Connected retail systems integrate digital technology with physical shopping, blurring the lines between the brick and mortar store and online shopping. Also known as ‘phygital’ – this blended approach to digital and physical enables a far broader range of customer interactions and gives retailers the opportunity to streamline operations for maximum retail operational efficiency. Here we take a look at how integrated retail solutions are growing in importance, and the retail operational efficiency boost it offers retailers.

So just how is connected retail enhancing retail efficiency? Here’s our take on the top five retail optimization strategies with integrated retail solutions.

1. Online/offline retail technology integration

Today’s shoppers are channel blind. They don’t think about whether they’re engaging with a retailer through online or offline channels – to them it’s all ‘shopping’. Hybrid transactions are now the norm. A hybrid, or phygital, transaction has many possible forms:

• A shopper checking out the latest styles on a fashion store website, before nipping into their local branch in their lunch hour to try on and buy
• Shopping in the store, not finding their item, but ordering it with the associate on a mobile device.
• Buying online and picking up in the store rather than having the items delivered.
• Ordering online with delivery, returning the item to the store and while they are there, purchase a different item.
• Being sent a personalized message on their digital device and then going into the store to buy – this is a particularly popular form of connected retail with Gen Z, 16% of whom actively want to receive personalized offers sent to their phones when in-store.

The common theme with all these transaction types is they offer a seamless retail experience and deliver what customers demand. If retailers can give customers what they want, they can increase visits, basket size and revenue with great retail operational efficiency.

2. Loyalty

Connected retail can play a big role in driving loyalty – companies with strong cross channel/omnichannel engagement retain on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement.

3. Frictionless retail operations

Frictionless retail operations means making the process of selecting, paying for and receiving goods as straightforward and streamlined as possible. Connected retail systems play a pivotal role: – for example:

• Integrating digital payments and loyalty points
• Helping customers to find items easily with associate mobile POS
• Providing the same online experience on a mobile or desktop.

Frictionless retail operations help to avoid abandoned carts online, or shoppers walking out of the physical store in frustration. It drives retail operational efficiency by avoiding lost sales, allowing associates to engage with customers on the shop floor and sell goods even if they are not on the shelves, which in turn reduces excess stock having to be sold at discount or even scrapped.

4. Automations

Connected retail systems, bring together the digital and the physical, empowering retailers to automate key processes in the store and back office – a major driver of retail operational efficiency. One of the best examples of this is in inventory management. Connected retail systems give retailers a real-time view of stock, automatically updated through connection with the point of sale system. This in turn enables automation of re-ordering, based on reaching a trigger level of stock. Automated reordering eliminates stock-outs, and the associated lost sales.

5. Decision making

Behind every successful business is sound decision making, and that relies on accurate, accessible and appropriate data. Connected retail systems enable businesses to consolidate data from their online and offline operations and use it to create actionable insights. Examples include information about stock levels – and using past history to accurately forecast future requirements; or information about sales activity that enables retailers to plan staff levels; or data about customer buying preferences (through all channels) that inform plans for offers and promotions. Effective decision-making eliminates unnecessary trial and error and gives a significant boost to retail operational efficiency.

In 2024, the seamless amalgamation of the digital and physical elements of retailing are coming together more than ever, enabled by retail management systems. For retailers that embrace the trend, connected retail systems can help them enhance their retail operational efficiency.

FAQs:

What is connected loyalty?

Connected loyalty means that the customer can earn, spend and view their points no matter what the channel they’re using. They could view their points on a mobile app, and spend them in store. They might earn them in store and then spend them on an online transaction. Loyalty systems make customers feel valued and help to drive up spend and advocacy in a highly efficient manner. The better the loyalty program meets the needs of the customer, the more efficiently it does its job – if customers want connected transactions, then a loyalty program that matches that demand will engage them better.

I have a specialist retail operation – how can connected retail help me?

Connected retail systems are not a ‘one size fits all’ – retailers have very different requirements. For example, a supermarket, optician, pharmacy, fashion apparel, thrift store, homewares, electrical or DIY store all have different operational processes. So one of the key ways to drive efficiency through connected retail is to work with a partner that has a specialist retail technology solution for your kind of retail – saving you time and ensuring that your retail software solution meets the needs of your business.

Content Sources:

Medium

Forbes

Porch Group Media

Vogue Business