Technology is playing an ever more prevalent role in retail, not just in powering ecommerce, but sitting behind the entire strategy of many key retailers as they look at how to adapt to a changing world, while bracing themselves for a gale of headwinds.
Reporting its results for the year, M&S has shown that deep reflection on what it needs to do to meet its customer’s changing habits can reap dividends – but it has also shown that there is still a very long way to go. While profits are up and its back to the drawing board approach is working, it accepts that its store formats aren’t right and that it still needs to make significant and on going investments in technology to keep pace with its growing number of competitors.
Pets at Home, meanwhile, has shown just what the full embrace of technology can achieve. Its early switch to an omni-channel approach across all facets of pet care – from food to toys to grooming to veterinary services – has seen its grow its business unprecedentedly across the past two years. Omni-channel sales at the retailer are up 100% on 2019.
Some may argue that, while M&S is fighting not only its own legacy business, but also a raft of very agile competitors, Pets at Home has it easy, tapping into the boom in pet ownership during the pandemic, I am not so sure. Pets at Home has managed to grow its business my more than twice the CAGR of the sector it operates in as a whole over the past five years.
The answer lies in the strategic investment in technology. Pets at Home understood from early on that it needed to cover the entire lifecycle of each pet, as well as doing that through every conceivable channel. It also understands the power of technology in the business itself and has applied this to better weather supply chain issues than other retailers.
Boohoo Group also understands this. It has expanded rapidly over the past two years, mopping up many legacy brands through acquisition, as well as growing its own stable. This has seen it facing a challenge of managing product data and trying to streamline the increasingly Herculean task of adding new thousands of new products to its system every few months.
It has invested in back-end tech to make this happen and has created a much more agile business while delivering more effective CX to its users.
Tech in the back-end is big business – and its getting more sophisticated. Centralised ecommerce data platforms are set to grow into a $7bn market by 2026, as data is brought to heal. The days of siloed data are gone, with AI increasingly being used to create single views of customers from disparate sources, all adding up to better customer experience.
AI is also being used to make the world of personalisation more private. What seems like an oxymoron, private personalisation is starting to garner some big fans in retail, combining the need to have and understand all this data retailers have on consumers, but to use it carefully, respectfully and responsibly (and securely). This is powering a new generation of data platforms that take a more ethical approach and surely point to a world where things are better for consumers and for retailers.
