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Retailers race to ‘out-delight' with remarkable customer experiences
How to innovate with data by delivering real-time insights at the edge
Table of
Contents
Customer satisfaction is no longer enough Integrated omnichannel experiences: The new retail frontier A view of the future Connecting digital and physical worlds Two retail transformation accelerators Four superior customer experience pillars The Challenge: Today's architectures are siloed For remarkable outcomes: Simplify your edge Ready to delight your customers?
Customer satisfaction is no longer enough
From fast-moving consumer goods to financial services, the online revolution has transformed retail. Customers love fast, personalized, frictionless experiences and want more.
Now the challenge is to blend the online experience seamlessly into physical stores. Doing so requires the ability to understand customer behavior, predict demand and position inventory optimally.
Incremental innovation will not enable retailers to transcend the limitations of traditional retail experiences. Today's retail disruptors are modernizing core operations, infrastructure and data management to create profitable, intelligence-driven customer journeys across every touchpoint. Edge computing and 5G play a critical role in this process.
We will look at how to enable intelligent customer experiences in stores shortly. But first, what do today's customers expect from retailers?
Many business models, one customer experience challenge
Grocery stores and grocery pick up
Restaurants and hospitality
Automotive services
Specialty stores
Financial services
Infrastructure retail
Integrated omnichannel experiences
The new retail frontier
Today's shoppers take quality and value for granted. What matters is the convenience and consistency of experience you offer.
Delivering this experience seamlessly across physical and digital stores requires the ability to make intelligent decisions on the entire value chain. To make these decisions, you need data from sensors, cameras and other devices at the edge. You need to collect this data with the help of private and public 5G networks. And you need to be able to interpret it in real time using edge computing running artificial intelligence (AI) and streaming data analytics applications.
Today's customer expectations outweigh most retailers' ability to deliver
Customers expect a great experience, every time
80%
say they would stop doing business with a vendor due to poor customer experience.1
70%
say a poor digital experience would make them somewhat or very likely to switch to a different brand.1
Not all retailers can deliver consistently
88%
say their customer experience decisions are not yet driven by data.2
6%
have consistent customer experience processes across departments and channels.3
Most customers expect these capabilities from their retailers:
Mobile shopping app
72%
Contactless payments
75%
Delivery services
70%
Mobile order ahead
70%
Online grocery delivery
74%
Buy directly from manufacturer
70%
Curbside pickup
66%1
A view of the future
Customer experience innovation is focused on achieving profitable growth by: enhancing shopper engagement across the customer journey, removing barriers to purchase, and increasing basket size and purchase frequency both online and in stores. Many retailers are also keenly aware of the need to optimize merchandizing, supply chain and operational processes to drive down costs, eliminate out-of-stock and overstock conditions and meet customer expectations.
What the experiential, frictionless and personalized retail future will mean to customers
I enjoy a fun, exciting and interactive experience when I visit the store.
Experiential
- Product information makes purchase decisions easier.
- Smart fitting rooms with immersive experiences streamline try-before-you-buy.
- Smart shelves and interactive signage highlight special offers.
- Endless aisles enable customers to discover and order out-of-stock items or substitutes.
Transactions are fast and easy. I do not have to wait to get what I want.
Frictionless
- 'Grab and go' checkout makes shopping quicker, simpler, safer and healthier.
- Options such as buy online, pickup or return in-store, curbside pickup and touchless transactions maximize convenience.
- Effective safety monitoring reassures employees and shoppers.
- Al-powered loss prevention protects shopper privacy.
I am provided recommendations and special offers as I move easily between digital and physical stores.
Personalized
- Shoppers pick up in one channel where they left off in another.
- User experiences in physical stores are informed by customer history and preferences.
- Every part of the customer's experience is based on data specific to them.
- Retailers gain new opportunities to understand and interact with customers.
Connecting digital and physical worlds
Customers want experiences that flow from websites, retail apps and social media channels into the interaction and options they are offered in physical stores. To deliver this experience, retail disruptors are making a strategic shift in processes and technology capabilities.
From retailer-centric, supply-ledRetrospective decisions are: |
To customer-centric, demand-ledRetrospective decisions are: |
|---|---|
| Made remotely, in the cloud or data center using descriptive analytics | Made locally, at the point of interaction using predictive and prescriptive analytics |
| Based on historical mass customer data | Based on real-time customer behavior in individual buying journeys |
| Delivering familiar customer experiences. | Delivering personalized customer experiences. |
From inventory, supply chain and logistics to flexible pickup and delivery options, customer-centric retailers orchestrate every aspect of their operations to deliver what their customers want, when they want it.
Achieving this orchestration requires enabling physical stores to:
Gather real-time information on an individual shopper's behavior
Connect that behavior to data points about the customer's past behavior and preferences
Turn that customer information into insights in real-time
Use these insights to deliver personalized recommendations and incentives through staff interaction, signage and shoppers' digital devices.
Sensors, cameras and IoT devices generate data communicated by 5G networks to edge gateways and servers. This infrastructure at the edge is where artificial intelligence, computer vision and streaming analytics translate massive volumes of data into the potential for superior outcomes.
Two retail transformation accelerators
Edge computing
The first question many people ask about edge computing is why they cannot just send data collected in a store to a cloud or data center. Latency (response time), security risks, regulatory concerns - and more - often make edge computing a better option.
Looking at one example - computer vision-based use cases - imagine you are CIO of a retailer with 50 stores. To gain insights and deliver personalized retail experiences, you install fifty 4K video cameras in each store.
In a day, your cameras might generate 1.8PB of data in continuous live streams. Sending all this data to a central location is both expensive and slow. And, given that only a fraction of the data will deliver useful insights, the return on your backhaul investment is low. Meanwhile, each millisecond of latency reduces the value of your insights.
Edge computing solves the problem by enabling you to run computer vision inferencing and analytics where the data is generated: your stores. This reduces costs and delivers real-time insights to create superior customer experiences.
The value does not stop there. By running point of sale, inventory management and other systems at the edge, you can reduce time to value and build far greater control and agility into your operations.
5G Networks
Transmitting large volumes of real-time data securely can be challenging. Wi-Fi networks may have dead spots and security vulnerabilities. Hard-wiring is inflexible, expensive and often not practical in older retail locations. And 4G cellular lacks the speed and capacity needed for real-time insights.
For these reasons, 5G is the ideal connectivity solution for the new era of retail. Whether implemented as a private network or a managed service from a communication service provider, 5G offers the ultra-low latency and huge bandwidth to rapidly transport data for real-time analysis at retail stores, distribution centers and related locations.
The ability to create dedicated network slices bolsters endpoint security and enables greater reliability for mission-critical applications, which can be given network service priority. And 5G ubiquity will accelerate transformation in the broader retail ecosystem - from gathering logistical information to delivering rich media content and immersive experiences to customers.
Four superior customer experience pillars
Edge computing and 5G offer solutions to some of the biggest challenges retailers face in enabling remarkable customer experiences.
Intelligent Store Transformation
What do retailers learn if a valued online customer walks into their analog store? Security cameras may capture a face and show a journey around the store, but this information does nothing to help the anonymous customer.
Edge computing offers the potential to analyze each step and behavior in that customer's journey and to connect it with information about them from their online behavior.
Imagine being able to pick up where the customer's online journey left off to deliver a seamless shopping experience in-store. The ability to apply insights from past online behavior also offers retailers opportunities to increase basket size with personalized suggestions and promotions.
From an operational standpoint, aggregating these individual insights empowers retailers to:
- Bolster customer service
- Update assortment
- Optimize inventory positions
- Maximize profits
- Reduce shrink and eliminate unnecessary costs.
Cost Optimization
While edge computing can help retailers boost sales and basket size, the same powerful technology can also help improve the bottom line through cost optimization.
Retailers can automate easily repeatable processes throughout the store to address staffing shortages, process consistency and quality. For example, conversational AI can enable drive-through retailers to offer drivers personalized menus based on prior purchases and improve the accuracy of the customer's order, keeping businesses open when facing labor shortages.
Automation can also:
- Help merchants predict traffic
- Plan for optimum staffing at critical times
- Increase checkout accuracy
- Accelerate inventory, safety and compliance checks.
Supply Chain Excellence
In just a few years, ultrafast urban grocery and take-out delivery start-ups have become multibillion-dollar enterprises. Ten-minute services like these may be outliers today, but they show how speed-to-customer is now a major source of competitive advantage.
Even retail managers who have highly optimized fulfillment operations can find this acceleration challenging. Positioning retail inventory correctly across distribution centers, stores and fulfillment centers can greatly accelerate deliveries to customers. However, getting forecasting right is notoriously difficult.
Edge analytics can have help drive supply chain excellence and optimal logistics processes. Boosting accuracy and enabling more automation at fulfillment centers improves inventory sharing across sites to handle local surges. Merchants also can use AI to predict surges, for example, by correlating historical demand with local weather and events.
Key retail transformation applications
Intelligent in-store transformation
- Immersive experiences through virtual, augmented and mixed reality
- Personalized, interactive and instructive displays
- Customer behavior analytics, such as dwell time and product placement optimization
- Personalized marketing, promotion and customer assistance
- Frictionless, cashier-less and autonomous checkout
- Navigation assistance
- Conversational robot assistance
Cost optimization in stores and distribution centers
- Out-of-stock and overstock mitigation
- Pick, pack and ship automation
- Automated sorting and palletizing
- Loss prevention
- Employee-to-customer interaction optimization
- Conversational AI-based customer service
- Drone-assisted inventory counts
Health, safety and compliance
- Workplace and shop floor temperature monitoring
- Temperature, humidity and freshness compliance
- Carbon emissions management
- Air quality tracking
- Spill detection
- Planogram compliance
- Crowd control
- Check-out lane traffic management
Supply chain excellence
- End-to-end demand forecasting
- Real-time inventory visibility across the value chain
- Automated fulfillment and logistics
- Warehouse capacity planning
- Fulfillment systems optimization
- Micro-fulfillment centers and dark stores for fast and efficient order fulfillment
The challenge
Today's architectures are siloed
Customers increasingly expect to enjoy experiences that are only possible through tight integration of every aspect of retail operations.
From demand forecasting, warehousing and logistics to marketing and merchandising, each point in the value chain must be orchestrated to deliver transcendent customer experiences.
One of the biggest challenges retail enterprises face is that single-use edge implementations have proliferated, creating operational, management and data silos.
Unintentional architectures of proprietary, specialized, monolithic silos with no single source of truth
In-store kiosks
Video analytics
Consumer applications
Point-of-sale systems
Digital signage
Mobile point-of-sale app
These silos result in an expanded cyber attack surface that makes your operations more vulnerable and prevents you from capitalizing fully on the value of your data.
To thrive, retail enterprises need agility and freedom to innovate with data. The key to achieving these foundational tenets is to embrace an open architecture that inherently protects and consolidates your edge.
For remarkable outcomes
Simplify your edge.
To enable retail revolution at the edge, IT infrastructure and processes must:
Bring intrinsic security to your edge.
Select transformation partners that you are confident have built security into their supply chain, services and infrastructure.
Generate real-time insights where you need them.
Optimize your IT infrastructure and processes for AI and analytics near the data source so that you are able to act on insights where and while they matter.
Consolidate your infrastructure, operations, management and data as your edge expands.
Modernize your edge technology foundation and data pipelines with consistent hybrid cloud architecture, operations and management.
Ready to delight your customers?
Whether you have a high level of digital maturity at the edge or are just getting started, Dell Technologies and Intel can meet you where you are in your digital transformation journey. We nurture deep, longstanding connections with retail enterprises so that we can understand your challenges and work with you to achieve remarkable outcomes.
In partnership with Intel, Dell Technologies develops and optimizes a wide range of infrastructure for demanding edge environments. Dell Technologies has the broadest portfolio at the edge, a portfolio trusted by retail customers:
65%
of US retailers depend on Dell desktops and laptops5
78%
of US retailers use Dell servers5
80%
of US retailers trust Dell storage infrastructure5
Together, Dell Technologies and Intel are helping retailers build a future in which real-time, omnichannel data and AI provide insights from the first customer engagement, through the purchase process and on to predicting future demand.
Dell Technologies' Customer Solution Center staff can help you plan to be part of this future. With proven use cases at the edge and real-world experience, Dell and Intel retail experts can help you architect and validate solutions to drive the success of your business.
Learn more at Dell.com/RetailEdge and Intel.com/Edge, or talk to your customer representative about visiting a Dell Technologies Customer Solution Center.
[1] 451 Research, part of S&P Global Market Intelligence. Voice of the Connected User Landscape, Disruptive Technologies Survey, 2021.
[2] 451 Research, part of S&P Global Market Intelligence. Voice of the Enterprise: Customer Experience and Commerce, Organizational Dynamics, 2021.
[3] 451 Research, part of S&P Global Market Intelligence. Voice of the Enterprise: Customer Experience & Commerce, Digital Maturity, 2021.
[4] Edge Technologies Survey - 451 Research, part of S&P Global Market Intelligence, for Dell Technologies, 2021
[5] All statistics use the retailer list from National Retailer Federation, Top 40 Retailers with US Home location cited at https://www.dell.com/en-us/dt/industry/retail-it/index.htm.