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The 2nd wave of digital disruption for retail

By / / In Insight /
Retailers are facing another wave of disruption triggered by digital technologies. Find out which retailers are leading the way and why, if you haven't already, you need to start including them in your plans.
disruption for retail

With retailers facing yet another wave of digital disruption (of course disruption is always on BUT there is a coming together right now that means the impact is magnified), we thought we’d take a look at some of the technology and customer trends that are driving this. Underlying it all is the fact that OK is no longer good enough in retail, in fact good is no longer good enough. Consumers expect great. The entitled consumer is here to stay and they expect you to deliver (watch the Louis CK video first if you want the funny take on the serious issues he raises).

Digital disruption for retail: here’s the trends list

1. Connected everything

No retailer will be unaware of IoT, but we believe that retailers need to break this down into more granular areas (while ensuring they still work together seamlessly) in order to understand properly the value and opportunities.

  • Internet of people: Wearable devices and smartphones give retailers the opportunity to deliver timely marketing and service messages to consumers when it’s appropriate, such as when they show signs of intent. Retailers need to find ways of lowering the ‘ad load’ on consumers by being smarter with their targeting. This is one of several tools that they could utilise to do so.
  • Internet of place: Technologies – for example, Smart Wifi – allow retailers to understand things such as the flow of people through a retail environment. This gives insights into what products consumers linger over and finds ‘dark’ areas in the retail environment that consumers are ignoring. Technology platforms such as Purple provide retailers with in-store ‘people analytics’ to help them understand how to maximise the store experience and drive revenue growth.
  • Internet of things: Does what it says on the tin – by having products connected, retailers can offer extra facilities such as instant check-out or the ability to enrich the retail experience with AR/VR applications (see below). RFID at scale, where almost every product is connected, is likely to be only a few years away.

2. Data and the need to offer personalisation at scale

Retailers now have access to an overwhelming amount of data and – as more and more devices, people and places get connected – it’s just going to get bigger. That’s a given. The challenge is what to do with the data that adds value to your business. As usual, the place to start is by looking at what adds value for the consumer  and work out how that value can be translated into revenue and loyalty.

Another area where data can add real value is understanding consumer trends. What they are buying now, what they recommend and what they might buy next are three applications of ‘big data’ in action, for example. FashionAI are using data to track colour and design trends to help retailers understand next season’s potential best sellers.

3. Virtual and augmented reality

Enhancing the consumer experience both at home and in-store is going to be increasingly important. While some companies are investing in these technologies, it’s not yet clear what the ‘killer app’ for retailers will be.

So far, we’re seeing two main use cases for retailers:

4. The rise of the machines

Increasingly, interacting with machines rather than people is going to become the norm. This probably doesn’t mean – at least in any reasonable timeframe – only interacting with machines. Rather, machines will be used where it makes sense, freeing up ‘people time’ to be active where it matters. In retail, there are two areas of focus (I’m not including the possibilities in the supply chain for making, shipping, selecting etc – just the consumer interactions):

Chatbots are already being used more and more and getting greater traction every day; digital helpers are here to stay. The technology might not be perfect yet and not all consumers are ready to move to chatbots (so keep that ‘people’ channel open, too). But the direction is clear; retailers need to be using this tech now – testing, learning, adapting – or they will fall behind the innovators. And if you have any doubts that this is going to be the norm in just a few years, check out Google chatbots’ latest outing in the video below:

In-store robot helpers – some very innovative retailers may try to create robot-only experiences, but this likely to be rare (and probably unsuccessful for now). However, the idea of your in-store staff having a robot helper makes sense. While the robot goes and gets that different size, new colour, matching accessory, your in-store staff can stay with the customer, offering advice and a ‘personal shopper experience’. This retail+ experience might be enough to keep consumers on the high street. Certainly, given the rise of technologies such as VR, the high street and main street experience needs to create an edge – or risk marginalisation.

Digital disruption for retail – the challenge

The above is not a comprehensive list, but my points alone are surely enough to keep retail leaders up at night! Throw in aggressive new competitors, tougher regulation (such as GDPR), consumer apathy to marketing (which sees them increasingly opt out of marketing) and it’s clear that delivering growth will continue to be a significant challenge for many retailers.

A final point to note when it comes to retail disruption is that it’s not coming up with the ideas that’s the problem; most retailers know the problems they face and most have some idea of the answers. However, driving through change in a timely manner is hard.

“It’s not just about bringing up ideas. I’ve worked in cultures like that – nothing gets done. The companies where it works always have stick-to-it-ness.” Chief information officer, multi-billion dollar vertically integrated fashion retailer.

Source: RSR retail disruption report, Jan 2018

It’s clear, given the above, that there will be many more casualties to add to the growing number of famous retail brands killed off by the rise of digital technology, who are simply not able to keep up or are burdened down by legacy technology and high costs.

These issues and many more will be discussed at The Telegraph’s Leaders of Transformation conference on Wednesday June 6 in London, where I will be moderating a panel on The impact digitisation will have on driving customer acquisition and retention, alongside Ross Matthews, chief marketing officer at; Mark Evans, marketing director at Direct Line; and Gareth Hussey, performance marketing director at 02 (Telefónica UK). Join us and receive a 25% discount on the ticket price by registering here using the code LOTGMA.

Craig Hanna
Author: Craig Hanna
Managing Editor at GMA |

Craig Hanna is part owner and regular contributor to the GMA. He is also a product manager at Acquia for Site Studio, a low-code platform for building and managing enterprise websites in Drupal 8 (Craig was a co-founder of what was known as Cohesion before its acquisition by Acquia). Previously Craig established the training and consultancy business at www.econsultancy,com (Now part of Centaur Plc) and was responsible for the launch of their US office..

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