Technology has the potential to give any business the edge. However, it needs to be the correct technology for that business, and it has to be deployed smartly.
Retailers usually operate in highly competitive environments and retail technology is rarely cheap. As a result, it is easy for business entrepreneurs to spend a lot of money on something that does not provide a good level of ROI. Below, we look at how physical retailers can avoid the most common pitfalls that lead to retailers investing in the wrong technology.
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Don’t Blindly Follow Every Trend
The biggest mistake entrepreneurs make is buying technology for the wrong reasons. That includes :
- Because the retailers around you are adopting the tech
- To offset your tax bill
- Because a salesperson that you like and trust says it is good – it may be, but it can also turn out to be a money pit
- To secure a time-sensitive discount
For example, the fact that most fashion stores in a mall have bought moving mannequins does not mean every clothing retailer should do the same. These cyber quins are great for stores that sell sports clothing and can also work well for a retailer that sells streetwear. That store’s potential buyers may be persuaded to buy high-ticket items when they see how good the clothing looks during high-energy movements like running or jumping. But older shoppers browsing in a general clothing store are likely to see a moving mannequin as a gimmick. They might even think it is an expensive one which means they will end up paying more for anything they buy in that store.
Don’t Miss the Tech Trends do Provide that Edge
When it comes to retail tech, being a bit skeptical and cautious is usually a good idea. But not to the point where an important piece of hardware or software gets ignored. Let´s take digital signage as an example. It is a proven technology that brings many benefits. Regardless of what product or service a retailer sells, using it effectively really does boost customer engagement and sales.
Studies show that people respond more to images than we do to text or the spoken word. That is why most advertising material includes images. But, when someone sees the same image several times, they tend to switch off and that advertising has no impact. With digital signage, the fact that what is being displayed can be changed several times per minute solves that problem.
In addition, what is being advertised can be changed to better appeal to the demographics of the person using the store at that time of the day. For example, after school when there are a lot of teenagers shopping, products they are interested in can be advertised. At other times of the day, when the store is full of pensioners different offers that will appeal to them can be displayed.
Stay Up to Date
Businesses must stay aware of what technology is available. Subscribing to trade magazines, and tech website newsletters, following relevant social media feeds and setting up Google alerts can all help a retailer to do this.
For some retailers and physical location service providers joining local trade organizations also makes sense. The best ones are always on the lookout for technology that has the potential to improve the profitability of their members. Plus, there is the opportunity to speak to others who are considering buying or using the new software or hardware. Making it possible to learn from the experience of retailers who face the same, or very similar, trading challenges.
Adopt Early but Avoid Bleeding-edge Technology
Being an early adopter is often a good idea. Businesses that wait years before investing in new tech for their stores tend to fall too far behind their competitors. Often, they end up not working efficiently enough to be able to compete on price and quality. Being too slow to change can, and does, lead to retailers having to close their doors.
However, it is also important not to be too early an adopter. Most new technologies have glitches or are too clunky in the early days. Take chatbots as an example. In 2017, when they first became available, they were close to useless. A retailer that made the mistake of turning all of their customer service interactions over to one of those bots will have undoubtedly lost some loyal clients. Whereas, today, a retailer that is not using the now highly effective chatbots is leaving money on the table. They likely have someone in the business wasting hours tapping away in live chats answering questions a well-trained bot can answer in seconds.
Data Analysis is Essential
Retail entrepreneurs need to have an exceptionally good understanding of how their business works so that they end up investing in the right technology. Capturing and analyzing data is the cornerstone of being able to do this. It enables retailers to identify any issues that could potentially be solved using technology.
Much of that data can be collected and analyzed digitally but it is also important to use observation and input from members of staff.
For example, if at certain times of the day there are long queues it makes sense to install an additional self-checkout. Or to upgrade existing payment tech, so that transactions can take place faster. Spotting this issue usually requires a manager to see the queue and realize it is a regularly recurring problem. From there digital data can be used to check how long transactions are taking so that it can be determined whether buying a better software package will speed things up enough.
The above is a summary of how retailers can identify and choose the technology to give them an edge over their competitors. But being aware of the process is not enough, without action nothing changes. That is why every retailer needs to have an improvement manager. Of, failing that, a member of staff who is given time away from their regular job to analyze what is going on in the business and the market. Someone who is then allowed to go out and identify the technologies that will solve issues, as well as improve turnover and profitability.