The New Rules of Retail for Rebuilding the Economy

While the pandemic continues, Mark Zuckerberg is expanding e-commerce with a new Facebook service – Shops. By setting up free storefronts, he welcomes small businesses with no previous web presence to get online for the first time. 

Fortune 5000 companies are experimenting with personal digital experiences, new data usage, unified inventory, and price optimization to create an entirely new retail experience.

Digitalization, driven by the pandemic, has transformed the retail world, making an easy and seamless e-commerce experience an absolute necessity for every retailer. How does one approach a new reality and go digital, picking the right horse among a multitude of technology trends?

Don’t expect a return to normal

Retailers should stop expecting business to return to ‘normal’. There’s no way back to how it was anytime soon. Even before the pandemic turndown, brick-and-mortar retailers were struggling against Amazon and similar e-commerce players, in vain. 

Most retailers with physical roots try to replicate their in-store experience online. Still, such efforts are empty as customers don’t expect a digital experience to be like a physical one — nor do they want it to be.

Facebook Shops not only allows companies to sell through social media, but also to become a new personalized shopping destination with peer support, reviews, multimedia, and gamification included. A retailer can use these new opportunities to create a fresh, immersive experience wherever customers are — that’s something no physical outlet can provide.

McKinsey’s latest insights (1) show that consumers are likely to keep habits such as more online shopping and fewer mall visits. It’s evident that the wait-and-see mode should turn into an authentic customer experience. The first step to be made is to reinvent the e-commerce experience — from browsing to researching, selecting, purchasing, and returning/exchanging.

Unless it’s Nike shoe drops or the latest Apple release, customers will no longer tolerate average digital shopping experiences. In most cases, foot traffic to physical stores has dropped. A robust online presence and a consistent digital experience could make all the difference between staying afloat or sinking.

Retail Capabilities Powered by Tech

Retailers have broadened their e-commerce capabilities through data-driven analytics, smart automation of business workflows, AI, and VR.

The first aspects of the retail industry to be transformed by these technologies will be the customer experience and store management. 

Sales, marketing, supply chains, and inventory management will follow next.

Ultra-Personalization

Based on buyer journeys, new technologies can segment customers so companies can satisfy their specific needs. Armed with data, retailers can make offers more intelligent and create more sales funnels. 

The final goal is to provide customers with everything they need at the right time, creating an exceptional customer experience and boosting business performance. According to Deloitte, the next phase in data aggregation and activation will reduce each segment to a single individual. 

Case

American fashion house Michael Kors recently released a series of live stream sessions, including a mobile lifestyle quiz that results in personalized handbag recommendations from the designer. That isn’t the techiest solution but can be useful while you’re attempting to fine-tune each customer profile.

AI 

The global market of AI in retail was worth $712 million in 2016, (according to Research & Markets), and is projected to reach $27 billion by 2025. 

By predicting when the next purchase will happen, AI creates both growth opportunities and a sustainable future for retailers. IBM predicts an increase in the AI adoption rate among retailers to more than 80% in 3 years. 

The areas of greatest opportunity are promotions, assortment, and replenishment. Retail companies will use AI to predict the most optimal distribution of resources, reduce lapses in sales, and maximize profits. Some even aim at the full anticipation of customers’ orders, shipping goods without a purchase confirmation. 

Case

US floorcare company Bissell has benefited from leveraging consumer insights to make actionable business decisions. When the company launched on the Chinese marketplace Tmall and sold out-of-stock, data helped the brand to retain sales. The product-recommendation algorithm targeted consumers according to search interests and shopping behaviors and recommended alternative products.

Chat Bots

There has been rapid adoption of messaging-based customer service bots across retail. Gartner states that 19% of businesses have already implemented a chatbot in 2020, while another 25% plan to deploy virtual assistants in the next year. 

The shift from voice-based customer service to digital is moving quicker than many may realize. The customers now select messaging as the preferred service channel, so the call amount has now dropped by nearly half. To lower cart abandonment and improve customer satisfaction, businesses can use embedded messaging tools, video, or voice-activated technologies.

Case

Footwear company Allbirds launched a feature that enabled Tmall shoppers to connect with store associates via video chat to ask questions and see product displays as if they were at a physical store. It met demand, and the brand is now exploring ways to preserve the feature even after Covid-19.

Predictive analytics

Customers are already being tracked in many different ways. Their personal information is collected at the point of sale, ‘cookies’ can track their movements online, and one click can push an endless line of ads. 

A healthy flow of that information is the lifeblood of customer loyalty programs, price optimization, targeting, and inventory management. Predictive analytics helps retailers be smarter, more efficient, and reduce costs.

Case

Retail intelligence company Upstream Commerce observed that automated predictive and dynamic pricing tools deliver an additional 20% net profit gain compared to partially managed catalogs.

Streaming

Broadcasting allows retailers to communicate with consumers in real-time. The ability to ask questions and receive answers gives the communication a more natural, authentic feel and amplifies the retailer-customer connection. Such authenticity holds great power. This is particularly important, considering that 86% of consumers rank authenticity as a significant factor when deciding which companies to support (Stackla, 2019).

In the coming months, retailers will experiment more with new modes of engagement, including in-store live streams where sales associates engage with shoppers and even fulfill customer orders.

Case

At the height of the coronavirus outbreak in China, wellness brand Viva Naturals launched marketing campaigns across the Alibaba platform. It included educational live streams on various health topics, from which the brand saw a quick surge in sales. Furthermore, that also helped to move Viva Naturals’ strategy forward. The brand is now promoting a new line of immunity-support supplements based on consumer demand.

Here is a short, yet detailed, YouTube conversation with the founder and CEO of TDA, Goran Deak. In this video, Deak discusses how COVID-19 has affected the retail industry; explaining how businesses are coping and, more specifically, how industry leaders can plan for the future of e-commerce in the era of Coronavirus.

Summary 

COVID-19 has broken customer shopping habits and historical trends. This isn’t the time for the retail industry to try to ride out the storm. With a more proactive, progressive approach to digital transformation and a new era of customer service, the future might look less blurred.
The pandemic is causing industry-wide disruption with long-term consequences yet to be fully understood. To survive in the new retail landscape, businesses should invest in unique digital capabilities – including real-time inventory management, predictive analytics, AI-powered search, and personalization. In the right hands, they can create wholly new and different shopping experiences. Erbis can let you become more tech-savvy and stay on top of retail trends.

How To Build A Secure SaaS For Enterprise



The second wave of SaaS adoption is on the rise. Modern enterprises invest in SaaS technologies to lower the cost of ownership, reduce the burden of IT operations, and solve scaling challenges. 

How to stand out among the crowd? Find the answer in our E-Book.

Overview

  • What makes SaaS different now?
  • How SaaS are reshaping enterprises?
  • The latest market news
  • How to become enterprise-ready?
  • Security optimization for your SaaS

About Erbis

We develop custom software for startups, SMB, and enterprises since 2012. Our satisfied clients innovate and optimize their business with our solutions for years. Backed by Cloud computing and the latest technologies, we are ready to join your project at any stage. Our developers can naturally extend your team and jump in within two weeks.

Building Logistics Software For The Future: Choosing Platforms.

If you invested in logistics technology a decade ago, you probably lost the shirt off your back, but that has recently changed with cloud computing, IoT, and blockchain. A lot of that has to do with the companies like Amazon continuously disrupting the market, and other companies like Flexport becoming a unicorn with a $1B investment from Softbank.

COVID times have pushed supply chains to the edge of economic prosperity, being the hunting field for investors. Dave Anderson of Supply Chain Ventures says that recently they look at around 300 startups a year. Once high-end software becomes the need of the hour for your logistics company, you should decide where to stick: buy ready-made software or build from scratch. Let’s weigh the options.

How is Bespoke Software Different from Ready-Made Software?

Let’s define the terms from the start:

Ready-made software is something you can purchase, install, and begin to use instantly, like Jira or Photoshop. Such programs are made for general use and aren’t supposed to adjust to your needs. Also, you’ll never own such software.

Bespoke software is a product delivered by the development team particularly for your business and based on your company requirements. It can be modified and updated at any stage of the software lifecycle to meet changing business demands.

  • Framework: As commercial software is targeted at a wide range of consumers, it has a unified design and a standard frame. The main disadvantage here is that it might not meet your company’s unique needs or won’t be able to distinguish your products/services. A ready-made solution may oblige you to change your workflow to fit in. 
  • Cost: The cost for ready-made apps is divided among many users, while the bespoke solutions are paid by the Product Owner. That’s why prices for commercial software are significantly lower than for the development of custom software.
  • Updates: In the case of ready-made software, be prepared to pay for future updates. Unfortunately, you can’t regulate the price and amount of such updates and may end up with an outdated product in case of non-payment. On the other hand, bespoke software updates are shaped according to your budget and needs.

How To Choose a Framework

  • Analyze your workforce availability and pick a framework according to available human resources.

What developers do you have on your side? Suppose you have to decide on a front-end technology, and you have two strong Angular developers. In that case, you should probably work with those. Moving fast can be valuable, and it’s an advantage to have people who are in their comfort zone instead of learning new technology. Also, actual knowledge of the ecosystem is an additional benefit.

Another approach is to discuss your technology with a generalist. Because if you talk about your project with a Node.js expert, guess what they’ll recommend? 

  • Analyze the challenge.

The chosen technology should depend on the problem you’re solving. Are you a technical innovator, or are you building an innovative business solution? If Facebook is built with PHP – that doesn’t mean you should use it too.

Some things are better function with one language than another — for example, Python is excellent for computation and statistics. The majority of software projects can be addressed with a variety of technology stacks. Only a few tasks require specific approaches to succeed. 

  • Examine IT trends and adopt a long-lasting technology.  

Be aware of industry trends, but don’t select them blindly. Check websites like hotframeworks.com, trends.builtwith.com, and Google Trends to understand where various technologies stand, in terms of popularity over time.

Some huge companies – including Facebook, Netflix, Dropbox, Airbnb, and Reddit – use React for their front-end to scale and handle millions of views per day. Apple Music, LinkedIn, and Square use Ember to convert their native applications.

  • Look for support as the framework should be actively backed by the community or a tech giant for mitigating risks. 

Every technology embraces an ecosystem composed of people and tools. Facebook and the open-source community keep investing in the growth of React, and Google is behind Angular. This means that there should be long-term vendor support until the drop (yes, this happens). But the bigger is the community, the bigger is the chance that things will stay around for some time.

  • Read the Docs for better immersion. 

Choose frameworks with plenty and actual documentation. Start with checking the technology’s webpage for how-to videos and blog: how are updates handled? How easy is the update or to migrate? Have there been incompatible versions (like Angular 1 & Angular 2)?

As a modern developer, you should adopt a mindset of a constant learner and continually improve the delivery model to meet your customers’ increasing demands.

The synergy of front-end, back-end, and accelerators such as cloud, open-source tools, DevOps, and security will give you the edge you need. But in many ways, the most critical accelerator is your mindset.  

How To Choose a Technology Stack for Supply Chain Software: Erbis approach.

Aftermarket validation, the most complex part of the project is selecting tools. Often clients turn to our software development company with a vision of what languages and frameworks they want to use. This would be helpful if they were IT engineers, but they aren’t.

Our 10+ years of experience in custom software development allows us to share our thoughts on the topic.

Framework features that matter: 

  • multi-threading & concurrency
  • scalability & clusterization
  • persistence and ORM
  • transaction support
  • inversion of control and dependency injection concepts and practices
  • batch, scheduled and async processing
  • aspect-oriented programming
  • convenient and standard ways of REST services development 
  • security management inside business logic. 

Java

Over the last decades, Java and Java-based frameworks have been a top choice for complex systems development. Java-based back-end applications possess good qualities in extensibility and supportability. Sophisticated TMS and ERP systems may serve for decades, with the owner’s intellectual property well protected and maintained.

Mature Java application frameworks like Spring or Jakarta EE (former Java EE) include all features listed above to build complex logistic solutions.

Java Script

In the last few years, we’ve seen a rise in JS frameworks on the frontend – and, consequently, on the backend. Using the same language on both sides helps to consolidate the team and balance human resources between tiers when needed. Adopting feature-driven development, you can omit bottlenecks when the frontend waits for the backend, and vice versa. 

Choosing popular JS frameworks will probably speed up the creation of your MVP, but sacrifice the functionality Java has. JS frameworks are still getting these functionality implemented, but they’re not mature enough to rely on when developing the Supply Chain management platform. 

Python

Another player on the market is Python. It is an up-and-coming language that has the power to push Java to second place in this decade. Python’s Django framework holds many of the mentioned above features for developing supply chain software. If you want to put on Python for the perspective – this might be the proper choice.

Conclusion

Things are changing quicker than they did 20 years ago. Your chosen technology will probably stay with you for 5 to 10 years: this is a long time, but you need to prepare to switch technologies when the need arises.

That’s why you should think granular, in little packages. To avoid putting eggs in one basket, we at Erbis consider separating services, back-ends, and front-ends into smaller applications and microservices. Contact us (link) to discuss the bespoke solution that can solve your supply chain’s particular difficulties or benefit from a ready-made solution from our partner.