While retailers recognize the importance of this reality their preparedness to offer it is low. EKN’s research and peer forum discussions from 2013 reveal retail’s dichotomous existence:
• 97% of brick-and-mortar retailers believe stores are their strongest differentiator against online retailers; 70% state they provide a store experience better than their competitors. Yet, in-store sales grew a meager 2.3% year-on-year on Thanksgiving weekend in 2013 while e-commerce sales went up 17.3%.
• Retailers rate customer insights as their #1 business priority in 2013, but only 20% consider themselves as being able to leverage customer analytics better than competitors; and 60% are only able to conduct basic analysis and reporting.
• Retail CIOs are tasked with driving fundamentally transformational programs and yet they spend 58% of their IT budget on keeping the lights on (maintaining existing systems).
• The consumerization of IT (the impact of employees and customers using personal mobile devices and consumerized Web services) is recognized as a huge opportunity to reinvigorate customer engagement and store operations.
For years the industry has spoken of the concept of integrated retail. 2014 will be the year retailers focus on execution of this vision. EKN sees four key areas of focus emerging:
• Integration (of processes, systems) focused on the customer and the supply chain: Integration of customer data and systems at the front-end and inventory systems at the back-end is required to be able to deliver a seamless customer experience. EKN sees the emergence of a Unified Order and Commerce Platform as one of the biggest innovations in retail.
• Higher analytics maturity: In 2014, retailers will focus on delivering existing insights to the right person at the right time with the relevant context (investments in mobile business intelligence will rise) and ensuring insights are easily consumed and acted upon by business users.
• Organizational readiness: In 2014, we see more retailers preparing for this change via efforts such as instituting board-level committees focused on innovation and customer engagement, setting up shared services analytics teams, establishing customer experience roles and positions, and redefining metrics across channels to focus on customer lifetime value (CLV).
• Technology re-architecture: Architecture and innovation are set to be sexy again. With an infusion of data portability requirements, more personal devices in the workplace, access to more powerful computing in the cloud and the need to move to a primarily Wi-Fi network, most retailers will require an overhaul of their current IT architecture.
Gaurav Pant is research director and Girijesh Agarwal is director of communities, both for EKN, a peer-driven, practitioner-reviewed approach to research and community. For more information visit www.eknresearch.com