Making It Real: Disruptive Technology To Elevate the Customer Experience
By Austre DeHaro and Brandon Pemberton, Point B
Store experience is an essential element of success, particularly as retailers lose market share to assortment and price players like Amazon and Walmart. In 2017, retailers announced nearly 7,000 store closures, with more announcements expected in 2018.
Yet, not all the news is bad. Retailers such as Ulta, Sephora, Target and Nordstrom are opening more stores. What are they getting right? They deliver differentiated experiences and have re-imagined the function of their physical space.
Retailers are delivering differentiated customer experiences through investment in store technology, people and process. Specifically, technology development and execution pose the most complex challenges and the greatest area of risk. Executives know that “disruptive technology” is on the 2018 agenda but often don’t know how to execute.
To remain competitive, avoid gimmicks and integrate the right technology into your store experience to deliver a cohesive brand strategy, and follow these four core principles.
Assess The Value Proposition And Current State
Knowing which in-store technologies to deploy and when requires a deep understanding of the brand, a hard look at the current in-store experience and a realistic understanding of new capability requirements. A company’s value proposition articulated through store experience becomes the product. Understanding this allows companies to select technology and amplify brand. It must be authentic and not a reaction to exciting technology.
Understanding the current in-store experience provides valuable information about what should remain and where to fill gaps for differentiation. Make the difficult decisions around whether technology will heighten the experience and whether the consumer will embrace change. Cross-functionally integrate new technology and processes into existing operations to mitigate development risk.
Set Up The Right Model
Seek to define and deploy new capabilities that bridge aspiration with execution. Start with a clear definition of success and frame outcomes in terms of business objectives, not technical requirements. According to a Point B “Program Success” study, 90% of failed programs have weak leadership driving the vision. Position for success with clear goals that are meaningful to executive leaders.
Align the operating model to realize benefit from the investment. 75% of failed programs have incomplete or partial planning for business readiness. Enable readiness by adapting store operations and process to take advantage of new capabilities and re-aligning performance metrics to promote adoption.
Test-To-Learn And Iterate
The cornerstone of successful execution is a test-to-learn approach baked into the development process. Successful new technology execution requires a test-to-learn mindset that builds key hypotheses about the experience and the impact of this experience on the company. Testing these hypotheses requires time and iteration. Exercising the organizational discipline to change course and learn from testing can reduce execution waste.
Establish An Enduring Capability
The capability to continuously assess, identify, test and deploy should be enduring. Customer expectations and the technology landscape will evolve. The skills and capabilities to continuously assess strategy, understand new technologies and enhance the experience likely do not exist today. Focus on building the long-term capability in parallel with the initial minimum viable product (MVP) to create the experience. The result is organizational learning that will support a continuous improvement capability.
Store experience is becoming a retailer’s most valuable asset. The deployment of technology can be a powerful tool to develop this asset. Successful transformations feature technology — and execution — that is authentic to the brand and delivered with precision. Continual assessment and new capability maturation can position retailers to realize long-term benefit.
Brandon Pemberton and Austre DeHaro are retail consultants with with Point B, an integrated management consulting, venture investment, and real estate development firm.