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Digital Transformation in Retail - How Brands are Preparing for the Holidays

Appian Contributor
November 29, 2017

How retailers prepare for and handle the holiday shopping season is often a sign of what is to come in the industry. Retailers bring in huge revenues during the final quarter of the year as consumers rush out to purchase gifts for one another. As a result, the months spent preparing for the holiday shopping period are often indicative of the most important developments in the retail sector. This year is no exception. The National Retail Federation predicted that retail sales in November and December will total between $682 billion and $655.8 billion this year. These sales projections represent a year-over-year increase of between 3.6 percent and 4 percent.

With significant growth coming in this year's holiday season, retailers are working hard to prepare for the high volume of sales and heated competition on its way. Let's explore the themes coming out of the build-up to this year's holidays and look at what they mean for the overarching evolution of the retail sector.

Retailers Are Emphasizing Personalization

Businesses increasingly capture customer data associated with just about every transaction. Online accounts are no longer exclusively present for e-commerce purposes, but instead are used to track purchases and interactions across all channels. Organizations also have access to full shopping histories going back years for many consumers. All of this data is becoming invaluable for brands as it creates opportunities for analysis and strategic planning. Beyond that, retailers can use customer data to get a better understanding of what shoppers are looking for and create more cohesive customer experiences.

"Businesses increasingly capture customer data associated with just about every transaction."

Having all of this information can be incredibly useful when businesses try to perform strategic analysis and planning, but they can also put the data to use in their more immediate customer interactions. An AllianceData report explained that consumers are increasingly responding better to receiving personalized interactions, giving retailers another opportunity to get attention that would otherwise only be attainable through deep discounts. In particular, retailers can give themselves an edge by using technology in stores to create more personalized experiences. This can include creating customer-facing apps that provide an integrated experience between channels. For example, an app that lets users scan in a product they like in a store, but order it online in another color, can allow for a sale that wouldn't otherwise happen.

Establishing these types of unique, individualized shopping interactions depends on giving employees tools to access and use customer data in real time. This can involve internal apps that use location data, customer records and similar details to inform employees when customers are engaging with the brand in stores. For example, if your data mining system notices a customer talking about heading to your store to get a gift, your employees should be able to pick up that post and respond, possibly by messaging the user in a non-invasive way. Customer journeys are taking place across multiple channels, and businesses must be able to eliminate operational silos that limit their ability to engage customers.

A Timely Nudge from Retailers is Still Effective

A classic image of retail is a person in a store, looking at a few products, until a friendly clerk comes over, asks a few strategic questions and helps the customer make a choice. This bit of advice serves as a nudge to close a sale while also fostering customer happiness. In our digital world, this personal interaction is much less frequent. Many consumers research products online before they even think about going to a store. Browsing reviews and product pages using a smartphone while in the store is becoming the normal expectation. With customers having so much knowledge about products, the conventional wisdom would seem to be that consumers want more space and don't need brands to reach out.

However, a National Retail Federation report covering expectations for the 2017 holiday season explained that 9 out of 10 holiday shoppers have had some kind of new information convince them to make a purchase that they were previously unsure about. Brands are increasingly working to identify when customers are seriously considering a purchase and step in to provide that extra nudge. Similar to offering customer experiences, moving data easily between employees and to end-user apps and services is critical as retailers work to engage customers and help them make final purchasing decisions.

Brands are Getting Strategic About Communications

Retailers have long used everything from direct mail to regular email blasts to send large groups of consumers advertisements and promotions. While these types of communications are still relevant, AllianceData found that many consumers are beginning to tune out mass communications because they are often not entirely relevant to their personal preferences. In response, the trend toward personalization happening around shopping experiences is beginning to extend into how organizations communicate with their customers. Personalized promotions, for example, are emerging as a popular way of getting a customer's attention.

"Many consumers are beginning to tune out mass communications."

Of course, making a personal connection depends heavily on having both the data needed to identify consumer preferences intelligently - for example, being able to differentiate between the types of items somebody regularly purchases for personal use as opposed to those bought as gifts - and having systems in place to get strategic communications out efficiently. Digital transformation is increasingly necessary in helping brands keep up with this pace of work.

Rebuilding Retail Around New Expectations

As brands focus on personalization, timely communication and strategic messaging this holiday season, those points of emphasis are likely to take hold and continue to drive the industry in the coming year. Retailers hoping to stay on top of these trends increasingly need to transform their operations around digital technologies and the capabilities those solutions offer.

Appian can be an invaluable partner here. Our cloud application development platform can serve as a business process management, data coordination and app creation hub. Our low-code app development platform lets users quickly roll out apps to meet specific demands - such as to fit a niche holiday shopping requirement. We offer the underlying systems businesses need to work faster and smarter, letting brands establish strong customer experiences. As the retail industry evolves, the right technology can help organizations get ahead.

Low code platforms are ideal for driving digital transformation.