How to make more money, just not this week

Illustration of digitised customers

How to make more money, just not this week

Australian retailers will have roughly $1 billion dollars a day on the table over the 2017 Christmas season.

With so much money at stake, Online Retailer asked me to provide insights into how retailers can leverage technology to maximise their sales during this critical trading period. It’s an important question, but it created a dilemma for me.

Ideally, I wish I was asked the question six months ago, as in October the window for change has closed. By now most retailers would have locked down their live systems and any meaningful technology upgrades will have to wait until 2018.

In October, the only practical retail IT advice I can give for Christmas 2017 has to be limited to ensuring that your systems have been locked down too. Any change at this point, no matter how small or promising, carries risk that must be carefully assessed.

That said, I will take this opportunity to share a number of fundamental principles that apply to modern retail IT, irrespective of the season. The Christmas rush shouldn’t stop retail executives from thinking about their systems and technology strategy for 2018 and beyond.

The shakeup of old retail business models

The era of universal mobile computing (aka smartphones everywhere) has made the traditional retail model increasingly inadequate. Today, any retail enterprise that can’t deliver a friction-less shopping experiences across all channels operates with a severe handicap.

To address this, one of two paths can be taken, leading to a connected retail enterprise that dovetails well with the digitally empowered consumer: the hard, long and expensive route, or the elegant one.

Taking the hard road means massive investment to try make old and new systems work together, but this approach is akin to a castle made of sand. In contrast, the elegant path can deliver a lasting solution, as it relies on the adoption of a unified retail platform, with minimal interfaces and real-time interactions with customers.

Watch out for a trap here: the hard road appears easier, due to its incremental nature. But, brace yourself for never ending increments – a convoluted system architecture cannot be easily simplified.

Customers 2.0 have arrived

The need to transform the use of technology within a retail enterprise doesn’t stem purely from the fact that we now have to deal with computerised and (well) connected customers. The behavior of consumers has also changed and seems to be morphing daily. On the surface, one could attribute this to ‘digital disruption’, but this buzzword doesn’t really help anyone comprehend the real nature of this phenomenon.

We no longer deal with people who use digital devices; we deal with digitised people.

During a recent Executive Briefing session, Retail Directions offered a solution to this conundrum and postulated that the humans we once knew have mostly disappeared from our advanced societies, due to the evolutionary pressures from the increasingly digitised environment. We no longer deal with people who use digital devices; we deal with digitised people.

This means that a new species has emerged instead – continually ‘plugged in’ to the digital ecosystem through their smartphones, which augments our humanity with superhuman cognitive and processing power. For the time being, these super-smart, universally connected devices remain in our hands only, but we’re just a brain-chip interface away from becoming real cyborgs.

Connecting to Customers 2.0

As with most electronic devices, the evolving ‘cyborgs’ can be connected to via interfaces. For the most part, they use connection hubs such as social networks e.g. Facebook, Twitter, YouTube, Instagram. And, as a consequence of their heavy engagement with a wide range of apps and data, Customers 2.0 have become partially disconnected from reality. If you want to reach them and influence their purchasing behaviour, you need to do it via their hubs – with seamless technological elegance and skill.

Digital path to purchase

A testament to the growing power of the social media and general web interfaces, over 50% of brick and mortar purchases now originate from a prior digital interaction with the retailer. Once we add online purchases, more than 60% of all sales made in retail originate from an online engagement. We can expect that this number will hit 80% within the next 2-3 years.

To align with this trend, retailers need to change their methods of operation, particularly in their marketing department, to re-focus on business-wide digital engagement instead of the insular pursuit of more online sales.

At the same time, modern retail operations and logistics need to gain the capacity for business-wide fulfilment. The old paradigm of brick and mortar simply augmented with e-commerce must be replaced with a unified retail enterprise, interfacing seamlessly with the digital world around it.


The concept of a unified retail enterprise operating fluently with Customers 2.0 must extend beyond online engagement. Modern retailers need to provide their store teams with direct access to live customer data, to help enhance their interaction with the computerised Customers 2.0 when they visit brick and mortar stores. Without strong mobile technology at their disposal, store teams will be left at a serious disadvantage when faced with a ‘cyborg’ shopper. A modern POS system must be able to deliver powerful, mobile clienteling functionality.

Getting there

To capitalise on the billions of dollars still out there to be spent by shoppers, and to future proof their businesses, retailers need to engage well in two digital spheres – their internal systems and interfacing to Customers 2.0 in the external digital world. The latter needs direct engagement and smart use of the digital hubs.

A prerequisite to success must be getting the internal systems in order. Retailers can no longer afford expensive, complex and often poorly connected internal system environments, which soak up time and money and handicap true operational agility.

The link between the internal and external IT domains will powerfully connect retailers with the plugged-in Humans 2.0.

Internal systems must be seamlessly unified (transformed into a kind of a solid-state device) enabling the business to shift its emphasis to collaboration with the external systems. The link between the internal and external IT domains will powerfully connect retailers with the plugged-in Humans 2.0.

Obviously, embracing this model cannot be tactical – you need to make a strategic commitment. Big decision, but one that will allow you to turn today’s impossibilities into tomorrow’s miracles.

This post was authored by Justin Cohen, Marketing Manager, Retail Directions

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