With the rapid growth of online shopping, retailers are revamping their traditional business models to remain competitive and profitable, placing a heavier emphasis on strategic technologies and mobile-centric solutions, while also reconfiguring the role of brick & mortar stores in their broader brand strategy. 

To learn more about the shift occurring in the industry today, the top digital challenges retailers continue to face, and the technologies driving meaningful business results, I sat down with Patrick Groot Nuelend, Solutions Architect in EMEA at Extreme Networks, who has over 20 years of experience in the IT and Enterprise Networking field and has spent extensive time working with retailers.  He shed light on the exciting, evolving dynamic in retail today – and how we got here

My questions for Patrick and his answers are below, in an edited version of this conversation.

Question 1: Based on your experiences working in the industry, what are the keys to success in retail today?

There are many keys to success for retailers today, and a variety of ways to go about finding success in today’s industry landscape.  At a high-level, if I could boil it down to three commonly-held keys to success they would be:

• Knowing your customer! Collecting meaningful data – not just collecting data for the sake of it – but then using this data in the right ways.
• Getting Logistics Right: it’s critical to drive convenience, complementing the value of online retailers. Customers are now conditioned to expect it; if at all possible, retail brands need to push toward blending all their channels (in-store, online, social, app, etc.) into a consistent experience.
• Delivering an Optimized Customer Experience!

Question 2: From the operations and customer standpoint, respectively, how have these keys to success changed in the last five to ten years?    

The immediacy and inherent convenience of technology has created more demanding customers.  They want more from retailers than just a physical (or virtual) space to buy a product; they expect retailers to know what they want, when they want it and have the necessary tools in place to deliver on the spot. 

This may include developing more mobile-centric services, providing tracking transparency online once an order has been placed, or offering seamless support should a customer need it.

The operations of an organization must keep up with innovations and industry trends.  It’s great to roll out a customer-facing program, but if you do not have the back end framework and systems to tie it all together it could easily fall flat.  It also means build open, flexible, and scalable solutions that easily grow and evolve with the transformation of the business.   

Question 3: One of the findings in a recent Gartner report, 2019 CIO Agenda: Retail Industry Insights, observed the retail industry has finally seen a growth in their digital maturity; meaning, retailers are finally moving past the ‘initiating’ phase of digital rollouts and are now entering the ‘scaling’ phase.  Do you find this to be true in your experience, are retailers becoming more sophisticated in their digital strategy? 

Absolutely. The keys to success (discussed above) have led retailers to focus and invest in digital transformation, to build a foundation for innovation and growth. Digital technology has quickly become a key part of any retailer’s operation, from the storefront, to the in-house assets, to the distribution center or warehouse, and beyond!   

Question 4: Can you describe some specific use cases of innovation you’re seeing that focus on delivering excellent, value-added customer experience? (i.e. AR/VR, wayfinding, mobile marketing, etc.)

Because it’s such a dynamic, fast-pasted, and exciting time in the industry there’s a lot of really cool examples of customer-centric use cases.

Some of the customer-facing use cases focus on elevating convenience and establishing a frictionless experience for customers, like self-checkout solutions in-store, the deployment of digital ‘smart’ shelves, and curbside pickup.  Other use cases employ forward-thinking technology like augmented/virtual reality to enhance the onsite experience such as virtual mirrors in fitting rooms or allowing customers to experience clothing in poor weather conditions.  Retailers are also revamping their mobile services and customer-facing applications by incorporating personalized product recommendations, in-store wayfinding, and location-based promotions. 

Question 5: On the operations and assets side of the business, what are a couple of impactful digital use cases you’ve seen that enhance a retailer’s operations and/or their assets (devices, workforce, etc.)?

As the store of the future is having a more prominent part in the whole supply chain of the retailer, it’s vital for them to have real-time visibility of their stock, assets, and workforce. RFID is being used more frequently for stock control and inventory applications, while mobile technologies such as enterprise smartphones and tablets are introduced for improved workflow operations, the flexibility of store functions, and communications between staff members and customers. Asset tracking (for such items as containers in the storeroom and warehouse) are also being addressed through technologies such as RFID, beacons and Wi-Fi tracking.

Question 6: Of the use cases we’re observing in the space today, which trends do you feel are ‘here to stay’ and which aren’t future proof?

Retail mobile apps are here to stay but will need new, additional functionalities to attract the customer, such as in-store gamification, mobile check-out, wayfinding, and AR. Create seamless in-app journey. In-store VR will probably stay more experimental as it requires more dedicated hardware and software.

Customers want more from retailers than just a physical (or virtual) space to buy a product; they expect retailers to know what they want, when they want it and have the necessary tools in place to deliver on the spot.

Patrick Groot Nuelend Solutions Architect, Extreme Networks

Question 7: Outside of some of the use cases already mentioned, what do you think it on the horizon for the retail industry?  How will existing trends continue to evolve, and what new use cases do you predict will emerge?   

Online and offline channels will be further integrated into a seamless shopping experience, where everything comes together on the shopper’s smart device. Through the use of Social Networks and brand apps, retailers will build more personalized experience and through AI/ML be able to predict shopping behaviors.

Question 9: In your experience, what are some of the unique aspects of the retail industry (for shoppers and brands) in the European market?

Despite the existence of the European Union and the Euro Area, there are still many differences between European countries on different levels (cultural, economic, etc.) In regard to retail, some of the key differences are:

• Payment: while some countries have been transitioning strongly towards debit & credit cards, other countries (e.g. Germany) are still heavily dependent on cash. While electronic payments can bring advancements in terms of speed and process at the checkout, it can also create challenges around security and regulations, e.g. PCI compliance.  
• Labor Cost: average hourly labor costs still vary significantly between European countries, especially between western and southern/eastern European countries, although in general labor costs are increasing almost everywhere. The challenge has now become how the retail sector can cope with these inflated expenses. The first response is typically to increase selling prices and pass the additional costs onto the shopper.
• Security/Privacy Concerns: especially with the introduction of GDPR, both businesses and individuals are more focused on security and privacy concerns. Again, the impact may vary from country to country; e.g. in Germany, there’s an even more strict culture towards handling of data and personal information.  This has also an effect on the acceptance of things like IoT, public cloud, etc.  

Question 10: What is one ‘bold prediction’ you have in the retail market for the next 1-3 years?

Customer Experience (CX) and personalization will become the cornerstones of success in retail. Retailers will need to strongly invest in new technologies in order to keep up with e-commerce, with things like:

• Artificial Intelligence: being able to better inform customers, predict their needs, create more intimacy. AI can help to put the wealth of data that many retailers have into action and create a more personalized experience for the customer.
• Digital wallet: being able to purchase (and pay for) any goods, through any channel in a seamless, frictionless way will become key. Technologies such as Apple Pay will allow customers to use their smart devices for every part of the shopping journey.
• Voice: interaction between retailers, either online or in-store, will increasingly be driven through intelligent voice technologies (digital assistants, chatbots, intelligent speakers, etc.)

In his current role as Solutions Architect EMEA at Extreme Networks, Patrick advises strategic customers and partners how they can leverage Extreme’s Software-Driven Networking solutions to support their Digital Transformation initiatives in order to achieve an optimal business outcome. Patrick gained over 20 years of experience in the IT and Enterprise Networking field in services, pre-sales & product management roles at different companies such as Symbol, Motorola and Zebra Technologies. Patrick holds a BS degree in Computer Technology at the Hogeschool van Arnhem en Nijmegen. In his spare time, Patrick enjoys playing keyboards in his amateur rock band.

To touch base with Patrick, or follow his work in IT, retail, and more, connect with him on LinkedIn.