An analyst from GlobalData is warning retailers not to rush into completely replacing face-to-face customer interaction with digital technology.
GlobalData digital retail analyst Andreas Olah warns that as technology is becoming a major competitive differentiator, retailers should look to complement traditional ways of customer interaction, rather than completely replacing them, to provide a successful experience.
Technology has already transformed how retailers operate, as well as how they connect with and provide services to customers - retailers are integrating customer records, interaction details and metadata to understand customers' psyche and identify issues that prevent them from completing purchases.
Artificial intelligence (AI), mobile apps, chatbots, digital assistants, predictive analytics and interactive in-store kiosks are also being deployed, not only to achieve better customer interaction and loyalty but also to save costs.
"Deploying interactive self-service kiosks and customer service robots can improve the customer experience but technology does not fully replace the human element, which remains important for creating a pleasant shopping experience. Moreover, interactive tools such as retail chatbots still need to hand over more complex cases to human agents if they cannot solve tasks independently," Olah says.
"Seamless combination of channels is the key to success because customers expect the same level of service from online platforms, mobile apps, in-store kiosks and human sales assistants. They should not be pressured into using the more cost-efficient digital channels, but need to be encouraged by providing them with value while maintaining the ability to speak to store staff if required." He also says to be aware of the hype and enthusiasm for more sophisticated apps and chatbot-fueled customer services as retailers' needs can vary widely.
While fashion retailers are more likely to promote personal styles and brand identity, generalist retailers and those selling standard goods such as groceries and even consumer electronics focus more on product information and practicalities such as tracking deliveries and easy returns of any faulty items.
Technology vendors and system integrators have the opportunity to guide retailers in their journey to finding the right solutions, using AI and analytics to address various challenges such as the need to profile customers, achieve greater personalisation, understand market trends and improve operational efficiency.
While some retailers will take it as far as operating checkout-free stores or going online only, others will create shopping experiences with a strong brand identity and a loyal customer base.
"Finding the right solution for more advanced and innovative retailers can be daunting and requires more sophisticated analytics and benchmarking against competitors, for which consultants with retail expertise are needed," Olah adds.
"Our survey of retail decision-makers has found that differentiation by vertical is as important as technology leadership and financial stability when choosing IT solutions vendors.
