CX transformation is now a top priority for retailers. The demand for better and more innovative in-person shopping experiences is rising, climate change pledges are forcing greener supply chain options, and the need for smarter IT solutions that provide scalability and business efficiency at speed have never been higher.

With PMC recently recognised by ISG as a market contender in CX Transformation delivery, our Consulting Director, Danny Rappaport, examines the key trends and opportunities for retailers looking to transform the customers’ experience of their brand.

The ISG Report examines the key CX trends which we explore below.

Omnichannel retail is the new normal

In the post-pandemic world, the dominant trend is an ongoing growth in e-commerce, and we are seeing an increased demand for channel-agnostic shopping experiences. In the retail sector, this is especially prevalent in grocery, fashion and apparel, and we are seeing these areas undergoing the most digital transformation.

Europe currently lags behind markets in the US and China in terms of technology adoption and digital transformation initiatives. The key areas of focus and investment for multi-channel retailers are new sales channels, such as social commerce, voice commerce, buy-online-pickup-in-store, curb side pickup, home delivery, and buy-online-return-in-store.

Building intelligent supply chains is a must

With the widening of sales channels and increased investment in front-facing customer services, the need for a resilient supply chain is greater than ever.

With far fewer warehouses and distribution centres available in Europe compared with other regions, many retailers are now rethinking their store models to serve as mini-fulfilment zones for digital orders, enabling faster delivery and easier returns management. Retailers are also leveraging AI and automation to improve demand and fulfilment planning.

Understanding and planning for climate change pledges

Europe has pledged to lower carbon emissions by 55% by 2030. This means it is vital retailers start redesigning operation and supply chains to comply with these new laws.

Customers have also grown increasingly conscious about buying healthy and sustainable products that are responsibly sourced, produced and transported. This gives retailers the opportunity to provide clear communications and proactively educate their customers on the carbon-saving initiatives they are undertaking.

Reimagining brick and mortar stores

In Europe, customer numbers in store have increased and there is a definite demand for an in-store experience. However, customer expectations have also increased, and there is a demand for touchless and mobile-app-driven payments.

This presents a huge opportunity to reimagine stores from a CX perspective, tapping into innovative technologies such as augmented and virtual reality (AR/VR) to create interactive experiences, or simply to better equip the customer with knowledge to assist in purchase decision making.

Capitalising on, and unifying data sources to create personalised marketing tools

With digital businesses growing faster than ever before, the digital footprint and volumes of data available are also larger than ever before. For a typical retailer, data on their customer behaviour is often captured in multiple places.

So the challenge lies in unifying and structuring the data in such a way that retailers can leverage it to run targeted and personalised marketing campaigns that enhance customer brand loyalty.

Leveraging the Cloud to enhance digital transformation

Remote working has enabled retailers to rethink their business, and store operations to enable staff to make decisions anywhere and at any time. To support employee productivity, many are migrating their workload and applications to the cloud.

This has also bought about the need to rethink IT investments, ensuring they are as future-proofed and scalable as possible. This growing trend in cloud migration is microservices-led and API enabled, with many retailers now working closely with leading hyperscalers and product vendors to fast-track their cloud migration and modernise their architecture stacks.

The rise of managed services

As retailers are feeling the pressure from the increasing complexities of the IT landscape across its business functions, many are now looking to partnerships with managed service providers. 2021 saw a record increase in managed service contracts, and there is predicted additional growth of 9% in 2022.

As service providers are increasing their AIOps capabilities, there is the ability to rely more heavily on extreme automation, reducing operational costs and increasing the revenue potential for the retailer. E-commerce, finance and operations, supply chain, logistics and IT operations are the most in demand areas for managed services.

Summary

For retailers, the IT landscape is playing a pivotal role in staying relevant and keeping up with the increasing demands of their customers. Retailer reliance on IT service providers might be increasing, but their domain knowledge and ability to fast track digital transformation initiatives is what’s enabling retailers to stay relevant to their customers, and free them up to focus on their core competencies.

 

Danny Rappaport, Director of Consulting

Danny Rappaport leads the technology consulting division of PMC Retail, supporting our clients on IT and business strategy projects. He has a wealth of experience in providing technology and business services to the retail, finance and CPG sectors, and is extremely passionate about our markets and the opportunities that exist for our customers in today’s global digital economy.

Danny Rappaport, Director of Consulting

Danny Rappaport leads the technology consulting division of PMC Retail, supporting our clients on IT and business strategy projects. He has a wealth of experience in providing technology and business services to the retail, finance and CPG sectors, and is extremely passionate about our markets and the opportunities that exist for our customers in today’s global digital economy.