Retail is evolving at unprecedented speed and retailers’ operating models and technology platforms need to keep pace. The retail platform is what can make retail companies the digital businesses of today and the successful commerce businesses of tomorrow.
Retailers cannot rely on legacy processes, since traditional IT infrastructures and applications architecture won’t enable them to provide exceptional customer experience and commerce performance. It’s important for retailers to and move towards a unified and data-centric digital retail commerce platform approach.
So, what are the “magical powers” of the retail commerce platform?
- Converges back-end and front-end systems
- Manages the complex business logic of digital retail transformation across commerce, customer experience and goal optimisation
- Functions as a test environment for innovation and a retailer’s operations environment for profitable omnichannel business models
- Enables improved governance and optimised execution of edge processes
- Provides development and integration services around a rich set of applications
- Provides increased agility, time to value and cost efficiency. However, it is neither a monolithic system nor a customised environment.
- Accelerates innovations and short-term value realisation
The retail commerce platform (Figure 1) provides development services and API-based integration with enterprise services, data services, and consumer services, while delivering business logic and retail commerce services for four core capabilities. At the same time, it’s leveraging artificial intelligence (AI), machine learning, or an advanced analytics foundation. The four core capabilities of the platform are:
- Customer experience services. These help explore the customer context, real-time customer journey personalisation (including loyalty), and customer interface enablement through voice, image, text and augmented reality. This capability provides adapted, yet consistent interface enablement across current and future consumer services, whether human or digital. The customer experience services support contextual customer journey personalisation, help leverage all data – regarding customers, products, location, the internet of things (IoT), and third-party – and processes by composing and delivering highly dynamic services.
- Commerce services. The commerce services provide a single, unified engine to process transactions, from order capturing though configuration and payments to delivery set-up.
- Order-fulfilment services. Retailers get fulfilment optimisation through network-based fulfilment, fulfilment objectives and KPIs (for example: margin optimisation, delivery speed depending on customer), efficient delivery execution, and returns management.
- Content optimisation services. These services provide content management and adaptive, personalised content distribution.
Figure 1: Retail Commerce
Retailers on a global scale are starting to understand the importance and value of adopting commerce platforms. Currently, 46 per cent of mid-size and large-size retailers in the United States and Western Europe are investing or planning to invest in retail commerce platforms in the next 12 to 18 months.
Beauty, one of the biggest cosmetics retailers in the United States, is a digitally determined retailer working with a digital retail commerce platform. The company is investing $100 million in 2018 to further develop the capabilities of a retail commerce platform. The goal is to accelerate the implementation of the platform by focusing on order and fulfilment services, customer experience personalisation, commerce, and AI and data management capabilities. Since Ulta Beauty started to use the retail commerce platform, its stock valuation has increased by 150 percent. Now, it is the biggest beauty retailer in the United States, with over 1,000 stores and 20,000 products. Furthermore, it reported growth in loyal-customer numbers. The company has 28 million loyalty program members, who account for 90 per cent of sales.
Deploying a retail commerce platform is critical for succeeding on the digital transformation path. It is also one of the two building blocks to deliver omni-channel profits now and “commerce everywhere” business models. The other building block is a new customer experience architecture. There’s only a brief window of opportunity to ensure that companies can gain competitive advantage in the era of digitalisation. The time to act is now.