The Digital Future Of Retail

Chong Mock Seng

Technology is rewriting the face of retail.

Digital influence – the degree to which in-store sales are influenced by digital in the shopping journey – is growing at an intensifying pace. By 2020, research has indicated that almost 100% of all in-store sales will be affected by mobile technology and easy access to digital information. With information at their fingertips, consumers now expect a new type of experience: one that is individual, where commerce is hyper-convenient, and where technology enhances the experience.

Yes, a digital storm is impacting every industry, but retail is directly in its eye. In the face of this, it is clear retailers need to reimagine their business or risk becoming irrelevant.

So, what will the digital future of retail look like? Here are a few key areas.

Reimagined business models: cross-pollination of strategies

With digital redefining retail, newer business models will rethink the use of technology in creating and capturing new sources of value.

Today, we are witnessing brick and mortar retailers breaking out of the norms and using digital means to engage customers better. Zara is one example with its new online store for Singapore. Indonesia’s PT Matahari Department Store also dove into e-commerce with the launch of MatahariStore.com, which allows customers to shop online and pick up their purchases at its nearest delivery hub. Another example is electronic goods, IT, and furniture retailer Courts, which breathed new life into its physical stores with the introduction of in-store self-help digital kiosks, Click & Collect counters, QR codes, mobile apps, and free WiFi – creating a more connected and personalized experience for customers.

At the same time, pure play e-tailers are finding ways to enter the brick and mortar world to better connect with customers. On the international retailing scene, we already see Amazon doing so. Alibaba is taking steps as well, announcing a strategic partnership with Bailian Group to merge its online and offline shopping. More regionally, examples include Reebonz and Megafash.

Furthermore, we can expect increasing competition from non-traditional retailers as well as retailing with no physical inventory. SingPost – traditionally a postal service provider – now offers financial services, marketing solutions, and logistics services. Its e-commerce/brick-and-mortar mall, due to open in mid-2017, will allow shoppers to arrange for delivery to their homes after browsing in-store, saving tenant retailers the cost of having an in-store inventory space.

Clearly, retail is becoming outcome-based – focusing on meaningful engagements with individual customers and not on products. In addition, we will see that data and insights will be used not only in growing the core business, but also in creating new businesses that directly monetize data. Under Armour provides an excellent illustration with its Connected Fitness app platform. With 180 million registered users, Under Armour is the world’s largest tracker of fitness information. The app also generates revenue with premium versions and advertising. With a real-time pulse of customers’ fitness routines and athletic needs, it now has numerous possibilities to monetize the platform and data.

Reimagined shopper engagement: omnichannel commerce and segment-of-one marketing 

The new reality is that the customer journey is no longer linear. To successfully woo the consumer, retailers must become more adept at orchestrating core processes in the labyrinth of near-infinite purchase paths available to them.

Personalized marketing based on history, context, and predictions has become a reality as retailers build a true 360-view of a customer journey that captures all interactions (all offline and online footprints), contexts, and behaviors with customers. Segment-of-one loyalty programs will sense customer preferences, tailor contextually accurate and precise recommendations, then cross-sell/upsell opportunities to a customer’s digital identity. Retailers will differentiate themselves with innovative campaigns that extend beyond price points to align with the values of individual customers.

One such retailer that transformed its customer engagement and omnichannel experience is Ulta Beauty, America’s largest beauty specialty store. Implementing its Connected Beauty vision has allowed Ulta to seamlessly manage real-time inventory across 20,000 products and 800 stores as well as serve customers with in-depth, personalized recommendations. Today, Ulta’s customers get personalized cosmetics recommendations that include product data, crowd-sourced reviews, and how-to videos. Associates even take Ulta’s clienteling app on the road to almost 2,000 events a year, raising brand awareness and driving customer loyalty outside the brick and mortar stores.

Ulta’s omnichannel strategy and underlying technology also ensure both customers and associates are accessing and utilizing the same set of information at any point – whether they are on the website, mobile, or in store. From product discovery to education, testing, purchase, social sharing, and feedback, Ulta allows consumers to glide seamlessly between online and offline, where they are able to research, deliberate, make a decision, and then review their experiences.

What it also means is Ulta gets a consistent set of data for business reporting.

Reimagined retail processes: connected warehouses, automated dynamic pricing

As retailers seek new ways to reach consumers while maximizing efficiencies within their own operations, we can expect all aspects of retail business processes to be reimagined in the digital future of retail.

Connected warehouses and digital identification is one key area that will grow to enable simplified material flows and increased warehouse efficiencies. These processes will connect store associates and shoppers directly to inventory and shipment schedules. Flexible supply networks will also enable make-to-order assortments, while flexible fulfillment models that give consumers more choices put the retailer in a more competitive position. We will see the reduction of inventory shrinkage with more precise matching of supply and demand based on customer preferences. Tailoring assortments will further improve margins and reduce markdowns on end-of-season merchandise.

Automated, dynamic, and contextual pricing will become the norm as retailers marry customer preferences as well as digital and social patterns with their own inventory and predictive financial models. Sophisticated predictive methods will replace traditional back-office planning to align pricing with demand in real time.

A retailer we see having success in this area today is M. Video. With over 340 stores and 52 e-commerce websites, M. Video is the largest consumer electronics retail chain in Russia. When M. Video’s e-commerce team faced a 70% shopping cart abandonment rate, it harnessed a predictive analytics solution that saw the realization of a 29% increase in cart recovery rate, yielding a 39% increase in overall carts recovered. That’s more than US$7.1 million in revenue attributable to the analytics-based solution.

And it’s really just the tip of the iceberg.

The future, today

Retailers need to look into how they can create the digital future today.

The urgency to move ahead is very real. The retail landscape is becoming increasingly crowded and more competitive than ever. We are moving towards a reality where consumers can easily get anything, anytime, anywhere. And this has fundamentally changed the face of customers – how they make decisions, what they value, and how they want to do business. Retailers that do not take the essential first step to differentiate themselves through innovative customer engagement risk becoming irrelevant – forever.

The speed of digitization will only accelerate. While it brings with it the peril of Digital Darwinism, digitization also provides ample opportunities for the most innovative retailers to leap ahead.

The future of retail is already possible. Why wait when you can create your future as a retail leader today with SAP solutions for retailers. Are you ready to start your journey?

Comments

Chong Mock Seng

About Chong Mock Seng

Chong Mock Seng is Retail Industry Leader of Southeast Asia for SAP. He has focused on retail, consumer products, and high tech manufacturing customers in the Asia-Pacific region and has a wealth of insights and practical experience through his myriad engagements in which he enjoys sharing with his customers in his current role as Retail IVE for Southeast Asia. He is most passionate about dialogues and action plans on transformative retail engineering in the disruptive digital era.

Amazing Digital Marketing Trends And Tips To Expand Your Business In 2015

Sunny Popali

Amazing Digital Marketing Trends & Tips To Expand Your Business In 2015The fast-paced world of digital marketing is changing too quickly for most companies to adapt. But staying up to date with the latest industry trends is imperative for anyone involved with expanding a business.

Here are five trends that have shaped the industry this year and that will become more important as we move forward:

  1. Email marketing will need to become smarter

Whether you like it or not, email is the most ubiquitous tool online. Everyone has it, and utilizing it properly can push your marketing ahead of your rivals. Because business use of email is still very widespread, you need to get smarter about email marketing in order to fully realize your business’s marketing strategy. Luckily, there are a number of tools that can help you market more effectively, such as Mailchimp.

  1. Content marketing will become integrated and more valuable

Content is king, and it seems to be getting more important every day. Google and other search engines are focusing more on the content you create as the potential of the online world as marketing tool becomes apparent. Now there seems to be a push for current, relevant content that you can use for your services and promote your business.

Staying fresh with the content you provide is almost as important as ensuring high-quality content. Customers will pay more attention if your content is relevant and timely.

  1. Mobile assets and paid social media are more important than ever

It’s no secret that mobile is key to your marketing efforts. More mobile devices are sold and more people are reading content on mobile screens than ever before, so it is crucial to your overall strategy to have mobile marketing expertise on your team. London-based Abacus Marketing agrees that mobile marketing could overtake desktop website marketing in just a few years.

  1. Big Data for personalization plays a key role

Marketers are increasingly using Big Data to get their brand message out to the public in a more personalized format. One obvious example is Google Trend analysis, a highly useful tool that marketing experts use to obtain the latest on what is trending around the world. You can — and should — use it in your business marketing efforts. Big Data will also let you offer specific content to buyers who are more likely to look for certain items, for example, and offer personalized deals to specific groups of within your customer base. Other tools, which until recently were the stuff of science fiction, are also available that let you do things like use predictive analysis to score leads.

  1. Visual media matters

A picture really is worth a thousand words, as the saying goes, and nobody can deny the effectiveness of a well-designed infographic. In fact, some studies suggest that Millennials are particularly attracted to content with great visuals. Animated gifs and colorful bar graphs have even found their way into heavy-duty financial reports, so why not give them a try in your business marketing efforts?

A few more tips:

  • Always keep your content relevant and current to attract the attention of your target audience.
  • Always keep all your social media and public accounts fresh. Don’t use old content or outdated pictures in any public forum.
  • Your reviews are a proxy for your online reputation, so pay careful attention to them.
  • Much online content is being consumed on mobile now, so focus specifically on the design and usability of your mobile apps.
  • Online marketing is essentially geared towards getting more traffic onto your site. The more people visit, the better your chances of increasing sales.

Want more insight on how digital marketing is evolving? See Shutterstock Report: The Face Of Marketing Is Changing — And It Doesn’t Include Vince Vaughn.

Learn more about marketing Analytics.

Comments

Sunny Popali

About Sunny Popali

Sunny Popali is SEO Director at www.tempocreative.com. Tempo Creative is a Phoenix inbound marketing company that has served over 700 clients since 2001. Tempos team specializes in digital and internet marketing services including web design, SEO, social media and strategy.

Social Media Matters: 6 Content And Social Media Trend Predictions For 2016 [INFOGRAPHIC]

Julie Ellis

As 2015 winds down, it’s time to look forward to 2016 and explore the social media and content marketing trends that will impact marketing strategies over the next 15 months or so.

Some of the upcoming trends simply indicate an intensification of current trends, however others indicate that there are new things that will have a big impact in 2016.

Take a look at a few trends that should definitely factor in your planning for 2016.

1. SEO will focus more on social media platforms and less on search engines

Clearly Google is going nowhere. In fact, in 2016 Google’s word will still essentially be law when it comes to search engine optimization.

However, in 2016 there will be some changes in SEO. Many of these changes will be due to the fact that users are increasingly searching for products and services directly from websites such as Facebook, Pinterest, and YouTube.

There are two reasons for this shift in customer habits:

  • Customers are relying more and more on customer comments, feedback, and reviews before making purchasing decisions. This means that they are most likely to search directly on platforms where they can find that information.
  • Customers who are seeking information about products and services feel that video- and image-based content is more trustworthy.

2. The need to optimize for mobile and touchscreens will intensify

Consumers are using their mobile devices and tablets for the following tasks at a sharply increasing rate:

  • Sending and receiving emails and messages
  • Making purchases
  • Researching products and services
  • Watching videos
  • Reading or writing reviews and comments
  • Obtaining driving directions and using navigation apps
  • Visiting news and entertainment websites
  • Using social media

Most marketers would be hard-pressed to look at this list and see any case for continuing to avoid mobile and touchscreen optimization. Yet, for some reason many companies still see mobile optimization as something that is nice to do, but not urgent.

This lack of a sense of urgency seemingly ignores the fact that more than 80% of the highest growing group of consumers indicate that it is highly important that retailers provide mobile apps that work well. According to the same study, nearly 90% of Millennials believe that there are a large number of websites that have not done a very good job of optimizing for mobile.

3. Content marketing will move to edgier social media platforms

Platforms such as Instagram and Snapchat weren’t considered to be valid targets for mainstream content marketing efforts until now.

This is because they were considered to be too unproven and too “on the fringe” to warrant the time and marketing budget investments, when platforms such as Facebook and YouTube were so popular and had proven track records when it came to content marketing opportunity and success.

However, now that Instagram is enjoying such tremendous growth, and is opening up advertising opportunities to businesses beyond its brand partners, it (along with other platforms) will be seen as more and more viable in 2016.

4. Facebook will remain a strong player, but the demographic of the average user will age

In 2016, Facebook will likely remain the flagship social media website when it comes to sharing and promoting content, engaging with customers, and increasing Internet recognition.

However, it will become less and less possible to ignore the fact that younger consumers are moving away from the platform as their primary source of online social interaction and content consumption. Some companies may be able to maintain status quo for 2016 without feeling any negative impacts.

However, others may need to rethink their content marketing strategies for 2016 to take these shifts into account. Depending on their branding and the products or services that they offer, some companies may be able to profit from these changes by customizing the content that they promote on Facebook for an older demographic.

5. Content production must reflect quality and variety

  • Both B2B and B2C buyers value video based content over text based content.
  • While some curated content is a good thing, consumers believe that custom content is an indication that a company wishes to create a relationship with them.
  • The great majority of these same consumers report that customized content is useful for them.
  • B2B customers prefer learning about products and services through content as opposed to paid advertising.
  • Consumers believe that videos are more trustworthy forms of content than text.

Here is a great infographic depicting the importance of video in content marketing efforts:
Small Business Video infographic

A final, very important thing to note when considering content trends for 2016 is the decreasing value of the keyword as a way of optimizing content. In fact, in an effort to crack down on keyword stuffing, Google’s optimization rules have been updated to to kick offending sites out of prime SERP positions.

6. Oculus Rift will create significant changes in customer engagement

Oculus Rift is not likely to offer much to marketers in 2016. After all, it isn’t expected to ship to consumers until the first quarter. However, what Oculus Rift will do is influence the decisions that marketers make when it comes to creating customer interaction.

For example, companies that have not yet embraced storytelling may want to make 2016 the year that they do just that, because later in 2016 Oculus Rift may be the platform that their competitors will be using to tell stories while giving consumers a 360-degree vantage point.

For a deeper dive on engaging with customers through storytelling, see Brand Storytelling: Where Humanity Takes Center Stage.

Comments

Julie Ellis

About Julie Ellis

Julie Ellis – marketer and professional blogger, writes about social media, education, self-improvement, marketing and psychology. To contact Julie follow her on Twitter or LinkedIn.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


Comments

Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

Tags:

Finance And HR: Friends Or Foes? Shifting To A Collaborative Mindset

Richard McLean

Part 1 in the 3-part “Finance and HR Collaboration” series

In my last blog, I challenged you to think of collaboration as the next killer app, citing a recent study by Oxford Economics sponsored by SAP. The study clearly explains how corporate performance improves when finance actively engages in collaboration with other business functions.

As a case in point, consider finance and HR. Both are being called on to work more collaboratively with each other – and the broader business – to help achieve a shared vision for the company. In most organizations, both have undergone a transformation to extend beyond operational tasks and adopt a more strategic focus, opening the door to more collaboration. As such, both have assumed three very important roles in the company – business partner, change agent, and steward. In this post, I’ll illustrate how collaboration can enable HR and finance to be more effective business partners.

Making the transition to focus on broader business objectives

My colleague Renata Janini Dohmen, senior vice president of HR for SAP Asia Pacific Japan, credits a changing mindset for both finance and HR as key to enabling the transition away from our traditional roles to be more collaborative. She says, “For a long time, people in HR and finance were seen as opponents. HR was focused on employees and how to motivate, encourage, and cheer on the workforce. Finance looked at the numbers and was a lot more cautious and possibly more skeptical in terms of making an investment. Today, both areas have made the transition to take on a more holistic perspective. We are pursuing strategies and approaching decisions based on what delivers the best return on investment for the company’s assets, whether those assets are monetary or non-monetary. This mindset shift plays a key role in how finance and HR execute the strategic imperatives of the company,” she notes.

Viewing joint decisions from a completely different lens

I agree with Renata. This mindset change has certainly impacted the way I make decisions. If I’m just focused on controlling costs and assessing expenditures, I’ll evaluate programs and ideas quite differently than if I’m thinking about the big picture.

For example, there’s an HR manager in our organization who runs Compensation and Benefits. She approaches me regularly with great ideas. But those ideas cost money. In the past, I was probably more inclined to look at those conversations from a tactical perspective. It was easy for me to simply say, “No, we can’t afford it.”

Now I look at her ideas from a more strategic perspective. I think, “What do we want our culture to be in the years ahead? Are the benefits packages she is proposing perhaps the right ones to get us there? Are they family friendly? Are they relevant for people in today’s world? Will they make us an employer of choice?” I quite enjoy the rich conversations we have about the impact of compensation and benefits design on the culture we want to create. Now, I see our relationship as much more collaborative and jointly invested in attracting and retaining the best people who will ultimately deliver on the company strategy. It’s a completely different lens.

Defining how finance and HR align to the company strategy

Renata and I believe that greater collaboration between finance and HR is a critical success factor. How can your organization achieve this shift? “Once the organization has clearly defined what role finance and HR must play and how they fundamentally align to the company strategy, then it’s more natural to structure them in a way to support such transformation,” Renata explains.

Technology plays an important role in our ability to successfully collaborate. Looking back, finance and HR were heavily focused on our own operational areas because everything we did tended to consume more time – just keeping the lights on and taking care of our basic responsibilities. Now, through a more efficient operating model with shared services, standard operating procedures, and automation, we can both be more business-focused and integrated. As a result, we’re able to collaborate in more meaningful ways to have a positive impact on business outcomes.

In our next blog, we’ll look at how finance and HR can work together as agents of change.

For a deeper dive, download the Oxford Economics study sponsored by SAP.

Follow SAP Finance online: @SAPFinance (Twitter)LinkedIn | FacebookYouTube

Comments

Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.