When Retail Goes Digital

Every retailer wants it. Most truly need it. But very few know how to get it. The digital solution that will improve business, increase sales or thrill customers. Retailers know that the solution is out there. But with so many options and approaches, how can retailers find the right one? Mirabeau, a Cognizant Digital Business organised Retail Innovation Day to uncover the answers.

Jeroen Caré, Head of Digital Consulting at Cognizant, opened the event with a few striking statistics for the 88 attendees who gathered at our Digital Studio at the Kauwgomballenfabriek in Amsterdam. “We asked our retail clients about their digital transformation, and 87% said they at least had an approach to digital – although not necessarily a strategy,” Jeroen reported. “Most strikingly, 54% admit they don’t get the full benefits from their digital activities. What’s more, 48% of retailers say they don’t know where to go from here.”

Event attendees, who represent some of the biggest names in national and international retail and DTCs– including Jacobs Douwe Egberts, Philips and GrandVision – were eager to hear expert insights from the three keynote speakers at the event. “I’m more on the manufacturing side than the retail side,” one participant said. “But I’m fascinated with the topic and the speaker lineup. I look forward to hearing their ideas.”

A legacy of leadership

The first speaker to take the stage was Rob Heesen. Until recently, Rob was General Manager of the Albert Heijn To Go convenience stores. Now, he’s the Head of Food Services and Concepts Innovation for all of Albert Heijn. “Albert Heijn was founded more than 132 years ago,” Rob began. “So we’re the definition of a legacy company, trying to compete with the digital natives who very recently entered the market.”

That comment stunned an attendee who works in food retail. “Albert Heijn is at the top of their game, and is always the first to market with new innovations. It’s interesting to hear that they still struggle with the burden of a being a legacy company,” she said. “It gives me hope that even the ‘big boys’ struggle with this stuff.”

Rob focused on the challenges of innovation in a company as large as Albert Heijn. “With over 900 stores, a home delivery service and convenience locations, we can’t just introduce new innovations everywhere,” he said. “The costs and implications are just too great. So we experiment with great ideas in small batches to see how they work before we implement them on a large scale.”

Rob explained that knowing the customer is the key to digital solutions that score. “In the end, customers need the same things from Albert Heijn that they always have. They want to know what’s on sale, how to prepare the meals they want, what they need to stock their cupboards, and how to get their groceries easily. The only difference is the ways in which they seek and find this information. And that’s where we focus our attention. Instead of a handwritten shopping list, we use a handy app that keeps track of everything you need when you shop, including recipes and ingredient lists.”

Keeping close to customers and managing streamline innovation cycles means following a clear path to try new ideas. Empathize with customer needs, define the problem, ideate a solution, prototype and test. “And then, start all over again,” Rob says.

Erasing the line

Next to take the stage was David Womack, Head of Insight and Strategy – Europe from Cognizant. David offered insights into how digital can not only transform the customer experience, but also the customer’s perception of time. Using a case study for T-Mobile to illustrate, David walked attendees through the steps Cognizant takes to solve real issues for retailers.

“This T-Mobile retail location was using an old-fashioned ‘take a number’ system to manage the inflow of customers,” David explained. “They wanted a better system that would make customers feel more welcome, and also increase up-sell. As with every project Cognizant does, we started with an examination. We went to the store and observed customers. We noted the ways in which they behaved, and where there was potential for better solutions.”

David and his team developed a digital system that got customers out of line and moving logically throughout the store while they waited for a sales agent. The innovative digital solutions -- including an app, a tracking device connected to the customer’s mobile phone, and a redesigned store floor – not only increased sales, but also had an unexpected benefit. “Although customer wait times were only reduced slightly, customer perception of wait times reduced dramatically. By offering a better way to wait, we gave customers the feeling of a better overall experience.”

Kitty Koelemeijer — Prof. Marketing and Retail, Nyenrode Business University

Breaking out to boost inspiration

Next on the agenda was a series of breakout sessions with innovative companies who offer retailers unique opportunities to boost their digital dominance.

Omnia Retail shared a customer case study to illustrate the power of dynamic pricing and online marketing automation. During the breakout, they discussed the responsibility, strategy, systems and data needed to drive results.

REXai explained how incorporating AI and self-learning into eCommerce strategy can make online shopping a thrill for customers and a real win for retailers. REXai’s work for a major Dutch sports retailer make search and selection in the web store as personal and powerful as it can be.

SAP C/4HANA presented FashionLabs, an app/commerce environment that allows customers to search for fashion items on the go, recreate the looks they discover and crowd-source trends. With virtual search and context-driven services, SAP Commerce connects the demand chain with the supply chain.

Store DNA took attendees on a journey from the early days of retail, when stock was kept in a handwritten ledger and sales were added up with a calculator. Fast forward to today, when Store DNA is using its app to turn in-store data into decision-ready insights. Their goal? The ability to manage sales and inventory for 1,000 stores from a single mobile phone.

Symphony RetailAI introduced CINDE, a first-of-its-kind, AI-enabled digital assistant for grocery and hard goods retail. With CINDE, users provide natural language input, and get conversational, insight-rich answers in return. CINDE offers insight in to the best next actions to drive sales, profit and customer loyalty, all at machine speed and scale.

Playing with the big boys

Refreshed and full of insights from the break-out sessions, attendees then settled back in to hear from the last keynote speaker of the day. Kitty Koelemeijer, Professor of Marketing and Retailing at Nyenrode Business University, delivered an energized presentation about some of the biggest players in retail – including Walmart, Amazon and Alibaba. What makes these giants so successful? And what can we learn from their digital dominance?

Kitty discussed the phenomenon of Hedonistic Adaptation. “Everyone is so used to getting things super fast and super conveniently, that this is no longer a differentiator in retail. It’s a necessity.” Kitty went on to explain that big strides can be made by connecting the physical and digital retail presence. “Even Amazon is breaking into the physical store game, with their Amazon GO stores and their curated 4-Star stores.”

But what kind of developments should retailers consider when trying to adapt their business model to the changing digital world? The key is to generate true transformation, and not just quick fixes. Kitty offered examples of successful adaptations from leading retailers.

Trading up: Starbucks’ Roastery locations created a whole new coffee experience.
Direct to Consumer: Unilever has Dollar Shave Club and Heineken has Beer Wulf.
Partnerships: When Wehkamp partnered with BCC electronics, they took an already powerful back-end logistics system and made it their own.
Build Your Own Ecosystem: Giants like Baidu, Alibaba and Talpa branch out with financial services, media services and more to create value and generate revenue across a number of sectors.

The panel speaks

Last on the agenda was a panel discussion with all keynote speakers. Attendees had the opportunity to ask questions and gain insight into their biggest struggles. From practical questions like “How do you scale a great solution?” to philosophical questions like “Should there be more legislation and controls to reign in giants like Amazon and Alibaba?”, attendees took the opportunity to ask the burning questions that most retailers struggle with.

When one attendee asked, “What will drive customer loyalty in the future?”, Kitty provided an insightful response. “There are different kinds of loyalty,” she says. “And research is showing that loyalty based on past purchases and habit is not nearly as powerful as loyalty based on engagement. New entrants can easily disrupt the habitual type of loyalty. But it’s much harder for them to disrupt engagement loyalty.”

To that, Rob added his insight: “Quality is also key to loyalty,” he said. “You must ask yourself: what are you excellent in? How do you add value? How are you unique? These are the things that drive real loyalty.”

Closing time

Retail Innovation Day was an afternoon of inspiration and knowledge sharing, and an opportunity for retailers of all types and sizes to share their common challenges and unique perspectives. At the end of the day, one thing was certain: there are still plenty more opportunities for growth. And many attendees walked away with great ideas to get started. “It’s so comforting to know that so many major companies struggle with the same issues as we do,” one retailer said. “And today, I picked up a lot of great ideas for things to think about as we move forward.”

If you have questions regarding Retail Innovation Day, the speakers, the demo's or the break-out sessions or what we can do for your retail business? Please contact Jeroen Caré, Head of Consulting Cognizant via Jeroen.Care@Cognizant.com.