The Digital Shopper Will Define the Future of Retail


Like many Americans, I’ll spend this coming “Black Friday” nursing a turkey hangover and shopping the Amazon iPhone app from the couch instead of battling mall crowds.  By most accounts, this year’s seasonal retail projections are better than last, but surviving in an increasingly intense competitive environment is no easy feat for retailers.  At the heart of the issue is a clear call to arms to understand and satisfy a digitally savvy shopper. So how can retailers and their service providers rise to the challenge of supporting the digital end customer?

Retailers have to embrace disruption or risk replacement

The retail industry is in the midst of monumentous disruption, with the advent of ecommerce and rapidly increasing shopper expectations for an easy, seamless experience.  It isn’t just about the shiny front end experience with sexy websites and mobile apps, it’s about an integrated back and middle office that supports those experiences, much like the OneOffice endgame we’ve been talking about. 

Most important for retailers now is bridging online and in-store experiences.  While online sales are still a relatively small percentage of retail revenues today, smart retail organizations are paying close attention to ecommerce trends in order to avoid a slip into obsolescence, “Blockbuster style.”  Traditional retailer bankruptcies and store closing announcements seem constant, while competition among brick and mortar and online shopping sites alike is fierce.  Some traditional retailers are betting on unique in-store experiences to revitalize flagging sales, while others are leveraging their vast physical presences to bolster omnichannel sales as points of pick-up or shopping of online purchases.  Traditional retail giants like Walmart are betting big on competing in the online shopping space, with its recent acquisition of, and it seems like all business are trying to live up to the expectations of the quick, seamless, personalized experience—the “Amazonization” of consumer culture.  Meanwhile, the need to support customers who expect to shop using mobile apps on their smartphones and tablets adds another dimension to ensuring competitive relevance. 

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Automation and cognitive at the front of retail’s journey to OneOffice

Recent survey data shows that the vast majority of retail buyers agree that the impact of cognitive and automation is going to be a critical component of future operations, as well as the necessity to leverage new technologies in order to become more effective. Retailers (along with banking and travel) are leading in experimentation with some of these pilots.  For example, the Watson- powered “Macy’s on call” is a pilot in several Macy’s stores allowing customers to type in questions while in store to help them navigate products and facilities.  Staples is using IBM’s Watson for ”on-demand ordering”(which by the way, could really impact some outsourcing contracts which are heavily dependent on faxed B2B orders and manual data entry). Banking/ credit card use of bots will also impact the space, for example, Mastercard’s foray into bots which allows shopping on messenger apps.

Use of bots is aimed at improving the customer experience, but creating a simpler, more personalized experience.  While bots are changing how retailers communicate with customers, the human touch becomes even more relevant. Even as bots continue to mature, their role is often to simplify the self-service process and/or augment the agent’s work, rather than completely replace it. HGS’ DigiCX platform is an example of a service provider working on an app that “pivots” between agent and bot, a solution which is archetypical for for retail customers.


What this means for service providers:

  • Greater requirements for service providers: Engagements may be insourced due to decreased volume as a result of automation/ self-service, placing a greater focus on more complex engagements requiring more from providers. As the data above shows, 83% of retail buyers are expecting their service providers to deliver both technology and process expertise.  Areas such as planogramming, supply chain analytics, storefront operations support, core marketing operations, and ecommerce support may often be outside of the traditional definition of BPO skills but will become requirements to do business with retailers. Successful service providers will stitch together a multidisciplinary band of skillsets to successfully target retail operations.
  • Flexibility is still a key requirement. Ultimately what will continue to drive a lot of the outsourcing of customer service in retail is the requirement for flexibility, where retail has a unique need for seasonal ramping and flexing.  Retail clients we speak to look to service providers as “uber when we need a ride.”  We are seeing certain service providers try to address this with alternate delivery models. Examples include relying on a much higher percentage of work-from-home agents that are retained long term and leveraging part-time university talent pools at nearshore destinations (i.e. Jamaica). The challenge of seasonality is not going to go away, and cracking the code on it has the potential to impact revenues at peak times—making retailers particularly amenable to working with innovative service providers in this area.

The Bottom Line: Creating an intelligent retail operation is critical for survival

There is so much more on the horizon for retail today, given the potential capabilities around IoT, augmented reality and other advancing technologies to be used in store and for mobile shopping. For an industry awash in data– review data, social data, shipping data, etc.—the retail industry still has many more opportunities to get to know its customers, which will only get more complex with time. Given the pace of development and technology, being students of observation and having flexibility to change is critical for retailers to remain in business. 


Posted in : Contact Center and Omni-Channel


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