, as stated by the Digital Marketing Institute. The transition to e-Commerce has become more and more accessible for companies; however, companies still struggle to take advantage of optimising their business online.

For companies to reap these online opportunities, retailers must improve the online experience for customers. Therefore, narrowing it down to the three areas to focus on to support and enhance your online platform or customers.

• Improving customers experience online
• Driving traffic to the website using social media
• Understanding your consumer market (data analytics).

Improving the customer experience online

Retailers now, must compete against big competitors such as Amazon and other marketplaces to improve their online service to provide customers with the same in-store experience online.

We are narrowing this down to a few valuable methods to improve retailers’ online growth:

Chatbot

Similar to an instore experience, the ability to speak to sales associates is a viable option to have online, features of an online chatbot to enable customers to talk to sales associates to help them online. Retailers can utilise this as an option on their website or even using Facebook Chat as an option as a platform for customer service.

Burberry display an excellent method of Chatbot functionality as described here by Clustaar, where the Customer Service agent appears on chat to support customer queries to locate stores, products and even booking uber rides to the Burberry Maker’s House brand exhibition in 2016.  Consequently, digitalising  in-store experiences where consumers can talk to a virtual assistants in the comfort of their own home.

Quick Buy – One-click buying

An advantage online stores have for customers is the option of allowing customers to purchase items via ‘speedy check-out’, making it easier and quicker for customers to purchase.

Amazon game-changing ‘1-click’ ordering played a considerable part in their success as customers could buy an item in the matter of a few seconds.

A study shows more and more retailers are revising this on their sites to make the online shopping experience more accessible and easier for customers.

Driving traffic to the website

How do retailers distinguish themselves to entice customers clicking on their site other than their competitors?

Improve the retailer’s position on SERP (search engine results page), using solutions such as Google AdWords to optimise SERP. Consequently, by improving your chances to be on the first page of Google search helps to drive more clicks on to the website.

In addition to SERP, retailers now are gathering their customer’s email addresses for online receipts, and an advantage of this is creating a mailing list of your customers to send promotions, discounts and product/service launches. Retailers like New Look give their customers options to opt-in news and offers, beneficial for both retailer and consumers, by opting in it allows retailers to send promotions, discounts codes and vouchers to customers.

Other than emails, there are other ways to reach out to your customers and potential customers. More than half of the world uses social media around 4.57 billion people, and that is a vast audience to target on Social media. In 2019, $89 billion was spent on adverts via Social Media.  Instagram now even has the option for consumers to purchase via the app.

Using C/4 HANA solutions such as SAP Commerce, SAP Cloud for Sales, SAP Marketing enables companies to support online activity and view customer habits in real-time as well as being able to react to the consumer market.

2. Are my supply chain and operations scalable and fit for purpose if 25% of my business is now online?

Understanding your supply chain operations is vital to ensure all critical areas are covered online. As online shopping increases so does the consumer’s expectation on availability and delivery of goods. Amazon’s Prime delivery options of One Day, Next Day and Same Day have proved vastly popular, with faster and faster delivery times expected across the sector. However there aren’t many retailers with the reach of Amazon, having more than 40 fulfilment centres in the EU alone.

This leads us to question what retailers can do with their current supply chain to meet this demand, for faster delivery times, which as a recent survey highlights, 88% of people will pay more for same-day or faster delivery.

A growing trend in the US and Australia has seen retailers using their existing locations as fulfilment centres. The US example is interesting here as it focuses on Target remodelling up to 1000 of its stores to mini fulfilment centres. As Target have a store within 10 miles of ¾ of American consumers according to spokesperson Jill Lewis, this would enable Target to reach millions of consumers with a same-day delivery offering – something not seen outside of Amazon.

If taken up, this trend could solve not only the issue of repurposing physical assets which we will touch on below, but also how retailers can expand their supply chain to match consumer needs. Mini fulfilment centres have the potential to decrease time-to-door but also increase the amount of storage available to the retailer, which can’t be overlooked when dealing with increased online sales.

3. What do our physical stores become to be part of the new customer experience?

Physical Stores

With an ever-increasing percentage of retail sales taking place online, how can retails repurpose their physical store assets? One large retailer looking to tackle this is ALDI, who have announced in a recent article they will trial a click and collect system at 15 stores, starting with Loughborough. Aldi have long been behind the curve selling limited non-grocery items online, however they are seizing the opportunity presented by Covid-19 to play catch up by repurposing some stores and allowing customers to order online, drive to their stores and have items delivered direct to their vehicle.

A Capgemini blog post has highlighted how various retailers plan to leverage technology to diversify their services, including one prudent example of Amazon opening Amazon Go stores across the UK which will operate without checkouts, showcasing an innovative way to remove human contact from the shopping experience. Whilst few retailers have the resources of Amazon, this will serve as a timely introduction of technology that could be used in further retail stores across the country.

A solution being trialled by many retailers, restaurants and leisure facilities is queue technology. A Capgemini blog on Covid-19 lessons for the retail customer experience looks how Padella have long been using a virtual queue due to space restrictions in its London restaurant, whilst other retailers have been playing catchup in this space, both ASDA and ALDI have looked at systems to encourage social distanced shopping and introducing traffic light systems to highlight the current footfall of their stores.

What next?

You understand the challenges that come with moving digital, but what technological solutions are out there and who can help? People are well versed in the traditional SAP ERP systems; however, Gartner have named SAP’s CX offering as a Leader in their Magic Quadrant for Digital Commerce. SAP’s CX suite includes offerings for Commerce, Marketing, Sales, Service and Data. Commerce Cloud is SAP’s core commerce product, offering:

• Integrations to S/4HANA, SAP ERP solutions, SAP CX suite
• SmartEdit, an easy to use graphical web editor
• Multi catalog system, allowing different product sets for varying locations of sale

Discover more about the product and Capgemini’s capability here.

SAP Upscale Commerce is a brand-new SaaS offering from SAP, designed with rapid deployment and low cost of ownership in mind. Upscale is ideal for smaller retailers, or those working with fast moving consumer goods, looking to set up pop-up stores for the launch of a new product or range. Capgemini have recently developed an Upscale Commerce instance; you can read more about upscale here.

These are just two of SAP’s offerings in the CX space, if you aren’t sure which way to go, or would like more information – Capgemini were recently named as a leader in Gartner’s Magic Quadrant for CRM and CX – to see what we can offer in the CX space including our specialised product accelerators, take a look here.

Authors

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Joseph Hale

Joseph is a consultant within the Customer Engagement Team of our SAP practice. Experienced in SAP CRM and SAP CX, Joseph is interested in bringing value to businesses by improving their customer experience.

Davina Patel

SAP Customer Service and Sales Consultant within the Customer Engagement Team at Capgemini. Certified in Commerce

Davina is passionate about utilising C4 HANA solutions to drive clients business processes for them to improve their customer relationships.