Over the past few years, the retail sector has been increasingly moving towards the omnichannel model, which allows consumers to buy from multiple channels including brick-and-mortar stores as well as mobile and e-tailing platforms. To en­sure a seamless delivery of service across all these channels, retailers are working to update their IT landscape, expanding well beyond the traditional enterprise resource planning (ERP), customer relationship management (CRM) and supply chain management solutions. They are beginning to use new technologies such as analytics, big data and social media to identify individual customer preferences and behaviours, and offer personalised shopping experiences to build loyalty.

While e-commerce has attracted customers owing to its convenience, a broader selection of products and lower prices, the role of retail stores cannot be undervalued, especially when the majority of the consumers still prefer to shop at physical stores. In-store innovations that can act as competitive differentiators are imperative to retain old consumers and build a new consumer base.

IoT and big data analytics

The internet of things (IoT) presents an opportunity for retailers to develop an ecosystem that connects the physical and digital worlds, allowing bidirectional, real-time interaction with consumers both inside and outside the store. According to Accenture, one way to achieve this is through location-based beacon technology, which retailers can use to directly interact with customers as they enter the store. Leading departmental store brands such as Lord & Taylor are already using Apple’s iBeacon technology and a mobile marketing platform called Swirl to deliver personalised promotions to customers who download the brand’s app.

Further, through big data analytics, retailers can leverage their interactions wi­th customers to improve the in-store cus­­­tomer experience. For example, by using sensors to track customers’ paths th­rou­gh a store, managers can improve the store layout and merchandise placement strategies. Hugo Boss has already deployed heat sensors at its clothing stores to track customer movements, and accordingly place premium products in high-traffic areas.

In increasingly complex supply chains with multiple digital channels and high customer demand, connected devices and products can provide retailers the opportunity to optimise operations. For example, radio frequency identification technologies can improve the precision of inventory tracking. Data visualisation technologies can make it easier for employees to track products across the supply chain. This service could even be extended to customers, allowing them to track a custom order in the production and distribution process. Managers can adjust pricing in real time, using internet-enabled smart tags to lower prices on promotional or low-turnover items or increase pricing on high demand items. A fully integrated pricing system would help retailers improve the synchronisation of prices between online and brick-and-mortar stores.

Meanwhile, IoT devices can be integrated in the supply chain to improve store operations and reduce costs. For example, IoT-enabled sensors can enable store managers to monitor lighting and temperature, and adjust settings to increase customer comfort and ensure cost-effective energy usage. Using sensors to automate manual functions such as tracking inventory or changing prices on individual items, gives sales associates more time to interact with customers, further improving the in-store experience.

Cloud computing

The cloud has changed the way all businesses operate, and the retail industry is no exception. Since retailers are now tasked with managing the supply chain across multiple channels, they can benefit from a retail cloud computing platform by gaining access to information pertaining to inventories, their location, and how to best deliver products in the fastest and most efficient way possible. This platform also gives or­ganisations the flexibility to make changes to orders when they are already in transit.

Cloud-based systems are designed to seamlessly integrate with existing retail systems on the back end, including inventory management, product information management, transportation management, CRM, ERP and returns management to streamline the entire business process. With a centralised data repository and data analytics, retailers can also determine the points for improvement and address bottlenecks before they negatively affect the business as a whole.

Further, with data stored in a central cloud location, employees can get instant access to information they need anywhere and on any device. For example, if the product a customer wants is not available in the store, sales associates can easily find where the item is available and provide the most efficient and convenient way to fulfil the order.

Traditionally, retailers acquired and owned hardware and software as part of their capex, and paid for connectivity and managed services as part of opex. This meant large upfront investments in hardware and software and employment of IT personnel to run and maintain these assets. Under cloud computing, a company’s IT expenditure can be treated as opex. Retailers can pay for storage and software licences either on a subscription basis or on a pay-per-use basis. This has enormous advantages for retail businesses since they are characterised by periods of normal activity interspersed with high demand spikes during weekends and holidays, or promotional campaigns. Designing an IT infrastructure to accommodate the peak demand would mean underutilising the IT capacity for long periods. In the opex model of cloud computing, the retailer can design the IT infrastructure for a baseload and simply source additional computing resources on demand to handle spikes.

Social media

Retailers can use social media platforms to gain customer insights, obtain feedback and adjust their offerings to reflect customer needs. If retailers are able to connect with consumers meaningfully on social media, they will increase their visibility in an audience that is already inclined to buy or looking to buy products. Social media can also help retailers build brand awareness and extend the amount of time potential customers spend on browsing. This can be done by engaging them in conversations and creating multiple online communities filled with entertaining and valuable information and interesting insights into the brand. Thus, retailers can ensure that visitors on their social media platforms are converted into buyers of their products.

Retailers participating in social media need to develop a content strategy that puts the customers at the forefront of the campaign. Posting content too often or content that is irrelevant to the consumers can amount to “cold calling” and become a so­cial nuisance. Therefore, an important element of retailers’ social media strategy should be tracking of social media analytics such as how many people are commenting, liking and sharing the content posted.

Digital payment infrastructure

The number of merchants accepting digital payments has reached an all-time high as customers are getting more and more comfortable using their smartphones, tablets and other mobile devices for online purchases. The government’s demonetisation move in November 2016 has given a further push to this trend. Therefore, investing in convenient and secure payment solutions has become one of the top priorities for most retail enterprises.

The digital payment modes accepted at the majority of the retail outlets are debit and credit cards, and mobile wallets. Re­cen­t­ly, the government has also laun­ched the BHIM (Bharat Interface for Money)-Aadhaar platform, which allows users to make payments through the fingerprint scanner by authenticating their biometric details with the Aadhaar database.

Meanwhile, several retail outlets have started entering into exclusive partnerships with digital payment companies to offer secure and convenient cashless payment options to customers. For instance, in March 2017, Spencer’s Retail partnered with Airtel Payments Bank, allowing customers at its 123 outlets across the country to make digital payments from Airtel Payments Bank over mobile phones. Airtel will not charge any processing fee from its customers or merchant partners for the digital transactions. Retail outlets such as W, Jumbo, Archies, Woodland, Madura Garments, Red Tape and Modern Bazaar have partnered with the Paytm Payments Bank for cashless transactions.


Amidst changing dynamics, retailers have stepped up investments in their IT infrastructure to optimise their supply chain ope­rations and better meet customer demands. The trend is likely to gain mo­men­tum in the coming years, with advan­ced technologies such as robotics, delivery through drones, blockchain, bitcoin and virtual/digital store assistants poised to shape retail operations.

Puneet Kumar Arora