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From digital to physical: Tailoring retail to the individual

Imagine purchasing a product online and finding it in the boot of your car the very next day. As changing industry dynamics place pressure on retailers, leading companies are increasingly taking advantage of emerging technology to create shopping experiences tailored to individuals’ needs. Though the Australian Bureau of Statistics reported that national retail turnover rose by 3.9 per cent in October 2015 compared with the previous year, the digital economy has introduced waves of new competitors that are innovating to provide differentiated customer offers.

Customers’ expectations have also shifted as the daily use of digital technology transforms the way they communicate and connect with products and services. Leading global retailers are exploring ways to use intelligent, connected devices to offer new services, reshape experiences and enter new markets by creating digital ecosystems. According to Accenture research, 40 per cent of global retailers agree that a personalised customer experience is their top priority with nearly two thirds (61 per cent) saying that personalisation technologies present them with a positive return on investment. Australian retailers looking to forge deeper, more personal connections with their customers should start adopting personalisation strategies for both products and delivery channels.

Normal’s flagship location in Chelsea, New York City

Normal’s flagship location in Chelsea, New York City

An example of this is New York-based headphone outlet Normal, which encourages customers to send a photograph of their ears through an app and have custom fit earbuds 3D printed. Similarly, startup Trunk Club enables shoppers to buy outfits that suit their style, budget and existing wardrobe without leaving home. After completing an online style survey, customers are sent a preview of a selection of clothes, handpicked by a stylist before the clothes are shipped straight to their door. Even Kit Kat allows customers to customise wrappers with images and personal messages for friends by uploading content online.

According to a recent survey by Australian delivery and logistics company Pack & Send, shoppers also want as many options as possible for the time and location that their purchase is delivered. As digital supply chains have increased warehouse and stocktake visibility, it’s now possible for retailers to offer more personal choices in delivery and pickup to improve the overall customer experience. The delivery of the product is increasingly becoming a fluid aspect of the shopping experience that can flow with the needs of the individual. Products come at the time and location they choose.

Taking customer desires, car manufacturer Audi has collaborated with delivery company DHL to deliver packages straight into the trunk of consumer’s cars using Audi’s keyless entry system. Another example of this is British retailer Argos recent redesign of its distribution network to leverage larger stores as “mini distribution centres.” This extended customers’ choice of delivery and collection option, has enabled Argos to offer a greater range of products to smaller stores for collection on the same day. For those with a busy schedule, parcel collection and delivery service Doddle, offers a “commute and collect” model for customers to retrieve their online shopping purchases from the convenience of a nearby train station or car park. Amazon also recently patented the idea of mounting 3D printers onto delivery trucks to reduce delivery time and warehouse space requirements.

Today, customers can order products online they have designed themselves or had specifically designed for them, and have them delivered in a way that fits seamlessly into their lives. Converging the digital and physical world through the Internet of Things (IoT) is moving from experimental to mainstream in the retail industry. The movement offers retailers opportunities in three critical areas, customer experience, the supply chain and new channels and revenue streams. For retailers that accelerate digital technology adoption to deliver a seamless retail experience, the opportunities to increase sales and improve customer satisfaction are endless.

David Mann is Managing Director of Accenture Strategy in Australia and New Zealand.

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