Real-time Retail Is the New Black

I recently wrote an article about real-time retail for Apparel Magazine and here is a recap of the article.

Woman on phoneIn apparel and fashion retailing, identifying the hottest trends and understanding your customers’ buying habits are critical to your success. Predicting what colors, fabrics, trends and styles will be popular in the upcoming seasons is crucial to maximizing sales and profitability. Buying the wrong colors or styles can be a costly mistake, so having access to your customers’ preferences in colors, sizes, styles and even how they choose to shop is key. Having this customer information in real-time not only allows you to understand your customer but also allows your associates to suggestive sell and enhance the shopping experience.

As you know, customers are becoming more demanding — driven by new technology and the real-time capabilities it enables. A customer can be shopping at a store for a specific purse or sweater design and she can take a photo of it and gain instant access to the best prices from multiple competitors and information on the closest store that carries it in stock — in real-time. Customers expect this seamless experience in the store, on the web or anywhere they choose to shop. “Real-time retail” is the new retail imperative.

What is real-time retail?

When a customer walks in your door, do you know who she is? Do you know what she abandoned in her online shopping cart this morning? Do you know that she looked at your daily specials on her smartphone 30 minutes ago? Can you see current inventory at your store and all other stores and distribution centers in your chain — in real-time? These capabilities are examples of real-time retail in action. Real-time retail is the ability to deliver a seamless experience to consumers whenever, wherever or however they choose to shop by gathering, analyzing and disseminating customer, product, pricing and inventory data across all channels — in real-time.

Imagine some of the following scenarios that are possible through real-time retail:

Woman Scaning Tag• A customer walks into your store and her favorite sales associate is immediately notified on her tablet or smartphone (assuming the customer has opted-in). The associate not only can see the customer’s prior purchases, but also her recent browsing history so the associate can direct her to similar items in the store.

• Your sales associate can see a customer’s holiday purchases from last year and make suggestions for this year’s purchases when she visits the store based on these insights.

• A customer posts an item to Facebook while in the store and gets feedback from friends in real-time on whether to purchase the item.

• As a customer is shopping in the store, she finds an item she likes but it is not available in her size; your associate can access real-time inventory information to find out where the item can be found and ship it directly to the customer.

• A customer is looking at a shirt in two colors and can’t decide which one she wants. Based on current sales and inventory levels, your store can offer the customer a 10 percent off promotion to encourage her to purchase one of the colors instead of the other.

According to the recent survey of North American retailers by Boston Retail Partners (BRP), one of the top priorities for retailers in 2015 is real-time retail. Nearly half of the retail respondents in the BRP 2015 POS/Customer Engagement Benchmarking Survey indicated that real-time retail is among their top three priorities for 2015.

According to the survey, retailers are focused on expanding their real-time capabilities to deliver the enhanced services their customers now expect.

Tailoring the Customer Experience Chart

Enhancing the shopping experience

Retailers that can provide associates with customer data in real-time before the customer reaches the checkout are able to provide a more personalized experience and can offer suggestions to customers that impact their purchase decisions.  Many retailers are planning to personalize the customer experience by utilizing virtual closets (or room, garage or whatever is appropriate for the retailer). By understanding what is currently in the customer’s closet, a sales associate can easily suggest products that coordinate with the customer’s current wardrobe and even show her how well items can coordinate together.

According to our survey respondents, 510 percent more retailers will know what is in their customers’ closets within three years and provide this information to sales associates in real-time.

Personalized promotions

In the past, retailers’ pricing hierarchy was based on various levels: company, division, channel, zone and store. Now there is a new pricing strategy and structure at the personal level — based on an individual shopper. According to the survey, 174 percent more retailers will be offering personalized promotions in the next three years. By understanding a customer’s purchasing habits the retailer gains insight into the price point at which the customer may be willing to purchase and can offer incentives or promotions in real-time to help close the sale.

Personalized recommendations

Woman holding shirt up to friend in clothes storeOne of the biggest growth areas over the next three years will be to offer personalized recommendations based on an individual customer’s shopping history. Currently 20 percent of retailers offer the ability for their associates to suggestive sell based on a customer’s previous purchases and 56 percent more plan to implement this feature within three years — a 280 percent increase.

Even more interesting is the fact that retailers are beginning to offer associates the ability to suggestive sell to their customers based on the customer’s online browsing history. This offers the ability to transcend channels and tailor the shopping experience to the customer. Offering personalized recommendations based on online behaviors is a key capability in the convergence of the digital and in-store experience.

According to BRP’s survey, personalizing the shopping experience by understanding the customer’s online browsing history will increase by 1060 percent over the next three years.

Conclusion

Customers are forcing a fundamental reshaping of retail by demanding a seamless convergence of the in-store and digital experiences. Successful retailers realize that they can no longer divide that experience among separate channels and must work towards a holistic shopping experience that transcends channels. One of the keys to delivering this experience is real-time retail. This is why real-time retail is “the new black!” 


As always, I appreciate hearing your thoughts on this topic.  Please enter your comments and idea below.

Ken

Ken Morris

Principal
Ken was CEO and President of LakeWest Group and founder of CFT Consulting and CFT Systems, a retail software company. Earlier in his career, he held retail information technology executive positions at Lord & Taylor, Filene’s (Macy’s), Talbots, Stop & Shop Supermarket Company, and Sears. His experience is with strategy, selection development and deployment of retail management systems and processes.

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