Brexit is most certainly a cause for concern for all businesses. However, it can’t be blamed for all the pressures which many retailers find themselves subjected to. Competition is fierce and even maintaining the status quo can be seen as an uphill struggle, regardless of any of the uncertainties around stock availability and pricing due to Brexit. It’s also a consumer’s market, so anything that retailers can do to improve loyalty, customer retention and increase market share is worth doing.
This includes loyalty schemes, discounting and special offers for new customers to name a few. However, this has little impact unless consumers value their journey and find it a frictionless and enjoyable experience across all channels, regardless of where they choose to engage.
It goes without saying that the right hardware and software technology is needed to achieve a smooth and successful online buying experience. But, in a bricks-and-mortar store, technology can also be the differentiator in delivering such an experience. In this case, the technology is on show and should be used to its full effect. Virtual reality, augmented reality and interactive displays can all be used to transform the shopping trip and make it a truly memorable experience. Also, salespeople can become more interactive and knowledgeable as they interact with shoppers and address their requirements through iPads, rather than being confined to the sales desk.
While this is a convincing argument for retaining existing and attracting new customers, it is also a costly solution which requires a sizeable capex investment. The question then becomes — how can retailers balance the outlay against the returns?
The uncertainties around Brexit are not helping with this question as many retailers seek to put in place strategies which mitigate any potential risks to their bottom line in the coming months, rather than implementing plans for growth. While this is a practical approach, businesses still need to operate as usual and technology is one way to ensure that the business remains viable and profitable while investing in employees and customers alike.
Alternative funding models such as subscription services can spread the investment by relieving the burden on capex while delivering on the business’s objectives. This may be a step away from the traditional model which many retailers are used to. However, it is one that is already widely adopted by consumers to fund their cars and mobile phones. Like cars, technology also has a shelf-life, but a long one in which it needs to be used to its full potential until a more suitable, cost-effective or more innovative model becomes available. Therefore, surely it makes sense to finance technology in the same way as cars — streamlining the payment process and managing deployment can minimise the risks and return greater efficiencies to businesses.
A subscription model not only eases the burden of an upfront investment, it also allows retailers to have the latest technology to provide the best possible customer experience to consumers and contend effectively against their competitors. Additionally, there are no unpredictable costs relating to device ownership such as maintenance, damages and breakdowns. This model also protects against any unexpected large investments. For example, if online purchases increase then an additional server would be required to manage the increased volumes of data. The consequences of not purchasing the server would be devasting to a business’s reputation and subsequently, its bottom line, regardless if there was money available or not. With a subscription model its cost can be spread over the term of the agreement.
Partnering with the right technology partner and using this subscription model can spread the costs of all technology required by the retailer. Also, the partner can manage the assets under warranty and replace them as required. Deployment headaches for retailers with multiple sites can also be overcome as devices such as iPads can be set up and installed by the partner so that they arrive in store ready to go.
Often, replacing or enhancing technology assets can be seen as time consuming, challenging and costly. The main worries being data privacy and security, a lack of budget and resources, and the absence of the right in-house skills and expertise. In the fast-moving and highly competitive e-commerce market, these are only enhanced. Finding a trusted technology partner and using a subscription funding model can go a long way in overcoming these hurdles. The right partner will appreciate that whatever the business objective — streamlining operations, enhancing the customer experience, or improving productivity — the right technology can be deployed and funded to address these and ultimately grow the bottom line.
Chris Labrey is MD, UK & Ireland, at Econocom