Now is the time for retailers to buy into a post-physical, digitally-transformed landscape

By Ali Rezvan, Retail Executive at Microsoft UK

Retail is at an inflection point.

A trend for online shopping that took off with the dotcom boom in the late 1990s and early 2000s and picked up pace during the 2008 recession has been turbo-charged again by the pandemic.

The result? Consumers no longer just expect a shopping experience that’s fast, personalised and “always-on” – they demand it. What was once considered cutting-edge customer service is now the norm. For retailers, this means they have to speed up their digital transformation to meet the needs of their customers or risk becoming obsolete.

The digital shift

Shopping online soared during the pandemic and its associated lockdowns. With people unable to head to the high street, they opened retail apps and logged on to websites from the comfort of their sofa.

Research shows that people love the convenience of online shopping and how easy it makes the experience of buying products, from personalised recommendations to the ability to see in real-time which items were in stock.

The Centre for Retail Research found that e-commerce is the fastest growing segment of the retail market in Europe and North America. Combined e-commerce sales in Western Europe (the UK, Germany, France, Netherlands, Italy and Spain) grew more than 128% between 2015 and 2020 to £347.65bn.

As pandemic restrictions eased and people returned to retail parks and high streets, they expect the same shopping experience in-store as they had online. This used to be called “omni-channel” by retailers – providing products to customers in different ways and at different times in their purchasing journey. Today, there’s just one channel: the brand itself, which is providing a single, always-on, personalised experience for the customer that flows seamlessly through the online and physical retail environments.

That could create problems – and unhappy shoppers – for retailers who don’t have a digital-first approach to their business.

Combined e-commerce sales in Western Europe grew more than 128% between 2015 and 2020 to £347.65bn

What does “one channel” look like?

Let’s look at a clothing store as an example. When a fashion-conscious customer walks into a shop they want two things: items they know will look good on them and are available to buy immediately. What they don’t want is to wait for those things.

Traditional retailers, with lots of racks of clothing and a limited digital operation that requires staff to manually go and look to see if they have products in stock, will struggle to keep customers happy in this scenario. It takes too long and there is too much uncertainty for the shopper.

The retailers that will thrive as people head back to the high street will be those that have an intelligent, digital system that enables a constant flow of information drawn from multiple data points, including their e-commerce operation and their bricks and mortar stores.

Here’s how this might work in an in-store shopping experience – A customer scans their reward card or “checks in” to the store using a digital screen. Doing this means that if they need help, the store staff have access to recent purchases the customer has made and can also suggest similar items. Customers and staff can look at stock levels in real-time and, if a product is sold out, it can be delivered to that person’s home the same day. This can be done on a Surface device the employee uses to ensure they can move around the store and offer assistance, instead of being stuck behind a till all day.

But don’t worry about that item the customer wants, the store probably does have it in stock because the connected digital system is drawing information from multiple sources and has seen that this particular product is very popular in that area and has alerted the manager, who has ordered more of them to sell in the physical store.

The store has the right products, in the right place, at the right time, creating a quicker, easier and more personalised shopping experience for customers.

A cloud-first approach

This digital system is built on data and the cloud, with built-in security offering peace of mind for businesses and their customers – consumers want fast, personalised and reliable shopping experiences but not if it will put their money or personal information at risk.

Microsoft is providing this digital network to retailers large and small across the world today. Dynamics 365 gives companies an overview of each part of their business; data flows into Microsoft’s Azure cloud and sits in a data lake; powerful artificial intelligence tools can look at that data and provide insights for company staff to act on; BizApps can automate some of those tasks, freeing staff up to work on more complex tasks.

Microsoft’s Cloud for Retail pulls together many of these into a single solution tailored to retailers. It helps businesses maximise their data, elevate the shopping experience, build real-time and sustainable supply chains and empower employees.

Alongside this technology, retailers need employees with the right skills to implement and run it effectively. Upskilling staff through training and courses is critical, so visit Microsoft’s Digital Skills Hub to learn more.

Digital transformation at leading UK retailer

One company that’s doing this well is Frasers Group, which owns brands such as Sports Direct, Game Retail and Flannels.

Employing more than 25,000 people in 25 countries, it connects its diverse business with a three-pillar strategy around its brands, digital offering and physical stores. These are supported by a focus on people, systems, automation and data.

Frasers is adopting Microsoft tools and service across Azure and Modern Work clouds to enable its digital transformation journey. It’s unlocking cutting-edge security through the Microsoft Security portfolio, while retail stores use Microsoft Teams and Surface devices to support communication and collaboration among staff.

It’s a great example of a joined-up business that’s using digital tools to unlock new possibilities.

Make a connection

When it comes to digital transformation, retailers should look at quality over quantity. Technology is only an asset if it’s used to solve real-word problems within a business. Connect your business with the Microsoft Cloud, see your business with Dynamics, understand your business with data and AI tools and communicate with your business using Teams.

Connecting up your business is the best way to make sure your customer connects with you.