by Kelly Herrell, CEO of Hazelcast.
While much of the attention on Australian retail in the past year has focused on e-commerce sales and the percentage of sales that e-commerce alone generates, the reality is that not every digital transaction is executed 100 percent online.
Many purchases may start online but are completed in-store or with kerbside (contactless) pickup, and vice-versa.
This kind of ‘hybrid’ purchase – an experience that involves elements of both bricks-and-mortar and digital channels – is expected to become the de facto operating mode for Australian retailers.
“The integration of both online-offline channels is vital for retailer success in the current environment due to changing consumption patterns,” JLL Research notes. “According to JLL’s ‘Importance of bricks and mortar stores for online sales’, a study found that 73% of consumers now use multiple shopping channels. In the future, the integration between offline and online channels will be crucial in the changing retail landscape.”
Customers expect a shopping experience that can be delivered via omnichannel and seamlessly.
It is now considered mandatory that retailers deliver experiences that are consistent across channels, enable personalisation of instore and touchless capabilities, and deliver all this while controlling and reducing expenses and offering scalability and reliability.
This complex mix of requirements is driving the creation of a new generation of retail platforms.
The challenge for retailers is that there’s a lot of moving parts and data-intensive calculations that need to occur in the background to enable these platforms and processes to function, and not every retailer has achieved the maturity in this space to meet the snowballing expectations of their customers.
A lot of what customers want to see from retailers requires real-time data drawn from across the end-to-end purchasing, fulfilment and delivery process.
Top-performing retailers from a customer experience standpoint are typically running intensive calculations on their data in the background to power the experience and to address on-the-fly any challenges that may arise.
According to KPMG’s Australian retail outlook for 2021, two of the four mechanisms for creating profitable omnichannel operations are data-driven: using insights “to tailor range and channel offers”, and AI and big data use “to leverage loyalty and customer programs”.
Even that is the tip of the iceberg in terms of the data infrastructure needed to power new retail experiences.
Recognising a customer and their preferences as they present to a retail platform and inducing a purchase is one thing; fulfilling the promise (and the order) to the customer’s satisfaction can be a significant challenge.
Customers that want an item and can order it online expect that the item is in stock, and that the order can be turned around and shipped in a reasonable timeframe – counted in days, not weeks. If they buy online and choose to collect in-store, they expect the item to be available at the location, or for inventory to be procured (such as via an inter-store transfer) before they make the trip.
Retailers typically use a calculation called available to promise (ATP) to understand the amount of saleable stock they have on hand at any one time. There are instances now emerging in Australia of retailers performing ATP calculations in real-time when a customer attempts to place an order, allowing any stock problem to be picked up before it causes a poor experience. At least one large retailer in Australia now shows customers how much inventory is at stores in their area before they visit.
Selling on the edge
What all of this serves to illustrate is how critical the ‘edge’ experience is now in Australian retail.
Think of the ‘edge’ as all the different aspects of a transaction that sit outside the traditional retail store, but that have to be called upon in order to execute or complete the sale. Retailers need to adopt a model where there is a close coupling between the core and ‘edge’ elements that come together to form the end-to-end shopping experience.
Bringing intelligence to the edge is the next frontier or challenge for retailers.
Retailers need fast access to data in a seamless, boundaryless way. They also need fast computation capabilities for data in motion to provide real-time intelligence as to how a transaction is progressing and how progress can be communicated regularly to the customer.
Fast access to data can be provided through a data layer that is able to interconnect with all the different ‘edge’ environments and synchronise across them to provide a unified, real-time view of a transaction and its execution status.
It’s critical that this technology is lightweight enough to run in a variety of environments, from a factory or warehouse to a delivery vehicle. Combined with 5G connectivity of assets, continuous visibility over an order can be maintained, regardless of what stage it is at.
The combination of these elements delivers a set of capabilities for driving ultrafast and ultra-intelligent fulfilment across online and bricks-and-mortar stores and into the supply chain.