Retail transformation – who’s managing the tech?

Last week I highlighted in a LinkedIn post the part body-scanning technology seems set to play in the Marks and Spencer retail transformation. I have been talking about this tech for months. It’s one of the examples of the innovation available to bricks and mortar retailers in their battle with on-line.

Body scanning technology

In fact, body scanning offers a solution to the problems of both on and off-line fashion retailers. It does so by effectively eliminating the need for the sizing conventions that are the bane of on-line shoppers and retailers alike. It could also play a key role in retail transformation.

Once a shopper has their scan, all that matters in the pursuit of the perfect fit is the actual measurements of the garments they are buying. If your scan is integrated into your profile held by an on-line retailer you can just click on the garment you want and the platform selects the size that will fit you perfectly.

Benefiting both on and off-line retail

Of course, you need to get yourself scanned, but that’s where physical stores come into play. Once you have your scan the up-sides for the retailer that holds it are obvious. Firstly there’s customer loyalty – customers will be more confident in the purchases made with that retailer.  Customer satisfaction levels will be higher because disappointment will be reduced and the buying process will be quicker and simpler – no returns. This all contributes to stronger customer relationships.  In addition, retailers achieve considerable cost-saving through the significant reduction in returns and exchanges.

This isn’t enough in itself to rescue high street retailing, but it does have implications beyond finding a use for expensive real estate. You also have to consider how online retailers might counter this move? Maybe they could persuade neutral retailers – supermarkets for instance or even shopping mall operators – to host scanning booths? Might it even be feasible for retailers holding the scan to share them with online retailers? There would be a data security issue of course, but I’m sure that could be overcome.

New retail marketing sub-sets

This move might lead to key retailers owning future sizing conventions. It may also provide an opportunity for a new online retailing concept built around the scanning data. Innovation around this core tech would largely concern the authenticity or accuracy of individual scanning systems and how the data was shared or used by the customer.

It seems years since I first encountered the fitting-room mirrors that enabled people trying on clothes to send images of themselves to their friends to canvass their opinion. This piece of tech doesn’t seem to have captured the imagination of retailers. Maybe they think sharing images in this way is too easily accomplished with the smart-phones every customer has these days, but keep thinking you guys. It’s going to take a lot of innovation to fill all those high street square feet!

A more fundamental question

All of this, of course, is a response to the question of how retailers might utilise their real estate, but perhaps this is the wrong question anyway? Maybe the question we should be asking is higher-level.

I’m not alone in pushing businesses to take a more fundamental approach to transformation. We all know many businesses confuse “change” and “transformation” and as a result only streamline existing business models, even if they are heading down a dead-end street. This is what transformation consultants refer to as creating a fast caterpillar. It’s a response that produces a short-term illusion of success. However, it’s short-lived and despite the investment of funds, time and resources, the businesses concerned may even crash sooner than it would have, had it not made these superficial changes.

Owning the retail transformation strategy

Marketing strategy development – and that’s what transformation is – is founded on a straightforward process of identifying opportunity, assessing how the organisation is best placed, with its legacy resource to meet these and working up a plan to fill the resource gaps. This doesn’t change, but what do you do with redundant resources?

The biggest challenge of retail transformation is physical stores. In recent weeks we’ve witnessed retailers who are frantically trying to rescue failed models announcing hundreds of store closures and this will continue. Conversely, even Amazon has recognised any comprehensive retail model needs a physical presence. Real-estate is currently the main differentiator of traditional retailers. If they can’t afford to abandon the High Street altogether, it becomes a matter of balance and the part the space plays in your overall proposition.

You are only as good as your NEXT big idea

Retailers used to be good at innovation. In the days of Ralph Halpern, Burton Group had numerous pilot stores testing out new sub-brands and concepts at any one time. They may all have been variations on the traditional retail theme, but the recognition that any business is only as good as its NEXT big idea was dawning even then.

Today the step-change may be greater, but the principle remains sound. However, today’s retailers are failing to unlock the innovation within their organisations. Innovation is one of the most valuable outcomes of any properly-managed transformation programme and very much to do with the brand community that should be at the heart of every transformation. Maybe it’s time we got back to basic brand development.

Despite everything that’s happening retailers I meet are still talking in terms of tweaking their existing models, rather than creating something new from scratch. The make-up of the support service sector isn’t helping either. It’s fragmented and divided between retail consultancies, store designers, PoS companies of various kinds and tech firms. The project lead role seems to be assumed by whoever is first to the party. However, there’s an in-built compromise in this kind of arrangement, because it means strategy is overly influenced by one of the disciplines. It’s similar in its effect by businesses who treat transformation as an IT project, build their infrastructure and then try and invent a business around it. What’s needed is an independent perspective.

Emerging retail transformation leaders

Sadly, nobody has yet emerged with the overview to coordinate all of these disciplines in the context of a business transformation. Existing retail strategists seem to lack either the necessary grasp of transformation or sufficiently in-depth knowledge of the full range of emerging technologies. However, last week I met a business that has given me hope and I hope to hear an announcement in the next few weeks that may well offer UK retailers, at least, a glimmer of optimism.

As the “nation of shopkeepers” it’s only fitting, after all, that the UK should take the lead on this and I for one can’t wait to see what’s in store!

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