The Irish Times Special Report – The Future of Retail

Conor MacManus, Director of Technology Consulting, recently featured in The Irish Times Special Report – The Future of Retail.

Bricks and mortar retailing far from dead - but now it's just part of the mix discusses how although online shopping has grown significantly during Covid-19, consumers continue to return to the shops at the soonest opportunity.

“Covid pushed a huge amount of people online,” says Conor. “They had no other choice. We work with a lot of clients in the retail sector and many of them have pivoted to online retailing. A lot of them were already set up for online selling but had not taken it very seriously as Irish people like to go into stores.”

He points to some impressive statistics to illustrate the retail response.

“Over 5,500 new e-commerce sites were set up in Ireland during 2020. The figure for the UK was 85,000. They had no other way of selling and they now have two sales channels. It was thought people would default back to bricks and mortar. We’ve seen some of that, but a lot have remained online as well.”

This will lead to a fundamental change in the nature of the bricks and mortar retail experience, he believes.

“For example, Currys in the UK are rethinking the purpose of the store in a world post-Covid now that customers can get advice from experts virtually. Their stores have to be experiential, and they are creating 20 gaming centres where customers can go in and play at their stores. In Paris, LVMH has spent close to $1bn to refurbish the Samaritaine department store as a new all-in-one shopping, dining and tourist destination.

“Is retail dead? Not at all. Has it changed? Yes. But change was coming anyway.”

Despite consumers strong characteristics in supporting brick and mortar retailers, Moving the shop online: When it makes sense and how to make it work explores digital-first strategies organisations can utilise when making the move online.

Conor notes that digital-first strategies aren’t confined to the online world. “Amazon is steadily deploying more and more of its automated convenience stores,” he says. “It now has five in London and 14 in the USA. There are cameras with AI along the aisles which spot what you pick up, and you get a bill when you leave. And there is a bunch of start-ups trying this and other approaches.”

The importance of product recognition has increased with the aid of AI and machine learning. “The two central questions of ecommerce, and indeed any retail, relate to logistics and discovery – how do I get it, and how would I know it exists?” says Conor. “At any given moment, buyers on the web see shopping inspiration – new fashionable trends, seasonal tablescapes, and artful shelfies. But in many cases, we see something we want but can’t figure out how to buy it or even check it out. AI and machine learning can answer questions like what is that product that I see in an image or photo? Where can I buy it? What else might I like?”

Product recognition is among the most important ways to make it easier for people to shop online, he continues. “If AI can predict and understand exactly what’s in any given picture, then people could choose to make any image or video shoppable. People would more easily find exactly what they’re looking for, and sellers could make their products more discoverable. Facebook is already using AI to build the world’s largest shoppable social media platform, where billions of items can be bought and sold in one place.”

Data on consumers an increasingly precious resource for retailers examines the importance of data and gathering it correcting due to GDPR.

Conor discusses the importance of knowing what your customers aren’t doing, not just what they are.

“If 1,000 people walked into your shop and only two of them bought, you’d be worried,” says Conor.

“You have to look at the online store in the same way. Being able to operate seamlessly across myriad online and offline channels makes business sense. It relies heavily on data unification, giving retailers a single view of the customer from email to website to store, for example. This is challenging when a retailer often holds multiple records for one person due to the numerous touchpoints used by the average customer when interacting with a company.”

Bringing that data together is crucial. “The ability to unify this into a single truth gives the company a view of each person’s journey, arming the retailer with insights to drive the behaviour of customers and enhance their experience across the brand,” he adds.

This means the retailer has to know exactly what data they have, where it is stored, how it comes together, and where it does not.

“The companies that are successful in omnichannel are those that start with a basic review of what they want their data to do, how they’re collecting it, and how they’re using it. You need to build a clear view of your customer data and a clear view of the customer journey and ensure that the most important journeys are as frictionless and easy for customers as possible.”

Finally, Lifelines for a sector struggling following lockdowns reviews the wage support and online retail scheme that have provided vital support for retailers.

The Covid-19 Online Retail Scheme offered grants of up to €40,000 to help Irish-owned retailers to enhance their digital capability and to develop a more competitive online offering that would help increase their customer base and build a more resilient business in the domestic and global marketplaces.

Grants are issued on a competitive basis following proposals from retailers. The successful applicants received funding ranging from €14,080 to €40,000 with an average grant value of €37,500.

“Minister [of State for Business, Employment and Retail] Damien English extended it to €6.3 million after the initial funding awards were made,” says Conor. “That enabled an additional 40 applicants to get through, so 173 were successful in the end. The take-up for the scheme has been very good. We worked with a number of clients on it and a lot of very good project proposals were submitted.”

For more information on how BDO can help your business navigate the future of retail, visit our page here.

Content adapted from The Irish Times.

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