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Half Of Retailers Have A Tech Problem — Here’s What They Can Do About It

Half Of Retailers Have A Tech Problem — Here’s What They Can Do About It

Half Of Retailers Have A Tech Problem — Here's What They Can Do About It

The rise of vaccination rates and relaxation of lockdown mandates has consumers returning to shopping in physical stores. 

Target, for one, saw a 20.7 percent increase in foot traffic in Q2 2021, while wholesale retailer Costco saw a 27 percent increase. 

While consumers’ return to shopping in physical stores bears good news for retailers, they are now challenged with delivering a digital-first experience that blurs the lines between online and physical retail, according to Deanna Traa, chief marketing officer at Bold Commerce

In an exclusive interview with Retail Bum, Traa discussed key approaches that can help retailers meet their customers’ expectations and the technological shortcomings they must overcome in order to succeed. 

With nearly two-thirds of interactions between retail brands and consumers now digital-first, retailers need access to digital tools and technologies that give them a unified view of not just where their customers are spending more time but also their online and in-store inventory, which are important elements to offering a seamless and convenient experience to customers, Traa noted.

Convenience matters — and retailers know it

Consumers today want to shop whenever and however they like it. If they see a product on TikTok or Instagram or read about it in a blog post, for example, they want to be able to checkout then and there without being redirected to the merchant’s site. Similarly, if they shop in physical stores, they want access to contactless shopping and payment experiences. 

Offering such conveniences while also creating differentiated experiences is increasingly key for retailers to drive conversion. According to retail technology consultancy RSR Research, 86 percent of retailers agree that offering more differentiated experiences would improve conversion rates. 

Delivering convenient and unique shopping experiences is not without challenge, however. In fact, 60 percent of “winners,” which are top-performing retailers, identity offering a convenient experience that keeps shoppers from abandoning their purchase as a top business challenge.

According to Traa, it is important for retailers to continually assess every aspect of their customer’s shopping journey, starting from their online and mobile shopping experience to offering the right mix of payment methods that can boost conversion. The use of innovative tools and technologies can go a long way in removing friction and executing a seamless shopping experience, she added. 

It’s all about the tech

When it comes to offering engaging and convenient online shopping experiences, a top challenge that retailers contend with today is their use of legacy technological infrastructure. Forty-nine percent say that their existing technologies are difficult to change. Meanwhile, 43 percent simply lack the resources that are needed for innovation.

“A big part of it comes back to their tech stack,” Traa said, adding that a lot of the technologies retailers are using today were originally designed to support a single channel. Point of sale systems, for example, were designed to work in stores, while websites have long been designed with core functionality in mind.

“In order to offer differentiated experiences, they need to be able to adapt and evolve and iterate based on where customer expectations and behaviors are changing,” she said.

Having access to the right technology has become all the more important today as tech giants such as Amazon and Google have raised the bar and have given consumers a taste for faster experiences, whether they are searching for new products or ordering them for home delivery.

The path forward

Retailers recognize these issues and are taking a hybrid approach to overhauling their infrastructure. Forty percent of them are leaning toward making investments in their existing tech stacks, 31 percent are adding additional solutions, while 29 percent are completely overhauling their infrastructure with new technology, according to RSR.

“Major brands are embracing an API-first approach. They’re in a position that they can connect systems and capabilities that they previously couldn’t, and they don’t have to take big risks to do it,” Traa said.

“You can take one step and then prove out the ROI and then continue along that journey.” 

Regardless of the approach retailers take, their ultimate focus needs to be on upgrading their tech stacks in conjunction with improving their front-end user experience. 

A lack of technological innovation in the backend, after all, negates all the other efforts retailers make to drive conversion, whether it is through social media marketing or an intuitive web design.   

“At the heart of it, brands are competing on experience,” she added.

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