How Tech can Simply Enable Retail?
I work with Mekong Capital as a CTO-in-Residence or Enterprenuer-in-Residence and I cause progress in our Vision Driven Investing framework mainly focus on Digital Transformation, Customer Driven, KPI, Management & Financial Reporting and Bonus together with our deal teams. You can read more about our Agile implementation Private Equity in here as well. Mekong Capital is giving me the chance to learn retail, distribution, consumer financing and education which is extraordinary.
In this post I will share my thoughts and learning on how technology can enable and empower a retail or consumer oriented businesses. Also I will share what is the Design Pattern for a retailer to be successful. Before going to the retail successful pattern, let's see what is design pattern in software engineering.
In software engineering, a design pattern is a general repeatable solution to a commonly occurring problem. A design pattern isn't a finished design that can be transformed directly into code. It is a description or template for how to solve a problem that can be used in many different situations. Design patterns can speed up the development process by providing tested, proven development paradigms. Effective software design requires considering issues that may not become visible until later in the implementation. Reusing design patterns helps to prevent subtle issues that can cause major problems and improves code readability for coders and architects familiar with the patterns. So, what is the design pattern in order to cause a retail to be successful, it is here:
Retail Design Pattern
Retail = Unlimited Loop of [ Execution + Generate Data + Analytics + Experiment]
Implementation of above pattern requires several enablers but the most important one and critical success factor would be Digital Transformation, meaning systems that can cause the company to execute, generate reliable data, analyze data generate learning in order to experiment. Above design pattern can work for any business that is consumer driven. There are various technology categories that can be enablers of implementing "Retail Design Pattern". I've created the below draft Retail Technology Architecture (or blueprint) that each retail will need to work on its Digital Transformation as it scales in its business. Following figure, this is a blueprint or a Software architecture that a retailer need to work and transformation its Digital Transformation and Engineering department as it sales up. This architecture will help to implement the "Retail Design Pattern" which was
Retail = Unlimited Loop of [ Execution + Generate Data + Analytics + Experiment]
The definitions some of the retail technology categories are as follows:
Online to Offline Payments: Companies that are changing the way we pay for goods. In addition to payment execution, this also includes companies that provide consumers with a mobile wallet (e.g. payment information, loyalty cards) or other digital storage functionality (e.g. receipts).
Marketing Platforms and Customer Relationship Management: Companies that enable merchants / brands to engage with their customers across social media channels, and execute and manage marketing campaigns. This category also includes customer relationship management tools used to improve customer communication, tracking, and overall relations.
Retargeting: Companies that use cookie data to follow online users and serve dynamic, relevant ads all over the web.
Made-to-Measure Customization: Companies that use proprietary technologies and supply chain processes to enable shoppers to create custom goods. Examples include clothing fitted to exact specifications.
Loyalty Programs: Products that provide or power a merchant’s reward / loyalty program. Examples include digital frequent shopper cards, and tailored rewards based on spending.
Social Discovery: Companies that allow for discovery of products through social sharing and location check-ins. Examples include discovery social networks as well as platforms with integrated ecommerce functions.
Physical Store Analytics and Indoor Mapping: Companies that use sensors, cameras, and mobile devices to provide retailers more data about customer behavior in-store such as window conversion rate, customer dwell time, optimal shelf placement, and ideal store hours. These companies help retailers optimize the customer experience to increase revenue.
Local Incentives: Companies that help stores increase loyalty, customer base, and revenue from both new and repeat customers through deals, local offers, discounts, frequency rewards, gamified badges, and other techniques.
Search and Local Availability: Companies that provide the means by which consumers can search and/or compare local availability of products and prices. This includes innovations such as store-level inventory searches and local comparisons.
Local Daily Deals: Companies that sell locally available, pre-paid vouchers for steeply discounted goods and services. This category also includes daily deal aggregators.
Local Advertising Technology: Companies that alert the consumer of a retail product or service. The advertising models in the O2O market often center around targeted ads, real-time mobile ads, retargeting, dynamic ads based on proximity to clear inventory, ads targeted based on check-ins or social comments, and in-store up-sell ads.
Retail Augmented Reality: Companies that enable consumers to interact with products using augmented reality (e.g. virtual manipulation).
Last Mile Logistics: Companies that are innovating on the last phase of the supply chain, from the store/warehouse to the consumer.
Point of Sale Payments: Companies centered around payment acquirers, providing physical payment solutions for brick-and-mortar businesses and organizations. Examples include mobile point-of-sales (POS) systems and POS innovations (e.g. QR code, palm scanners).
In-Store Management: Companies that aim to improve the productivity of brick and mortar sales associates. Examples include productivity apps that track their effectiveness in-store as well as apps that provide them with insights to better do their jobs.
In-Store Experience: Companies that enable brick and mortar retailers to enhance the customer journey through digital engagement, mobile-first initiatives, gamification, and more.
Infrastructure and Enablers: Companies that provide tools designed to help developers increase functionality in their existing products. Examples include payment integration, native smartphone applications, and website development.
Price and Feature Comparison: Companies that empower consumers to compare product prices at different outlets or compare features across similar products (e.g. scan and engage capabilities for QR codes, bar codes, or physical items to bring up product information and comparisons in real-time).
Data and Analytics: Companies that help with the acquisition, organization, and distribution of data that companies can then utilize to enhance their applications and service offerings. Includes inventory management software.
Coupons: Companies that focus on both traditional and digital merchant coupons.
Automated Personalization Platforms: Companies that work with retailers to deliver custom ads, marketing messages, and dynamically optimize site pages for different users. Examples include platforms that allow A/B testing and platforms that tailor websites to each individual user’s specific tastes.
Product Recommendation: Companies that use crowdsourced data, individual stylists, and/or automated algorithms to determine the best products for a given shopper based on their individual preferences.
There are plenty of tools and many reports like below figures are also available in above and many perhaps other categories too.