Retail and Hospitality

RETAIL AND HOSPITALITY

In an increasingly competitive world, what is giving leading retailers an edge?

Technology providers like Microsoft and its ecosystem of retail partners offer tools that drive end-to-end engagement with the customer – from initial acqui- sition, through strategic early engagement to highly personalised shopping experiences that secure long- term brand loyalty and ongoing repeat business. In the pages that follow we take a closer look at the latest innovations happening within the retail, consumer goods and hospitality markets.

149 FEATURE Defining the perfect customer journey

Truly knowing and understanding your customers with the help of intelligent tools, such as artificial intelligence and machine learning, is the key to delivering the ultimate shopping experience in today’s retail environment, says Microsoft’s Cath Brands

BY REBECCA GIBSON

hy do some online shoppers click on personalised experience for those who shop in a t-shirt, spend a long time looking at the digital and physical stores.” Wit, but leave the retailer’s website emp- Defining the perfect customer experience is a ty-handed? Is it because the t-shirt is too expen- critical step for retailers like Fabletics if they want sive? Is there a low-quality product image and to differentiate their brand from the competition insufficient information to make an informed and achieve ongoing success – regardless of decision? Or is the check-out process too long whether they operate e-commerce sites, physical and complicated? stores or both. Online activewear retailer Fabletics has come “The ‘perfect’ shopping journey is different up with a unique way to answer these questions: for everyone, but all consumers expect it to be opening more than 24 physical stores across intuitive, seamless and frustration-free,” notes the US equipped with devices connected to Brands. “If a retailer has both online and phys- Microsoft Azure to track how customers interact ical stores, they must be fully connected so that with their products in stores. customers have a consistent experience as they “By using ‘brick mining’, Fabletics can get move between channels.” clearer insights into why certain products are The key to creating standout customer expe- not selling – one particular t-shirt might be tried riences, claims Brands, is to establish a ‘golden on frequently, but never purchased, suggesting record’ of every customer to truly understand that there’s a problem with the sizing or feel of their needs and preferences. “If retailers have no the fabric,” says Cath Brands, director of Global idea what drives customers to visit their online Industry Marketing for Retail and Consumer or physical stores, what convinces them to pur- Goods at Microsoft. “Fabletics merges online chase items or what ultimately converts them into and in-store data to adjust its product portfolio, long-standing brand lovers, how can they ever inventories and customer services to offer a truly create the perfect shopping experiences?” she asks.

150 www.technologyrecord.com RETAIL AND HOSPITALITY

Microsoft’s Retail Trends Playbook 2020 sug- promotions and more at their fingertips,” explains Store associates must gests that retailers focus on four key pillars to Brands. “Giving employees handheld devices have access to all the achieve this: know your customers; empower with access to customer and business insights data and tools they your employees; deliver an intelligent supply will enable them to complete daily tasks quickly, need to carry out their chain; and reimagine retail. instantly answer customers’ questions and help daily tasks “Retailers should evaluate sales data to see what consumers to find products in store. All of this factors cause troughs in sales and identify what increases job satisfaction and when employees common denominators make their best custom- are happy, they’re more invested in going above ers shop with the brand, so that they can pinpoint and beyond for the customers, which will ulti- which services to optimise,” says Brands. “Once mately drive sales and brand loyalty.” they truly understand what motivates their cus- Developing an intelligent supply chain is the tomers to buy from their brand, retailers can next vital step in creating the customer experi- determine which tools, technologies and best ence. “First, retailers must look at what is pop- practices will enable them to create the types of ular with their customers and current market product catalogues, inventories, in-store services, trends to put together the optimal product port- delivery and collection options, and marketing folio and inventory,” says Brands. “Next, they strategies that will satisfy their customers.” must explore how they can use intelligent tech- Retailers must also empower employees with nologies to procure these products and get them these tools. to the stores or the customers’ doors quickly.” “Employees are the retailer’s brand ambassadors Once retailers have these three elements in – they’re the ones on the front line who can make place, they have the foundation to build the or break a customer experience, so it’s crucial innovations that will empower them to re that they have access to a holistic view of each imagine the shopping experience. This is where customer and information about new stock, Microsoft and its partners can help.

151 FEATURE Partner perspectives We ask key Microsoft partners how their technologies are helping retailers to deliver the highly personalised customer experiences that secure long-term brand loyalty Photo: courtesy Fabletics of

Cloud-connected screens outside each of the Fabletics fitting rooms track items Girish Avantsa Head of customer “Trying to understand technologies like artificial success at PopcornApps intelligence (AI), blockchain and machine learning (ML) can be overwhelming for retailers, but we can help them find the right tools to unlock “In our experience, incentivising online customers to try out products in stores helps to the power of data and then develop the services reduce shopping card abandonment and increase wallet share. Providing frictionless that will enable them to serve their customers and ways to connect the online and in-store customer experience, while maintaining the context of the customer’s needs is therefore very important. By integrating employees in the best possible way,” comments geolocation solutions with in-store technology, retailers can provide a seamless Brands. “Our ‘One Microsoft’ approach means continuation of the customer’s online journey into the store. Indoor mapping and we have tools that can tackle all the biggest retail connected store fixtures help to set the stage for conversion and create opportunities challenges. For example, we have Office 365 tools for store associates to upsell and cross sell. At PopcornApps, we provide services to to boost productivity and collaboration, Dynamics retailers that connect the digital and in-store experiences to drive increased sales.” 365 for Retail, Microsoft Advertising for effective marketing campaigns, and the Microsoft Azure cloud with its ancillary AI and ML products for capturing and analysing data. Plus, we collaborate with hundreds of thousands of incredible partners globally who build specialised industry-specific products on top of Microsoft platforms.” Major retailers are already using these technologies to redefine the shopping experience. The resultant seismic changes in the shopping experi- Joey Moore ence are making it an exciting time for Microsoft and its partners to be at the intersection of retail Head of evangelism, EMEA and APAC at and technology, says Brands. Episerver “Customers’ needs, expectations and behaviour have changed drastically over the past 10 years and it is now these consumers, not the retailers, “Consumer buying decisions are becoming increasingly complex with multiple who are defining what constitutes the perfect cus- touchpoints leading up to a purchase. Episerver data shows that 83% of tomer experience,” she adds. “Retailers are facing shoppers intend to do something other than make a purchase on the first visit to very real challenges, but new tools like AI and ML a website. Retailers must create compelling experiences that satisfy customers’ are providing them with an exciting opportunity intent to browse for inspiration, rather than making them buy immediately. The Episerver Digital Experience Cloud is a single solution for managing content, to think outside the box and transform the shop- commerce, digital marketing and personalisation in the cloud. It uses artificial ping journey in a way that surprises and delights intelligence to infer the intent of the customer and deliver a useful experience.” both their loyal and potential customers.”

152 www.technologyrecord.com RETAIL AND HOSPITALITY

“One important factor in achieving positive end-to-end engagement with potential and existing customers is by communicating in a personalised and meaningful way. Creating attractive, on-brand and accurate documents, such as purchase orders and invoices, speaks volumes to today’s customer. As retailers gather increasing amounts of customer data, the use of enterprise resource planning (ERP) solutions has become the norm. However, the task of extracting business- critical information for customer communication from their chosen ERP solution and presenting it effectively is difficult. To overcome this issue, Lasernet enables retailers to generate brand-rich documentation such as quotes, purchase orders Michael Rogers and invoices directly from their ERP solution. Using intuitive drag-and-drop functionality eliminates errors and extends the Director of Sales and customer experience beyond the point of sale.” Marketing for the Private Sector at Formpipe

“We’re at a juncture in retail history where the right technology combined with the right strategy gives brands more opportunities than ever to make a sale. According to our latest survey, 80% of global consumers report that social and online adverts impact their buying decisions. Over 70% said digital coupons delivered to their smartphone spur a purchase. At iVend Retail by CitiXsys, we talk a lot about the path to purchase with our retailers, how to connect with potential consumers and how to re-engage past customers. It’s not a single solution. It’s an entire omnichannel retail ecosystem with many parts that are all aimed at fostering engagement. Each iVend Retail product is engineered to harness the power of the digital experience for both shoppers and retailers. The open application programming interface Paula Da Silva platform allows for integration with third-party systems, Executive vice president including a native integration with Microsoft 365 Business of Global Partners and Central. This offers unlimited potential for the entire Alliances at CitiXsys – enterprise to engage.” iVend Retail

“Knowing their customers is key for driving engagement, but this can’t happen if retailers don’t have a full view of all their actions. That’s why we provide retailers with a complete 360-degree view of customers, including their online and in-store orders, returns, support cases and product reviews. Our advanced OrderDynamics Order Management system aggregates customer order data and shopping behaviour into one repository. It also helps to drive engagement through features such as real-time inventory Steve Berkovitz visibility, Buy Online Pick-up In Store, ship-to-store, and ship-from-store to create seamless shopping experiences. Vice president of The system also supports additional retail options, Technology at including the ability to enable customers to buy from OrderDynamics anywhere and retailers to fulfil orders from anywhere. This makes it the ultimate engagement tool.”

153 VIEWPOINT Meeting the needs of Gen Z shoppers

PAULA DA SILVA: CITIXSYS

With the purchasing potential of Gen Z estimated to be up to US$143 billion, retailers are battling to get their share. Digital experiences might be the key to success

s Gen Z begins to flex its buying power, return on investment after implementing an companies the world over are jumping to integrated retail management system, includ- Aadapt to ever-shifting preferences that are ing a 5-10% increase in sales and an over 20% predominately digital and proving to be polar increase in customer satisfaction. opposite to the shopping habits of baby boomers. What’s clear is that, to meet the needs of Gen Z, Recent statistics find that 94% of Gen Z uses it’s not enough just to be omnichannel. Solutions smartphones while in stores to look up pricing have to be integrated, and they have to be done and inventory availability – compared to 41% of well. iVend Retail is versatile enough to handle baby boomers. This means that retailers with a everything from loyalty cards to a single stock pool inventory, and integrates with Microsoft “To meet the needs of Gen Z, it’s not Dynamics 365 Business Central. The solution is sold through a worldwide distribution network enough just to be omnichannel” of certified partners.

real-time inventory count, accurate pricing and Paula Da Silva is executive vice president promotions win out. Also, of all the generations, of Global Partners and Alliances at CitiXsys – Gen Z has the highest percentage of shoppers iVend Retail who want associates to have handheld mobile devices to deliver better customer service. Retailers who place promotions and ads on social media are more likely to be seen, consid- ering that 85% of Gen Z responds to social ads. A further 71% of Gen Z customers respond to geotargeting, so a little push in the way of a well- timed promotion has a high chance of enticing them to step inside. It takes a highly digitised experience, powered by an integrated retail system, to attract Gen Z shoppers to a retail brand. The experience has to be consistent across platforms, and retailers have to be in the spaces Gen Z inhabits, such as social media and smartphones. Customers using the iVend Retail solution from Microsoft Gold partner CitiXsys report several areas of

154 www.technologyrecord.com Experience-Driven Commerce Episerver’s complete Digital Commerce Suite with the industry’s highest ROI

Episerver.com VIEWPOINT Reimagining retail

JUDY MISBIN: CENTURYLINK

Implementing an effective omnichannel operational model requires retailers to have more agile networking infrastructures connected via cloud solutions such as Microsoft Azure

mnichannel retail arose when custom- goal is always to sell the most high-margin ers started actively embracing digital products to the best customers and get them Otechnologies in the shopping experi- to come back, often. The delivery of this kind ence. New shopping habits, like ordering online of successful shopping experience, however, is and picking up in-store, created new expecta- evolving briskly. tions for retailers. This pressure, in combination To grow, retailers are seeing omnichannel with a drive for growth, is making execution of retailing as the strongest strategic mandate. an omnichannel strategy an imperative in the A customer might see an ad online, share it retail space. with a social media circle, get feedback, go to Omnichannel retailing succeeds when cus- a store to see the item and then order it online. tomers can seamlessly transition from online to Increasingly, consumers want to order over the mobile to in-store shopping and back. Today’s web and pick up their merchandise in-store. customers expect strong in-store Wi-Fi, quick Customer expect the experience to be seam- checkout for products ordered online and less across all channels. This is omnichannel interaction with rich media. Expectations for retailing. integration between online and offline channels The omnichannel retailing transformation has never been higher. affects virtually every aspect of retail operations, The bandwidth intensive technologies being including IT and the network. The network is introduced at retail locations exert additional essential to creating new in-store experiences pressures on the wide area networks (WANs) for customers, delivering on new connectivity needs for store personnel, simplifying the pro- “To grow, retailers are seeing cess of moving or opening new locations and cutting costs. omnichannel retailing as the Implementing an omnichannel operational model requires you to have more agile network- strongest strategic mandate” ing infrastructure connected to Azure. You need this capability to do things like streaming video that support them. The network must be con- into store locations, running customer-fac- sidered a core component of any technology ing mobile technologies and in-store tracking transformation to ensure the delivery of an software. Other network-related features of optimal customer experience. The advent of the omnichannel retail include innovations like software-defined wide area network (SD-WAN) virtual dressing rooms and video kiosks. You offers a potential solution for your retail foot- also need their networks to be more dynamic, print. SD-WAN, which virtualises network efficient and secure so they can increase capac- functions, enables you to maximise bandwidth ity without increasing costs. and flexibility so your in-store experience keeps customers coming back. Judy Misbin is Strategic Alliances Director The fundamentals of retail never change. The (Microsoft) at CenturyLink

156 www.technologyrecord.com VIEWPOINT RETAIL AND HOSPITALITY How to find the right retail planning software

KRISTIE DAVISON: RELEX SOLUTIONS

Faced by a barrage of sales-speak and technology terms, retailers can struggle to choose retail planning solutions, but there are some tricks to ensure success

oday’s customers expect to be able to shop typically measure return on investment for clients. across multiple physical and digital chan- When it comes to choosing between different Tnels with ease. Recognising this, retailers solutions, retailers should focus on use case are optimising their existing retail planning oper- scenarios, rather than features and functions. ations to ensure that they can reduce inventory, Retailers must create a list of expectations and labour, transportation and other costs, yet still ask vendors to demonstrate their recommended quickly provide products tailored to customers’ approach based on experience and best prac- personal preferences via their chosen channels. tices. Asking for relevant customer references Many retailers are doing this by adopting uni- early in the process is essential. fied retail planning systems that allow them to To retain a competitive edge as the retail land- leverage all their data insights and support all pro- scape evolves, retailers must look for a solution cesses – from store or warehouse replenishment that fulfilss their current business needs but to pricing and promotions planning – at every more importantly that gives them potential step of the supply chain. Choosing the right soft- to grow and adapt. Vendors should be able to ware, however, can be challenging. Sales pitches ensure their software is easily adapted and be often contain buzzwords fueled with the latest in able to share their technology roadmaps and strategic focus areas so retailers can see what “Success lies in retailers building a new capabilities they can unlock in the future. Most importantly, success lies in retailers strong partnership with the vendor” building a strong partnership with the vendor. Retailers should allow vendors to draw on their machine learning and artificial intelligence, and knowledge and experience to share suggestions retailers often find it difficult to understand the and make the project as successful as possible. tangible benefits of each solution. However, there Finding the right vendor and the right retail are several easy steps they can follow. planning software empowers retailers to reduce First, for new software to add value, it must be costs while maximising product availability and integrated into the retailer’s existing technology a tailored customer offering. Retailers using landscape, so involving the right business stake- Relex solutions, for example, significantly reduce holders and including the IT team from the outset waste, increase the availability of relevant stock, is a must. Retailers should then identify their objec- optimise sales opportunities and boost opera- tives, quantify their business case and outline how tional and employee efficiency. they will drive measurable value from the solution. They can seek vendors’ input on which solutions Kristie Davison is a sales manager at best suit their requirements and ask how they RELEX Solutions

157 PROFILED: MARKS AND SPENCER Sparking a digital-first retail experience

British retail giant Marks and Spencer is working with Microsoft to implement the latest technology and become a digital-first business

recent study from Capgemini titled Building The Retail Superstar: How Aunleashing AI across functions offers a multi-billion dollar opportunity found that retailers are expected to spend around US$7.3 billion on artificial intelligence (AI) each year. The industry is lucrative and rewards those who capitalise on the technology, enabling savings of up to US$340 billion. One business who is making particular efforts to use AI is Marks and Spencer (M&S). The British clothing, homeware and food retailer is implementing Microsoft technology such as machine learning and computer vision across all touchpoints – in store and behind the scenes. “M&S is transforming into a digital-first retailer at a time when the sector is undergoing a alerts to appropriate staff, enabling M&S to customer-led revolution,” said Steve Rowe, chief track, manage and replenish stock levels and executive of M&S. “We want to be at the fore- deal with unexpected events. front of driving value into the customer experi- Another way Microsoft can optimise the ence using the power of technology. customer experience is through the physical “Working with Microsoft to understand the full location of products in store. One aisle may be potential of how technology and AI can improve congested due to the popularity of its products. the in-store experience for our customers and Microsoft’s cognitive services can assess this the efficiencies of our wider operations could be and create a solution, such as moving prod- a game changer for M&S – and for retail.” ucts to a different section of the store. In this Through its collaboration with Microsoft, every instance, technology can help M&S satisfy surface, screen and scanner will create data. AI demand by having the right products in the will then gain insights from it and enable employ- right places and improve the store design and ees to make decisions. M&S aims to combine product promotion. intelligent edge devices with Microsoft Azure- “We firmly believe that AI has the power to based to improve the customer experience and amplify human ingenuity,” said Cindy Rose, enhance operations for optimal productivity. chief executive of Microsoft UK. “The retail One way the retailer aims to do this is through sector is one of the most challenging landscapes computer vision. Cameras can spot when an in the UK right now and we are thrilled to be item is dropped, resulting in an unexpected working with M&S to explore how AI can help stock reduction. The computer can then log such an iconic brand transform the customer an entry in the stock system and communicate experience and improve wider operations.”

158 www.technologyrecord.com Integrated Omnichannel in Action 2019 Shopper Trends

01 04

Mobile Commerce Loyalty and Rewards mCommerce is an 74% 94% Shoppers are in love with omnichannel best practice. If shop on a mobile shop with a earning rewards. A loyalty you aren’t in a shopper’s device while retailer because program is highly beneﬁcial to shopping in a store of a loyalty smartphone, you can’t be in program the bottom line. their heads and wallets. 32% 85% prefer using a retailer’s use loyalty rewards to get mobile app discounts and freebies 02 05 53% 62% BOPIS are likely to Digital Coupons use BOPIS respond to a to avoid geofenced ad Combine the best of both shipping Paper coupons are safely in the worlds for shoppers. Online charges 69% past. Shoppers respond to shopping plus in-store pickup 76% make purchases digital passes when delivered at provides convenience and of shoppers have picked because of the right place and time. up an online order in a social media or instant gratiﬁcation. store online ads

51% 31% 03 to lookup want to pay 06 inventory/ via mobile product wallet In-Store Mobile Devices availability Check Out Employees with tablets is a 45% 85% Shopper experiences at the customer service win. 84% of value a quick checkout make or break retailers. for mobile and easy consumers look for store checkouts checkout Delight shoppers with associates with mobile convenience at the checkout technology. Why? counter.

Integrated Omnichannel with iVend Retail iVend Retail’s management system is a full suite of integrated solutions from point www.ivend.com of sale to digital coupons and loyalty cards, all enhanced by an open API platform www.ivend.com/partners that allows for full integration with Microsoft 365 Business Central. [email protected] iVend Retail is sold through a global network of certiﬁed partners. We’re currently expanding our network and looking for qualiﬁed professionals passionate about B supporting their Microsoft-powered customers. Contact us to get started.