Today's Environment
The store experience is essential to success, particularly as retailers lose market share to assortment and price players like Amazon and Walmart. Retailers such as Ulta, Sephora, Target, and Nordstrom are opening more stores. What are they getting right? They deliver differentiated experiences and have re-imagined the function of their physical space. These new leaders are part of the 89% of companies that see customer experience as the key customer retention driver.
Retailers are funding initiatives to deliver differentiated customer experiences, achieved through investment in in-store technology, people, and processes. Technology development and execution pose the most complex challenges and the greatest area of risk. Executives know that "disruptive technology" is on the agenda but often don't know how to execute it.
How to Integrate the Right Technology to Deliver a Cohesive Brand Strategy
Increase your probability of a return on investment by adhering to these four core principles:
- Knowing when and where to make investments is challenging. Build a portfolio of technology investments that aligns with enterprise strategy, is supported by clear success metrics, and is informed by required capabilities.
- Increase the probability of successful execution with strong executive leadership, business readiness, resource planning, stakeholder engagement, and thoughtful deployment plans.
- Remain flexible to change direction. Use a "test to learn" implementation approach to minimize sunk costs. Make data-driven decisions to re-direct with confidence.
- Don't treat these initiatives as "one and done." Build an enduring capability to assess store experience. Develop solutions to enhance and execute with speed and precision.
Assess the value proposition and current state.
Knowing which in-store technologies to deploy and when requires a deep understanding of the brand, a hard look at the current in-store experience, and a realistic understanding of new capability requirements.
- A company's value proposition articulated through store experience becomes the product. Understanding this allows companies to select technology and amplify their brand. It must be authentic and not a reaction to exciting technology.
- Understanding the current in-store experience provides valuable information about what should remain and where to fill gaps for differentiation. Make the difficult decisions around whether technology will heighten the experience and whether the consumer will embrace change.
- Cross-functionally integrate new technology and processes into existing operations to mitigate development risk.
Set up the right model.
Defining and deploying new capabilities bridges aspiration with execution.
- Start with a clear definition of success. 90% of failed programs need stronger leadership driving the vision. Define outcomes in terms of business objectives, not technical requirements.
- Align the operating model to realize the benefit from the investment. 75% of failed programs have incomplete or partial planning for business readiness. Adapt store operations and process to take advantage of new capabilities—re-align performance metrics to promote adoption.
- Establish an execution function that drives excellence with enabling methods and governance. 75% of failed programs experience delivery issues in the form of vague project plans, poor resource planning, and ineffective dependency management. Building cross-functional delivery teams will mitigate issues.
Test-to-learn and iterate.
- The cornerstone of successful execution is a test-to-learn approach baked into the development process.
- Companies often need to gain more discipline in execution. They rush new concepts to market and test-to-launch. Successful new technology execution requires a test-to-learn mindset that builds critical hypotheses about the experience and the impact of this experience on the company.
- Testing these hypotheses requires time and iteration. Exercising the organizational discipline to change course and learn from testing can reduce execution waste.
Establish an enduring capability.
The capability to continuously assess, identify, test, and deploy should be enduring.
- Customer expectations and the technology landscape will evolve. The skills and capabilities to continuously assess strategy, understand new technologies, and enhance the experience likely do not exist today.
- Focus on building the long-term capability in parallel with the initial minimum viable product (MVP) to create the experience. The result is organizational learning that will support a continuous improvement capability.
The Bottom Line
Store experience is becoming a retailer's most valuable asset, and the deployment of technology can be a powerful tool for developing this asset. Successful transformations feature technology - and execution - that is authentic to the brand and delivered precisely. Continual assessment and new capability maturation can position retailers to realize long-term benefits.
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