In today's economy, retailers are being forced to trim margins to battle a marketplace of global competition, slow growth, increasingly demanding customers and rising costs. Many retailers have reduced their margins to a single-digit percentage, and most are struggling to find ways to reduce costs and operate more efficiently.
Those who want to improve their margins are turning to technology to woo customers and allow employees to operate more efficiently and productively.
Here are some of ways that retailers can leverage technology to improve their margins.
Mine Your Data
Without the Internet and the resulting explosive growth of social-media sites and mobile devices, it is difficult to imagine that the era of big data would have arrived. But as it is, retailers have access to a virtual treasure trove of data. You can collect data from multiple touch points, including emails, opt-in programs, online reviews and social-media posts. Customer activities at in-store kiosks, in-person redemption of coupons and phone calls to the store are other touch points that can be a source of data.
Regardless of the quantity of data you amass, however, you will not benefit from it just by collecting it. You will need to act quickly on the data you collect to avoid it becoming obsolete or immaterial. Near-real-time analytics can help you make sense of what the data indicates and offer you valuable insights into consumer behavior.
Analyze Your Data
When it comes to leveraging your data, a good analytics program is essential. With the proper analysis, you can target customers at the granular level rather than massive groups that are categorized by sweeping demographics like age or gender.
You can learn how your customers prefer to shop, whether they redeem discount coupons, the days on which they spend the most, and the merchandise they are more likely to purchase. This helps you create customized offers and campaigns that reach the right shoppers at the right time.
Analytics can help you in many other ways. For example, you can optimize your inventory through predictive analytics to help avoid out-of-stock situations. Analyzing in-store traffic patterns can help you design a layout that provides the greatest exposure for your merchandise or eliminates customer confusion. And point-of-sale recommendations can drive upselling at the "moment of truth."
Embrace In-Store Technology
The retail layout consisting of a front-end bank of cash registers and long lines of customers waiting to pay is quickly becoming obsolete. These arrangements can foster ill will among customers, and recent studies have shown that up to 10 percent will simply abandon their merchandise and leave the store. Other complaints include the difficulty in finding a knowledgeable associate, empty spaces on the shelves where the desired item should be, and problems determining the actual price of an item.
Here are a few ways that in-store technology can alleviate customer frustration:
- Mobile POS stations can be scattered through the store, requiring little more than a credit card reader, printer and hand-held scanner. Customers can avoid lengthy lines, pay for their purchases and receive an official receipt.
- Equipping store associates with mobile devices can transform even a recent hire into a product expert. Associates are better equipped to answer questions about the product and its location, and to suggest add-ons such as batteries, special cleaners or extended warranties.
- In-store kiosks let customers serve themselves. They can research products, check prices, sign up for a registry, swipe their loyalty cards and download coupons.
- i-Beacons can be strategically placed to receive a signal when a customer's cell phone is physically near. You can then transmit personalized offers or notifications to encourage customers to enter your store.
- Technology can play a major role in your inventory management. Inventory can be deducted at the time it is sold, and alerts can be sent when the shelf level reaches a certain point. Associates can easily discover whether an item is available in the storeroom or at another location, or learn when the next shipment is due to arrive.
Savvy retailers are already leveraging existing technology — and are poised to embrace the next generation of as-yet unknown innovations.